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Wolfowitz at the door as World Bank decision nears
M William McQuillen & Peter Cook

 


WHEN Paul Wolfowitz took the top job at the World Bank, his girlfriend already worked there. The rules said he couldn't be her boss. What he did next will, rightly or wrongly, probably get him sacked this week despite a last-minute campaign from the White House to save his job.

Wolfowitz had until late last week to respond to findings by a panel of World Bank directors that his involvement in a pay-and-promotion package for his companion broke bank rules. The committee will then send its report and his response to the full 24-member board, which will meet this week to determine his fate.

European governments including France, Germany, the UK and the Netherlands have been critical of Wolfowitz and have urged a quick resolution of the month-long impasse. President Bush is the only world leader to say Wolfowitz should keep his job, and US officials have warned against haste.

"This shouldn't be rushed, " US Treasury Secretary Henry Paulson said in an interview. "As a governor of the World Bank, I made it very clear to everyone who would listen, and I think it's having a real impact, that this process has got to be fair.'" Directors, who sent Wolfowitz the panel's report on 6 May, earlier gave him three days to respond. Wolfowitz was given two more days after his lawyer, Robert Bennett, said he needed more time to sift through 600 pages of documents received from the board. He called the original deadline "terribly unfair".

South African Finance Minister Trevor Manuel also said that the board's deliberations shouldn't be rushed.

"You can't have a kangaroo court, " he told reporters in Cape Town. He declined to say whether Wolfowitz should keep his job. US Secretary of State Condoleezza Rice has lobbied foreign ministers on Wolfowitz's behalf, expressing "her personal high regard" and praising his work at the bank, spokesman Sean McCormack said.

The bank's board have invited Wolfowitz to appear this week to make his case in person. Members "will then consider all the information available and reach their decisions, " the board said in a statement.

Board members, who have the authority to fire or reprimand Wolfowitz, answer to the bank's 185 member governments. The US has the most clout, with more than 16% of the total votes, followed by Japan with almost 8%, and Germany, France and the United Kingdom, with about 4% each. Other board members represent groups of countries with shares of 5% or less.

European governments have been Wolfowitz's most vocal critics, saying that the controversy has hurt his ability to lead the world's largest development organisation.

Wolfowitz has rejected staff demands for his resignation, saying he's been the victim of a "smear campaign" and that charges against him are "bogus".

"Unfortunately for him, I think there's a lot of unfairness, '' said David Gergen, a professor at Harvard University and a former aide to three US presidents. "His days are numbered, " he added. "The weight of public opinion is going to force him."

Critics have said the controversy has hurt the bank's credibility as it fights corruption and preaches good government among the developing nations that get $23bn in annual aid.

"He's not going to get back the confidence of the staff, " said Morris Goldstein, a senior fellow at the Peterson Institute for International Economics in Washington.

"He's not going to be able to lead an anticorruption campaign in light of the pay package for his girlfriend."

The panel of directors determined that Wolfowitz violated ethics rules when he arranged the deal under which Shaha Riza was transferred to the State Department in 2005 to avoid a potential conflict of interest.

Riza was given a 36% pay raise, to $180,000, with guarantees of future increases of 8% a year, while remaining on the bank payroll. Wolfowitz argued that he was only carrying out the orders of the bank's ethics committee when he arranged the deal.




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