World Bank mulls Wolfowitz


Summary

White House support for the development lender’s embattled head appeared to weaken as European countries pushed hard for his departure.

And ABC News reported, citing bank officials, that Mr Wolfowitz was near an agreement to resign, perhaps as early as Wednesday, in a face-saving compromise deal.

World Bank officials said the bank’s executive directors are completing an “exit strategy” that will allow Mr Wolfowitz to resign and “still save some face” over his efforts to arrange a generous promotion and pay raise for his companion, a fellow bank employee, ABC News said.

The officials said the bank’s 24-member board would accept Mr Wolfowitz’s resignation but would also acknowledge that the World Bank’s ethics committee bears “some responsibility” for giving him bad advice on how to handle the conflict-of-interest situation with his girlfriend, Shaha Riza.

“The decision is likely today” because Mr Wolfowitz had been scheduled to leave late Wednesday for a European trip, ABC News said.

The report could not be immediately confirmed with the World Bank or Mr Wolfowitz’s lawyer.

CNBC television business news, meanwhile, reported that the lawyer, Robert Bennett, and World Bank officials were in teleconference negotiations that have reached a “critical” stage.

The flurry of reports came as World Bank directors continued deliberations, which began on Tuesday, at a meeting where Mr Wolfowitz begged to keep his job.

The US administration has so far resolutely backed Wolfowitz despite persistent calls for him to resign during the month-old scandal over the pay-and-promotion package he approved for Riza.

But that support seemed to be crumbling.

“This has certainly been a bruising episode to the bank and what you have to do is to figure out a way forward to maintain the integrity of the institution, and therefore when you do it you discuss everything,” spokesman Tony Snow said.

His comments were strengthened by State Department spokesman Tom Casey who warned that “the bank is bigger than any individuals, past, present or future.”

Mr Snow dodged questions about whether White House backing for Mr Wolfowitz was wavering, adding the administration of President George W. Bush still supported him.

Mr Wolfowitz, 63, who has steered the 185-country bank for nearly two years, pleaded with directors Tuesday to let him stay on in the post, in which he has made fighting corruption a priority.

“I have said I am not without fault in the matter,” Mr Wolfowitz said of the scandal surrounding his girlfriend, who ended up earning almost 200,000 dollars a year when she was transferred to the State Department, still on the World Bank’s payroll.

“I implore each of you to be fair in making your decision, because your decision will not only affect my life, it will affect how this institution is viewed in the United States and the world,” he said.

The former US deputy defence secretary and Iraq war architect nominated to head the World Bank by the Bush administration, acknowledged he had relied too much on advisers he brought with him when he became president of the poverty-fighting bank in June 2005, and pledged to change his management style “to regain the trust of the staff.”

But his arguments risk falling on deaf ears after an internal report found that Mr Wolfowitz had breached the bank’s ethics rules.

Several members of the US administration, quoted by The Washington Post on Wednesday, said the US and European countries were mulling a solution under which Mr Wolfowitz would resign after having been cleared of any wrongdoing.

“The message to the board is ‘don’t fire him based on the personnel infraction.’ Then if you want to have a bigger, broader conversation we’ll engage in it,” one administration official told the paper, asking to remain anonymous.

One possible solution would be to reprimand Mr Wolfowitz while at the same time highlighting the lack of clarity in the bank’s conflict-of-interest rules, the Post said.


White House support for the development lender’s embattled head appeared to weaken as European countries pushed hard for his departure.

And ABC News reported, citing bank officials, that Mr Wolfowitz was near an agreement to resign, perhaps as early as Wednesday, in a face-saving compromise deal.

World Bank officials said the bank’s executive directors are completing an “exit strategy” that will allow Mr Wolfowitz to resign and “still save some face” over his efforts to arrange a generous promotion and pay raise for his companion, a fellow bank employee, ABC News said.

The officials said the bank’s 24-member board would accept Mr Wolfowitz’s resignation but would also acknowledge that the World Bank’s ethics committee bears “some responsibility” for giving him bad advice on how to handle the conflict-of-interest situation with his girlfriend, Shaha Riza.

“The decision is likely today” because Mr Wolfowitz had been scheduled to leave late Wednesday for a European trip, ABC News said.

The report could not be immediately confirmed with the World Bank or Mr Wolfowitz’s lawyer.

CNBC television business news, meanwhile, reported that the lawyer, Robert Bennett, and World Bank officials were in teleconference negotiations that have reached a “critical” stage.

The flurry of reports came as World Bank directors continued deliberations, which began on Tuesday, at a meeting where Mr Wolfowitz begged to keep his job.

The US administration has so far resolutely backed Wolfowitz despite persistent calls for him to resign during the month-old scandal over the pay-and-promotion package he approved for Riza.

But that support seemed to be crumbling.

“This has certainly been a bruising episode to the bank and what you have to do is to figure out a way forward to maintain the integrity of the institution, and therefore when you do it you discuss everything,” spokesman Tony Snow said.

His comments were strengthened by State Department spokesman Tom Casey who warned that “the bank is bigger than any individuals, past, present or future.”

Mr Snow dodged questions about whether White House backing for Mr Wolfowitz was wavering, adding the administration of President George W. Bush still supported him.

Mr Wolfowitz, 63, who has steered the 185-country bank for nearly two years, pleaded with directors Tuesday to let him stay on in the post, in which he has made fighting corruption a priority.

“I have said I am not without fault in the matter,” Mr Wolfowitz said of the scandal surrounding his girlfriend, who ended up earning almost 200,000 dollars a year when she was transferred to the State Department, still on the World Bank’s payroll.

“I implore each of you to be fair in making your decision, because your decision will not only affect my life, it will affect how this institution is viewed in the United States and the world,” he said.

The former US deputy defence secretary and Iraq war architect nominated to head the World Bank by the Bush administration, acknowledged he had relied too much on advisers he brought with him when he became president of the poverty-fighting bank in June 2005, and pledged to change his management style “to regain the trust of the staff.”

But his arguments risk falling on deaf ears after an internal report found that Mr Wolfowitz had breached the bank’s ethics rules.

Several members of the US administration, quoted by The Washington Post on Wednesday, said the US and European countries were mulling a solution under which Mr Wolfowitz would resign after having been cleared of any wrongdoing.

“The message to the board is ‘don’t fire him based on the personnel infraction.’ Then if you want to have a bigger, broader conversation we’ll engage in it,” one administration official told the paper, asking to remain anonymous.

One possible solution would be to reprimand Mr Wolfowitz while at the same time highlighting the lack of clarity in the bank’s conflict-of-interest rules, the Post said.