In late May, when President Bush stood in the Roosevelt Room to announce that Robert Zoellick would succeed Paul Wolfowitz as head of the World Bank, he appeared to have a slight scowl on his face. Bush was no doubt annoyed that Wolfowitz — whom he called "a man of character and integrity" — had been drummed out of the Bank after engineering a pay raise for his girlfriend. But Bush may also have been scowling because he was introducing someone he wasn't particularly fond of. According to former administration officials, Zoellick has never been close to the president, who was known to dislike his egghead lectures and his habit of correcting the boss during meetings.
Of course, the fact that Zoellick isn't a Bush man is precisely the reason why so many observers are cheering his nomination. "Mr. Zoellick is just about everything Mr. Wolfowitz was not," gushed The New York Times editorial page. "He is an able diplomat, experienced and interested in the details of development."
And, at first glance, Zoellick does seem well-suited to avoid repeating Wolfowitz's experience at the Bank. "It's a good sign that he has financial expertise," says Kenneth Rogoff, a former economist at the International Monetary Fund. "The way the World Bank is now, you need to understand things like how loans are structured. Wolfowitz apparently had to have these things translated in terms of home mortgages."
Crucially, Zoellick has support from Europe — where German officials, who led the charge to oust Wolfowitz, fondly remember his role in helping to broker reunification during the first Bush administration. Moreover, despite a résumé that includes Enron and Goldman Sachs, Zoellick seems less in thrall to corporate interests than other Republicans. He reportedly worked behind the scenes to persuade the first Bush administration to sign the 1992 U.N. Framework Convention on Climate Change. And, as U.S. trade representative (USTR) in 2001, he sought to ensure that intellectual property agreements did not hamper access to generic HIV drugs in the developing world. "It was very clear that pharma was trying to yank him back, and he was seen as selling out their interests," says Jeff Bader, who worked under Zoellick at the time.
As I spoke to Zoellick's peers and former colleagues, some went even further in their praise. "If you ask people to name great American strategic thinkers, they would offer names like Kissinger or Brzezinski," says Kurt Campbell of the Center for a New American Security. "Well, Zoellick is one of the great strategic operators working in the intersection of strategy and economics." Miraculously, Robert Zoellick seems to be just about the only person whose reputation has survived close contact with George W. Bush. You might say he sounds too good to be true.
In fact, Zoellick's past suggests he could fall prey to some of the same problems that doomed Wolfowitz.
In 1999, after working at Fannie Mae and teaching for a year at the U.S. Naval Academy, Zoellick took over the Center for Strategic and International Studies (CSIS), vowing to revitalize what he saw as an organization losing its relevancy — the same task he's taking on at the Bank. By most accounts, his attempt to shake things up was a disaster. "From day one, he was in attack mode," says a former staffer. At one early meeting, Zoellick asked for the name of a regional contact, and, when only a junior employee knew the answer, he glared at the executive staff and erupted, "What the hell is wrong with all of you?" He not only incurred the wrath of his employees but also managed to alienate key donors. Hank Greenberg, then head of American International Group, was a major CSIS benefactor who prided himself on his knowledge of China. One story that made the rounds had Zoellick offending Greenberg by telling him that his views on China were facile — not exactly a wise move.
Within four months, Zoellick had run afoul of the think tank's board, and he left to serve as a foreign policy adviser to George W. Bush's campaign. A protégé of James Baker, he assisted his mentor during the Florida recount and then, after the election, was rewarded with the post of U.S. trade representative. Bader says his boss "mellowed" during his stint as USTR: "I think he'd learned from some of his previous management experience the risks in how his personality was perceived."
But other former colleagues say Zoellick was still given to temper tantrums, and they recall that he periodically humiliated employees in public. He was known to hold grudges and could be remarkably thin-skinned. In 2005, the Financial Times reported on a testy exchange between Zoellick and EU Trade Commissioner Peter Mandelson over subsidies for Airbus. According to the paper, the exchange involved Zoellick saying "you don't have to spin" and ultimately "slamming down the telephone." After the story appeared, Zoellick wrote a letter to the editor to dispute that he had hung up first — and to insist that he had never apologized to Mandelson, as the paper reported, "because I had no reason to do so." "I suggest in the future that the FT check its sources," he wrote snippily.
But it isn't just Zoellick's personality that could create problems. There are questions about his politics, too. As USTR, he was unquestionably a brilliant negotiator and managed to keep international economic issues alive in an administration that had mostly lost interest after September 11. But not everyone is convinced that his time there bodes well for the World Bank. "I think his [appointment] is a dagger drawn at the developing countries," Jagdish Bhagwati, an economist at Columbia, told me. Bhagwati is hardly a man of the far left; he has written books defending free trade against anti-globalization activists. But he points out that Zoellick's tenure as USTR involved a much heavier focus on bilateral deals with developing countries than on broad multilateral trade agreements.
The idea, Bhagwati says, was to allow the United States to negotiate with poorer countries one-on-one in order to force them to accept demands unrelated to trade. "He was using bilateral deals with Chile and Singapore to try to ram through restrictions on the use of capital controls," Bhagwati says. "I can't think of a single developmental economist who would say this is a good idea, and it suggests a cavalier interest in developing countries."
Moreover, Zoellick's Office of the USTR often put economic development at the service of the Bush administration's foreign policy. Before the invasion of Iraq, a trade official darkly hinted that the administration would have a "long memory" when it came to those who crossed it. That year, Zoellick scotched a trade deal with New Zealand, which had opposed the war — while fast-tracking a deal with Australia, which had backed it. He also reacted angrily when Egypt balked at supporting a U.S. challenge to Europe's ban on genetically modified foods, announcing that the country had jeopardized its hopes of a free-trade agreement.
During a speech in May 2003, Zoellick said the United States would require "cooperation — or better — on foreign policy and security issues" from potential trading partners. While such a worldview may be defensible from the U.S. trade representative, it could encounter heavy resistance at the World Bank. One of the main complaints about Wolfowitz's anti-corruption campaign was that he conducted it in a haphazard and selective manner: It wasn't always clear why Chad was targeted but not Lebanon, or Uzbekistan but not Tajikistan, and many suspected that Wolfowitz was simply carrying out a neoconservative foreign policy by other means. "I think he sees the bank as another instrument to achieve what I see as long-held goals," one former Bank official told The New Yorker. Given his track record, Zoellick will have to prove quickly that he does not intend to take the same tack.
At the moment, of course, he is sending all the right signals. As USTR, Zoellick hired Chris Padilla, a former Kodak lobbyist, to do public outreach and put a more palatable face on the agency. Padilla, who now works in the Commerce Department, is quietly reaching out to European representatives to assuage their concerns over Zoellick's appointment. Moreover, at the beginning of this month, Zoellick embarked on a two-week listening tour in Africa, Europe, and Latin America — a sign that he is serious about mollifying those countries still seething over Wolfowitz's tenure.
Yet former colleagues at the Office of the USTR note that Zoellick did something very similar in his first year there, making a show of extending an olive branch to labor and environmental groups only to disregard their concerns later. If that's what happens at the World Bank, President Bush won't be the only one scowling.
By Bradford Plumer
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