Pressure Increases on Wolfowitz
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

WASHINGTON (AP) – Europeans stepped up pressure on World Bank President Paul Wolfowitz to resign as they expressed fresh concerns Tuesday about his leadership amid revelations that he broke bank rules in arranging a pay package for his girlfriend.
As questions mounted about Mr. Wolfowitz’ ability to continue to run the poverty-fighting institution, the White House appeared to take a bit of a hands-off approach, with presidential spokesman Tony Snow directing most questions about Mr. Wolfowitz to the World Bank.
Mr. Snow reaffirmed President Bush’s support for Mr. Wolfowitz, but would not say whether he is insisting to allies or others that Mr. Wolfowitz remain on the job.
Critics – including many European countries, many on the bank’s staff, aid groups and others – want Mr. Wolfowitz to resign. They contend the controversy has tarnished the institution’s reputation and could hobble its ability to raise billions of dollars from countries around the world to bankroll a bank program to provide financial help to poor nations.
“What we need is a president with a good reputation and integrity,” Dutch Finance Minister Wouter Bos said at a meeting of European finance officials in Brussels, Belgium. Mr. Bos went on to say that he has “serious doubts” about the integrity of Mr. Wolfowitz.
Belgium’s Finance Minister Didier Reynders struck a similar chord, saying: “It is impossible to go around the world speaking about good governance without good governance at the World Bank.”
By tradition, the World Bank has been run by an American. President Bush tapped Mr. Wolfowitz, a move that was approved by the bank’s board. America keenly wants to keep that tradition firmly intact.
“We still support President Wolfowitz,” Mr. Snow said Tuesday. But he added that Mr. Bush “is not getting directly, personally involved to my knowledge. … The conversations right now are not between the administration and the World Bank. I think it’s proper to let the process work itself out rather than trying to insinuate ourselves in it.”
A special panel at the World Bank, which has been investigating the matter for a month, has found that Mr. Wolfowitz ran afoul of bank rules in securing the 2005 promotion and pay package for bank employee Shaha Riza.
The report was not made public, but a person familiar with its findings confirmed that violations were cited but did not provide any details. The person spoke on the condition of anonymity because the report has not yet been released.
Among the things the special panel has been looking at is whether Wolfowitz violated bank rules, including conflict-of-interest rules, in getting involved in Ms. Riza’s promotion and compensation package.
The bank’s 24-member board will decide what action should be taken, if any. A decision is expected soon.
A range of disciplinary options has been discussed. The board could fire Mr. Wolfowitz, ask him to resign, signal that it lacks confidence in his leadership, reprimand him or take no action. Some believed that prospects were fading for a compromise under which Mr. Wolfowitz would avoid a harsh reprimand but would resign anyway.
Mr. Wolfowitz has maintained that he acted in good faith in arranging Ms. Riza’s pay package and has accused his critics of launching a “smear campaign” against him.
The bank’s executive directors, however, have said the terms and conditions of the package had not been “commented on, reviewed or approved” by the bank’s ethics committee, its chairman or the bank’s board.
A person close to the investigation said there was a recognition in the special panel’s report that some of the ethics committee’s direction concerning the matter wasn’t clear.
Ms. Riza worked for the bank before Wolfowitz took over in June 2005. She was moved to the State Department to avoid a conflict of interest but stayed on the bank’s payroll. Her salary went from close to $133,000 to $180,000. With subsequent raises, it eventually rose to $193,590.
Before he took over the bank, Mr. Wolfowitz was the No. 2 official at the Pentagon. He helped mapped the American-led war in Iraq.
America is the bank’s largest shareholder, and Bush has said Wolfowitz should remain on the job. European countries, however, are leading the charge for Mr. Wolfowitz to go.