Senator Says World Bank Offering $200,000 Golden Parachutes
WASHINGTON (AP) _ The World Bank, which lends money to some of the world’s most poverty- stricke n nations, is offering $200,000 ″golden parachutes″ to officials it is encouraging to retire, a senator says.
The bank acknowledges it will give separation pay to hundreds of employees who are losing their jobs but says figures given by Sen. Alan Dixon, D-Ill., are inaccurate.
Dixon persuaded the Senate to pass a non-binding measure Thursday disapproving U.S. aid to the bank for what he says are ″golden parachutes,″ a phrase used to describe generous severance payments offered by many large corporations to top executives.
Bank spokesman Peter Riddleberger said the payments will come from the bank’s funds and the legislation will have no effect on the decision.
Employees would receive a percentage of a month’s salary for each year worked at the bank as a severance payment, with 15-year employees receiving the equivalent of a month’s salary for each year worked, he said.
The bank had a $1.1 billion profit last year.
Dixon says the payments to 390 bank employees would be ″an outrage″ and would go to ″bankers that have big jobs, a lot of them driven around in limousines, with super-pensions.″
Counters Riddleberger, ″This is standard corporate behavior. ... You simply just don’t say, ’Don’t come to work next week, you’re out.‴
The issue came before the Senate on Wednesday, during consideration of a $9.4 billion supplemental spending bill for this year.
Dixon sought to persuade his colleagues to withhold $100 million in the bill intended for the bank, an international agency that lends $15 billion annually for economic development to poor countries. Under his amendment, the money would instead have been spent for a summer jobs program for low-income youths in this country.
Despite his argument that ″those World Bank people are going to get 200 grand cash for nothing, and all these kids want to do is work,″ Dixon’s measure failed on a 62-33 vote.
Thursday, Dixon came back with a watered-down version of the amendment, this time simply expressing the Senate’s desire that the bank not use American aid in the bill for the severance payments. It passed 90-3.
″We give them a lot of federal taxpayers’ dollars to operate their institution,″ Dixon said after Thursday’s vote. ″I see a certain usefulness for what they do, but they’re very cavalier in the way they operate that thing. They’re using our dollars.″
In a separate interview after the vote, Riddleberger said, ″We’re kind of vulnerable. We don’t have many domestic lobbyists defending us. I take it as a politician trying to serve his constituents the best way he can,″ referring to Dixon’s action.
The bank, with headquarters in Washington, obtains most of its money by borrowing from private institutions. But it derives some money from contributions from 34 wealthy countries including the United States, the biggest donor. Some $207 million in American aid was included in the supplemental bill.
Attempting to modernize and streamline its operations, the bank is paring an estimated 350 to 600 of its 6,000 employees, about 1,200 of whom are Americans.
Last week, the bank’s board of directors - representatives of the countries that donate money to the bank - voted to set aside $101 million for the reorganization.
″That money doesn’t come from any taxpayers’ dollars,″ Riddleberger said. ″It’s from our budget, which comes from our earnings.″
Dixon, however, insisted, ″We give them the money in the first place to generate their profit.″
Riddleberger said ″the financial connection is meaningless here″ and that Dixon’s measure ″won’t change the decision-making by the World Bank to cut back on its budget.″
Riddleberger said ″a substantial amount of the money″ would be used for severance payments, with the rest used to retrain some officials for other jobs and move some workers back to their native countries. He said he could not provide a specific breakdown.