World Bank president Paul Wolfowitz's future was hanging in the balance yesterday after a scathing internal report accused him of breaking the rules by securing a generous pay deal for his girlfriend while the US tried to rally support from fellow G7 members by telephone.
A month of scandal surrounding Wolfowitz has divided the bank's 185 member states, with US President George W. Bush standing by Wolfowitz and European governments and others pushing for his exit.
Wolfowitz, 63, was to appear before the 24 member executive board yesterday. The board is unlikely to make a final decision before today, and it was still unclear early yesterday if they would be forced to vote on the issue or decide by consensus.
One board official said member countries will make another effort to resolve their differences and Wolfowitz still had a chance of rescuing his job, depending on whether he could present a clear plan for how he could rebuild his credibility.
The special panel set up by the board to look into the scandal said Wolfowitz clearly violated the bank's code of conduct in arranging the pay and promotion package for his girlfriend and fellow bank employee, Shaha Riza. The report echoed the previous findings of an ethics panel.
"Wolfowitz did not comply with the provision in his contract that required him to `avoid any conflict of interest, real or apparent,'" the panel wrote regarding Riza's reassignment.
It also found Wolfowitz had violated the bank code of conduct "requiring that he withdraw from `participation in deliberations or decision-making' when he involved himself in the specific terms of Ms. Riza's external assignment."
Documents released by the bank's executive directors have exposed Wolfowitz's hand in a pay package worth nearly US$200,000 that was given Riza when she was reassigned to the US State Department in September 2005 to prevent any conflicts of interest with her new boss.
The investigative panel recommended the board "consider whether Mr. Wolfowitz will be able to provide the leadership needed to ensure that the bank continues to operate to the fullest extent possible in achieving its mandate."
The panel said it had considered Wolfowitz's version of events but "decided that nothing in it alters the central conclusions reached in this report."
In what the panel described as the "central theme" of the matter, Wolfowitz "saw himself as the outsider to whom the established rules and standards did not apply."
In documents released late on Monday, Wolfowitz called the findings "unbalanced and flawed" and argued that the panel had omitted statements and documents that support his position.
Bush continued to stand behind Wolfowitz, White House spokesman Tony Snow said on Monday.
The Financial Times reported that the US was seeking an "emergency" conference call of G7 ministers to persuade them to let Wolfowitz keep his job.
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