Frist Out as Possible World Bank Pres. -- Was UIGEA a Cause?

Frist Out as Possible World Bank Pres. -- Was UIGEA a Cause? 0001

The White House has announced that former U.S. Trade Representative and Goldman Sachs executive Robert Zoellick has been chosen to succeed Paul Wolfowitz as World Bank Group president, officially putting to rest speculation that former Senate majority leader Bill Frist might be tapped for the position. As late as last week, the Wall Street Journal was reporting Frist to be "among [the] favorites" to replace Wolfowitz, receiving "especially close scrutiny" from the Bush administration as a possible candidate. An unidentified source told the Associated Press that Frist had informed the White House on Monday he no longer wished to be considered for the position.

Frist's return to the public eye caught the attention of the poker world, for whom the conservative Republican will always be remembered for having successfully appended the Unlawful Internet Gambling Enforcement Act to must-pass legislation on national security last fall. It is possible Frist's pro-UIGEA stance could have negatively affected his candidacy to head the World Bank.

Headquartered in Washington, D.C., the World Bank Group exists as a U.S.-led collective of international organizations whose nominal purpose is to alleviate the burdens of poverty-stricken countries, thereby increasing global economic stability. Frist's qualifications to lead such a group were hardly overwhelming. Unlike eventual choice Zoellick, whose banking background and work on the international stage as a U.S. Trade Representative represent relevant experience for the job, Frist's candidacy rested largely on his medical missionary work in Africa. After becoming senator in 1995, Frist — a licensed physician — made multiple trips to Africa, returning to secure U.S. funding to fight the spread of infectious diseases, including AIDS, on that continent. Indeed, every White House mention of Frist as a possible nominee included reference to his missionary efforts on behalf of Africa.

Aside from his modest credentials, Frist's endorsement of the UIGEA might also have factored into officials' thinking regarding his suitability to serve as World Bank president. In a dispute brought against the U.S. by the island nation of Antigua and Barbuda, the World Trade Organization ruled earlier this month that the UIGEA in fact placed the U.S. in violation of preexisting trade agreements. As reported in Poker News, the U.S. responded to the WTO ruling by announcing its intention to redefine its international trade commitments to exclude offshore gambling. As the WTO dispute continues, Antigua and Barbuda are meanwhile planning a claim for financial compensation from the U.S. in exchange for their compliance with a ban on online gambling.

Over the past decade, online gambling has emerged as an important boost to the Antigua and Barbuda's economy, representing as much as one-sixth of the country's annual revenue. Since the UIGEA became law, some reports have estimated Antigua and Barbuda to have lost over $100 million in expected revenue, a direct consequence of several online gambling sites' decision to pull out of the American market.

Antigua and Barbuda is part of the Organization of Eastern Caribbean States, a group of islands with limited natural resources and a high vulnerability to natural disasters. As such, the World Bank frequently oversees the granting of aid to countries of the OECS, including Antigua and Barbuda. Naming Frist to head the World Bank would therefore have created a curious, perhaps untenable situation — the man largely held responsible for legislation damaging to the economy of countries like Antigua and Barbuda would have been placed in charge of overseeing developmental assistance for those same countries.

Some in the poker world have attempted to connect Frist's decision not to run for president in 2008 to unpopularity caused by the UIGEA and the method by which it was passed. Such a connection is likely overstated. Three weeks after the UIGEA was signed into law by President Bush last October, Democrats secured the majority in both the House and Senate. Three weeks after that, Frist announced he was no longer considering a run for the presidency, citing his desire to take a "sabbatical from public life." Frist's decision likely had more to do with the Republicans' showing in the 2006 election — for which the UIGEA's unpopularity may have factored in isolated instances — than anything else.

While it is similarly speculative to link Frist's failed bid to become World Bank president to his pro-UIGEA stance, in this case the connection certainly appears more tangible.

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