Former trade official is World Bank choice

`Free trader' Zoellick picked by Bush to replace Wolfowitz

May 30, 2007|By Joel Havemann and Maura Reynolds | Joel Havemann and Maura Reynolds,Los Angeles Times

WASHINGTON -- President Bush has chosen Robert B. Zoellick, a former U.S. trade representative and deputy secretary of state, to replace Paul Wolfowitz as president of the World Bank, a senior administration official said yesterday.

Wolfowitz announced his resignation this month after a bank investigating committee found that he had violated bank policies by involving himself in personnel decisions concerning a staff member with whom he was romantically involved. He said then that he would leave by the end of June.

Zoellick is regarded as almost certain to be approved by the bank's 24 board members, a third of whom are European. The nomination does not require Senate confirmation.

"The president believes that Bob Zoellick's experience and long career in international trade, finance and diplomacy make him uniquely prepared to take on this challenge," said the senior administration official, who refused to be identified because Bush does not plan to formally nominate Zoellick until today.

"He has the trust and respect of many officials around the world."

Since the World Bank and the International Monetary Fund were created in 1944 to put the world's financial system back together after World War II, the United States has named the World Bank president and the Europeans have chosen the managing director of the IMF, which aids countries undergoing financial crises, usually by forcing them to adopt austere spending and tax policies while the bank provides grants and low-interest loans to the poorest countries.

Because he had been Bush's deputy secretary of defense and an architect of the invasion of Iraq in 2003, Wolfowitz had one strike against him, in the view of many on the bank's staff, when he was named the institution's president two years ago.

He quickly got a second strike by surrounding himself with high-paid aides from the Pentagon and seeming to exclude the bank's career experts from influential roles.

The third strike came this year when it was revealed that Wolfowitz had helped approve pay raises for his companion, Shaha Ali Riza, as compensation for her being forced off the bank's staff to avoid a conflict of interest.

Riza was detailed to the State Department but was still paid by the World Bank. Her $193,590 salary exceeded that of Secretary of State Condoleezza Rice.

Zoellick, by contrast, will arrive at the bank with a reputation as a straight shooter.

"He believes deeply in the World Bank's mission of lifting people out of poverty," the senior administration official said.

While U.S. trade representative, a Cabinet-level position, in Bush's first term, Zoellick was involved in negotiations to bring China and Taiwan into the World Trade Organization.

At the beginning of Bush's second term, he moved to the State Department, where he focused on U.S. relations with China and on efforts to end the violence in the Darfur region of Sudan.

As an aide to President George H.W. Bush, he helped negotiate the North American Free Trade Agreement with Canada and Mexico.

"Through his leadership for international trade, I know he has a real understanding of what it takes to advance economic development in poor countries," Sen. Charles E. Grassley of Iowa, the top Republican on the Senate Finance Committee, said in a statement.

"At the World Bank, I want to see Ambassador Zoellick continue the vigorous campaign that Paul Wolfowitz started against corruption in beneficiary countries," Grassley said. "The World Bank is in need of reform from top to bottom."

Bea Edwards, international director of the Government Accountability Project, a whistleblower protection organization that revealed much of the information that led to Wolfowitz's resignation, said the choice of Zoellick was no surprise.

"He's a free trader who could shore up the administration's trade agenda," she said.

But from the standpoint of the Europeans and the developing world, which are not so wedded to free trade, Zoellick is "another in-your-face" appointment, Edwards said.

Joel Havemann and Maura Reynolds write for the Los Angeles Times.

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