Paul Wolfowitz, the President of the World Bank, is under much pressure for having played a significant role in the promotion and salary increase of a colleague, Shaha Riza with whom he was romantically involved.

The issues here are cronyism, conflicts of interests and fairness.

I asked a friend, Clement Rey, his thoughts about the issue and here is his point of view:

There are three aspects to the story:

1. The romantic relationship.

It was dangerous for Mr. Wolfowitz and Ms. Riza to be part of the same organization with hierarchical links, even though these were not direct.  Even without any wrong-doing this situation might have led some people within the organization to question Mr. Wolfowitz’s integrity.

2. The hiring process:

If the information published in the press is true, Mr Wolfowitz imposed some automatic rules regarding the way Ms. Riza results would be assessed. These rules, imposing an automatic "outstanding" rating for Ms. Riza's accomplishments, translated into a maximum salary increase at every revue. The amount of the salary is not necessarily relevant. What is most disturbing is the mechanism set in place. What should have been the result of an objective review became an imposed and automatic mechanism forcing the people in the revue process to act unethically and maybe unlawfully.

Did Mr. Wolfowitz benefit personally from Ms. Riza’s raises? If that is the case, then we may be dealing not only with an ethical issue but maybe with a legal one as well.

Mr. Wolfowitz’s integrity and judgment is being questioned. It is true that he did apologize and his apology should be accepted. But will that apology repair the damage significantly? Mr. Wolfowitz acted in quality of President of the World Bank, which plays a crucial role in supporting developing countries around the globe. His actions reflect on the credibility of the institution as a whole.

3. Consequence for Ms. Riza.

Ms. Riza really lost credibility too. What if she really deserved the outstanding ratings she received during the last years? No one would believe that now....

Whether Mr. Wolfowitz will be dismissed or resign is still not sure, but the sad story illustrates how poor judgment in facing a conflict of interest can destroy one’s reputation and stain life-long achievements.