Wolfowitz in firing line as World Bank meets

WASHINGTON: World Bank policymakers opened a one-day meeting on Sunday with the international community deeply divided over the fate of bank president Paul Wolfowitz, gravely damaged by a pay scandal that has left him clinging to his job.   

Support for the former US deputy defence secretary appeared confined to his old patrons in the US administration and to parts of Africa, with disquiet in Europe deepening over the latest controversy in his stormy two-year tenure.   

Wolfowitz was due to appear before the press later in the day following a meeting of the World Bank Development Committee.   

It would be his first public encounter with the media since the bank's directors released documents revealing that he personally ordered a pay package worth nearly 200,000 dollars for his bank employee girlfriend.   

"The controversy is distracting the World Bank from its mission," German development minister Heidemarie Wieczorek-Zeul told reporters.

British International Development Secretary Hilary Benn said "this whole business has damaged the bank and should not have happened," but added, "we should respect the board process."   

The annual spring meeting of the bank's steering committee "ought to be about the bank's contribution to fighting poverty," he said.

French Finance Minister Thierry Breton pointedly stopped short of endorsing Wolfowitz and stressed that the World Bank should be ethically irreproachable."   

US Treasury Secretary Henry Paulson expressed "very high regard" for Wolfowitz.    

But like other officials, he said he would await a board review of Wolfowitz's involvement in awarding Shaha Riza the extraordinary package when she was reassigned against her will to the US State Department in 2005.   

Riza stayed on the World Bank payroll during her external assignment from its Middle East arm to the State Department, which was designed to prevent conflicts of interest after Wolfowitz took charge of the bank in June 2005.   

Wolfowitz first claimed that he had nothing to do with the generous terms of the assignment, then admitted his involvement but said he acted in part to prevent the bank from being sued by his girlfriend.   

However, following the board's release of the incriminating documents early Friday, his defense was further eroded Saturday by comments from the World Bank's then-top legal officer.   

"I advised the board committee that I did not see any grounds for a successful lawsuit," its former general counsel Roberto Danino told the Financial Times.   

The controversy has erupted at the worst time for Wolfowitz when he is battling to overcome resistance to his flagship campaign against corruption in the World Bank's 24-billion-dollar annual lending.   

Wolfowitz, an architect of the war in Iraq, is also under fire for surrounding himself with a coterie of advisors drawn from the Republican US administration.   

The World Bank staff association says Wolfowitz has "destroyed" the trust of the lender's 10,000 employees and should "act honorably and resign."   

While the World Bank board has the power to fire a president, in practice the lender's chief is a US political appointee and his fate would be decided by governments, notably in Washington and in Europe.   

"The web of entanglement seems to be getting thicker by the day," one former senior staffer said on condition of anonymity.   

"But the question is, can the Europeans get their act together to stand up against the Americans?"   

Wolfowitz does have his supporters, having devoted much effort to cajoling rich countries to give more development funding to Africa.

Liberian Finance Minister Antoinette Sayeh paid tribute to the "visionary leadership" of Wolfowitz, "and we can only say that we look forward to that continuing."