World Bank directors fault Wolfowitz
The 24-member board of governors, which met in Washington, said it found that Mr Wolfowitz signed off on Shaha Riza’s promotion and salary increase without a review by an ethics committee or the board’s chairman. The promotion came shortly after he joined the institution in 2005.
The board’s statement has apparently weakened Mr Wolfowitz’s position, creating a situation which may lead to his resignation.
The review followed media reports claiming that Mr Wolfowitz, 63, broke bank rules in giving an unusually big raise to his girlfriend when she transferred to the US State Department in 2005 to avoid a conflict of interest.
The executive directors will move expeditiously to reach a conclusion on possible actions to take, said a statement issued after the board’s meeting.
In their consideration of the matter the executive directors will focus on all relevant governance implications for the bank, it added.
The board released documents of findings of an ad hoc group that investigated the contract agreed with Ms Riza and also included communications between Mr Wolfowitz, the board and other bank officials.
The scandal overshadowed a meeting of Group of Seven finance ministers in Washington and semiannual meetings of the World Bank and the International Monetary Fund in the US capital at the weekend.
The White House on Friday threw its weight behind the besieged World Bank chief, saying that President George W. Bush has full confidence in him.
Mr Wolfowitz is doing a remarkable job at the World Bank, White House Deputy Press Secretary Dana Perino told a briefing, adding: He has the President’s support.
Ms Perino noted that the bank’s board of governors is reviewing the charges against Mr Wolfowitz and that he has taken full responsibility for promoting his girlfriend and giving her an unprecedented pay raise.
She said that Mr Wolfowitz also had apologised for his behaviour.
The White House spokesperson refused to comment when a reporter asked if she would describe Mr Wolfowitz’s companion as his ‘mistress’.
Not going to go there, said Ms Perino when the reporter insisted for an answer.
Mr Wolfowitz told a news conference on Thursday he was sorry for personally intervening in the matter, but an association representing the bank’s 10,000 staffers demanded he quit.
The association charged that Ms Riza got a raise twice as large as bank rules allow and that her promotion was not properly reviewed.
Critics noted that it’s hypocritical that Mr Wolfowitz has been travelling around the world lecturing a number of leaders about corruption, while he was personally involved in securing a substantial pay raise — from $132,000 a year to $193,000 a year, tax-free, for his girlfriend.
They recalled that Mr Wolfowitz had launched a broad anti-corruption policy after taking over, suspending aid for a time to India, Chad, Kenya and other countries.