Wolfowitz fights on as WB split over scandal

WASHINGTON – World Bank president Paul Wolfowitz Sunday refused to quit office as the development lender’s member governments revealed their “great concern” over a pay scandal engulfing the US official.

Despite reaching a consensus position on the scandal, which involves hefty pay hikes personally ordered by Wolfowitz for his bank employee girlfriend, the 185-member bank’s ministerial policymakers remained split on his fate. “The current situation is of great concern to all of us,” finance and aid ministers from the United States, Europe and other World Bank members said in a statement after annual spring talks here.”We have to ensure that the bank can effectively carry out its mandate and maintain its credibility and reputation as well as the motivation of the staff,” the statement said.The ministers said they would await the findings of a review by the World Bank’s executive board into the conduct of Wolfowitz, who directed that his Libyan-born partner, Shaha Riza, get a pay deal worth nearly US$200 000.The former deputy US defence secretary echoed that the board should be allowed to complete its work.But he also stressed his determination to continue the global lender’s work on improving the plight of the poorest nations, especially in Africa, which he said was on the verge of a “historic turning point” for the better.”This is important work and I intend to continue it,” Wolfowitz told a news conference after a weekend of heated speculation at meetings of global financial leaders over whether the Riza affair would bring him down.Wolfowitz, a driving force behind the US-led war in Iraq, faces demands for his resignation from the World Bank’s staff association, which says he has “destroyed” their trust, and a raft of campaigners.Battle lines were drawn between European governments, which have long been suspicious of the former Pentagon deputy, and a camp of Wolfowitz backers that includes the United States, Japan and some African countries.”We intend to abide by a high standard of internal governance here at the bank,” Wolfowitz said, adding: “It’s a serious issue.”But referring to the ministerial statement, he said: “I think it speaks for all of us on our desire for the board to look into the matter and to conclude its work.”Asked if it was hypocritical for him to stay in office while waging a war on corruption in the World Bank’s US$24 billion annual lending, he said: “I’m not commenting on the premise of the question.I will just stop there.”But with a slew of European officials lining up to question whether Wolfowitz’s credibility is in shreds, Germany said that the ministerial statement amounted to a stinging rebuke.”It was important to lay down the line.And the fact that the United States itself accepted it reinforces the message,” German development minister Heidemarie Wieczorek-Zeul told reporters.”An institution like the World Bank lives by its moral authority and its credibility,” she stressed.Riza’s package included an immediate US$60 000 pay rise and guaranteed promotions, eventually taking her up to the highest career rank of vice president, once she returned from an outside assignment to the US government.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.Nampa-AFP”The current situation is of great concern to all of us,” finance and aid ministers from the United States, Europe and other World Bank members said in a statement after annual spring talks here.”We have to ensure that the bank can effectively carry out its mandate and maintain its credibility and reputation as well as the motivation of the staff,” the statement said.The ministers said they would await the findings of a review by the World Bank’s executive board into the conduct of Wolfowitz, who directed that his Libyan-born partner, Shaha Riza, get a pay deal worth nearly US$200 000.The former deputy US defence secretary echoed that the board should be allowed to complete its work.But he also stressed his determination to continue the global lender’s work on improving the plight of the poorest nations, especially in Africa, which he said was on the verge of a “historic turning point” for the better.”This is important work and I intend to continue it,” Wolfowitz told a news conference after a weekend of heated speculation at meetings of global financial leaders over whether the Riza affair would bring him down.Wolfowitz, a driving force behind the US-led war in Iraq, faces demands for his resignation from the World Bank’s staff association, which says he has “destroyed” their trust, and a raft of campaigners.Battle lines were drawn between European governments, which have long been suspicious of the former Pentagon deputy, and a camp of Wolfowitz backers that includes the United States, Japan and some African countries.”We intend to abide by a high standard of internal governance here at the bank,” Wolfowitz said, adding: “It’s a serious issue.”But referring to the ministerial statement, he said: “I think it speaks for all of us on our desire for the board to look into the matter and to conclude its work.”Asked if it was hypocritical for him to stay in office while waging a war on corruption in the World Bank’s US$24 billion annual lending, he said: “I’m not commenting on the premise of the question.I will just stop there.”But with a slew of European officials lining up to question whether Wolfowitz’s credibility is in shreds, Germany said that the ministerial statement amounted to a stinging rebuke.”It was important to lay down the line.And the fact that the United States itself accepted it reinforces the message,” German development minister Heidemarie Wieczorek-Zeul told reporters.”An institution like the World Bank lives by its moral authority and its credibility,” she stressed.Riza’s package included an immediate US$60 000 pay rise and guaranteed promotions, eventually taking her up to the highest career rank of vice president, once she returned from an outside assignment to the US government.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.Nampa-AFP