Ethics & The World Bank
2005 through mid-2007. At the time he became president of the bank, Mr.
Wolfowitz was romantically involved with an executive at the bank, Shaza Riza.
Mr. Wolfowitz went to the board with an ethics question about their
relationship and her employment, and the bank board advised that Ms. Riza be
relocated to a position beyond Mr. Wolfowitz’s influence because of their
relationship and also because she could no longer be promoted at the bank. On
August 11, 2005, Mr. Wolfowitz wrote a memo to Xavier Coll, the bank’s vice
president of human resources and suggested the following: â??I now direct you
to agree to a proposal which includes the following terms and conditions: The
terms and conditions included her future at the bank when Mr. Wolfowitz was no
longer heading it as well as an obligation to find her other employment. Ms.
Riza now earns $193,590 per year at a nonprofit organization, following a stint
at the State Department at World Bank expense. She earned $132,000 at the World
Bank (a salary that was tax-free because of diplomatic status). Evaluate Mr.
Wolfowitz’s conduct.
a) What ethical issues do you see?
b) Did Mr. Wolfowitz act properly?
c) What should the board have done?
d) The overarching goal of Mr. Wolfowitz’s tenure as head of
the World Bank has been eliminating corruption in all countries that deal with
the bank. What effect does his personal conduct have on that goal?
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