Former World Bank leader James Wolfensohn dies at 86
James Wolfensohn, the urbane investment banker who helped right the finances of major U. S. cultural institutions, including Carnegie Hall and the Kennedy Center, then focused a life’s experience in politics and finance on remaking the World Bank during a tumultuous decade as its president, died Nov. 25 at his home in Manhattan. He was 86
The Institute for Advanced Study, a theoretical research institute in Princeton, N. J., where Wolfensohn was a past board chairman, announced the death. His son Adam Wolfensohn said the cause was complications from pneumonia.
Wolfensohn was often characterized as a modern Renaissance man, as comfortable with the top figures of the arts world as he was with global business leaders and politicians. He was a native Australian who was an Olympic fencer in his youth. A classical music aficionado since his teens, he began cello lessons as an adult from the ailing star Jacqueline Du Pre.
In what he referred to in a Forbes interview as “a totally egocentric affair,” beginning at age 50 he would gather top musician friends at Carnegie Hall to join him for once- a- decade birthday concerts.
A onetime air-conditioning salesman, Wolfensohn climbed the world of high finance and joined the ranks of the global elite at the bond-trading house of Salomon Bros. Inc. in New York. At Salomon, he was put in charge of advising Chrysler as it edged toward bankruptcy in the late 1970s, adding to the sense of economic malaise that, along with the oil embargoes and war in the Middle East, rattled the presidency of Jimmy Carter.
Helping arrange what was then the largest-ever corporate bailout in U. S. history, Wolfensohn was put in weekly contact with top officials such as Paul Volcker, then chairman of the Federal Reserve Board — further lengthening his list of contacts. He also proved his ability to work across borders, smoothing over a cultural rift between combustible Chrysler chief Lee Iacocca and the Japanese bankers who had loaned the Detroit auto company $600 million.
After receiving $ 10 million when Salomon was sold, Wolfensohn started his own boutique consulting firm and gradually built a client list that included companies as diverse as Mercedes Benz and Ralph Lauren.
But it was his work at the World Bank that defined his public life. After a middle-class upbringing in Australia, he wrote, early trips to India and Nigeria as an air-conditioning salesman had left “an indelible mark.”
“The inequity was so striking that I could hardly absorb what was in front of me,” he wrote in his 2010 memoir, “A Global Life.” “I had known what to expect intellectually but the reality was a shock.”
Changing the culture at the World Bank
As a result, even as he built a global career in finance, he trained his sights on the World Bank presidency. He even acquired U.S. citizenship to qualify for the job — under an unwritten rule it is the U.S. president’s job to fill — and put his “golden Rolodex” to work lobbying President Bill Clinton when the position came open in 1995 after the death of Lewis Preston, a former president of J.P. Morgan & Co.
Wolfensohn took over an institution besieged from both sides of the political spectrum. From the left, anti- globalization groups slammed the bank as little more than an extension of U.S. foreign policy, pressing private-sector economics and fiscal restraint on developing nations and ignoring local environmental and cultural concerns in the construction of large infrastructure projects. From the right, the World Bank was seen as an inefficient source of handouts to poorly performing countries.
Wolfensohn did not quickly endear himself to an organization that one of his former staffers likened to a “big battleship,” constrained by its own inertia.
He was apt to break into tears on trips to World Bank work sites in remote villages. He famously said the aim of the organization — a massive and staid bureaucracy — was to “put a smile on a child’s face.”
That comment made him seem a naif to bank staff more acclimated to the organization’s technocratic approach to economic development. Combined with a temper honed on Wall Street and often trained on those who had dissatisfied him, it meant a rocky transition from the private sector to an organization that thrived on international politesse. Wolfensohn was apt to holler at staff and was quick with threats of firing.
He also shattered some taboos — most notably the willingness within the bank to accept corruption as part of the cost of doing business in some parts of the world..
“When I arrived at the bank, I was told, ‘ You don’t talk about the C- word because it is a political issue. The bank is owned by governments, and your charter does not allow you to enter into the political field,’” Wolfensohn said in a 1999 speech in South Africa.
Among his first speeches as bank president was a landmark address on “the cancer of corruption,” in which he made the case that such practices were quite literally taking money away from the poor.
Wolfensohn’s work on corruption has endured. The bank now with regularity debars firms and cancels projects when it finds that payoffs or bribes have been involved.
Wolfensohn, who received an honorary knighthood from Queen Elizabeth II in 1995 for his contribution to the arts, served on corporate and charitable boards.
He admitted to an inability to prioritize, turn down an invitation or reject a request to serve on such boards. Colleagues at the World Bank noted that they would load him down with reading, only to see him disappear into his office and spend the next hours on the phone.
“What can I tell you? You get drawn into things,” he once told an interviewer. “Everything is interesting.”