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But, I sympathize a bit with Wolfowitz's dilemma here. The World Bank had a policy against romantically involved people working together, so something needed to be done about the fact that his girl friend worked there if he was going to take the job. But it wasn't exactly fair to fire his girl friend so he could get a job, so he just arranged a kind of lucrative severance package for her. Of course he should have recused himself from any involvement in the negotiations, but I think it was the World Bank board that told him to handle this situation. So he did.
Unfortunately for him, for whatever reason, he had pissed off a lot of the World Bank staff and this little incident really gave them the ammunition to get him. So has he been an incompetent World Bank manager? Well he apparently brought in some fellow neocon cronies which didn't sit well with the World Bank establishment, but has he done a bad job? I don't know, but there is a lesson here. If you're going to take over an organization and shake it up, don't do things that are going to give your enemies the tools they need to bring you down. And maybe the fact that Wolfowitz did this should just be seen as one more example of the kind of incompetence that made him such a star with Bushco, but that isn't all that useful in other organizations.