Why do people do these things?

Regarding Paul Wolfowitz's rather curious human resources decision, in which in order to avoid the "perception of a conflict," he got his paramour transferred from the World Bank to a job at the State Department and engineered a salary for her higher than Condi Rice's, Hilzoy asks,

Question: why do people do this stuff? When you're a public figure, your conduct will be scrutinized. This is beyond obvious. I would have thought it would also be beyond obvious that in view of that fact, if a public figure tries to pull this kind of thing, he or she is very, very likely to end up regretting it. So I would have thought the obvious thing to do, just on prudential grounds, would be to bend over backwards not to break the rules in order to get your girlfriend a salary that's considerably higher than the Secretary of State's. It always amazes me when people don't get this. -- I mean: I would of course hope that they'd do the right thing on principle, but in cases like these, the right thing is also very obviously the smart thing. And yet, over and over again, purportedly smart people do things like this. One of life's little mysteries, I suppose.

Hilzoy's generally a smart person, but willfully obtuse here, I think. This is not "one of life's little mysteries." This is Paul Wolfowitz. You might recall, he's the guy who was the architect of the war in Iraq.

Good God. His fine work at the Pentagon has left the United States staggering and Iraq in flames. Destroying the World Bank's reputation would be, by way of contrast, rather small potatoes.