- The Washington Times - Tuesday, May 15, 2007

1:17 p.m.

The Bush administration contended today that Paul Wolfowitz should remain at the helm of the World Bank, arguing that nothing he did in connection with his girlfriend’s lucrative pay package amounted to a firing offense.

Mr. Wolfowitz, who maintains that he acted in good faith, is waging a vigorous fight to keep running the institution. He will try to defend himself before the bank’s 24-member board later today. The board, whose proceedings are carried out behind closed doors, ultimately will decide what actions to take against him.

Board members have discussed a range of disciplinary options. It could fire Mr. Wolfowitz, ask him to resign, signal that it lacks confidence in his leadership or reprimand him. Board members have been leaning toward an expression of no confidence or other tough language that would make it difficult — if not impossible — for Mr. Wolfowitz to stay.

At the White House, spokesman Tony Snow said he did not think Mr. Wolfowitz had done anything to warrant his resignation.

Mr. Snow said President Bush continues to support Mr. Wolfowitz, who served as the No. 2 official at the Pentagon and played a lead role in mapping out the U.S.-led war in Iraq before taking over the bank nearly two years ago.

“What we’ve said is, yeah, he made mistakes,” Mr. Snow said. “That pretty much is obvious. On the other hand, it’s not a firing offense.”

The White House says the campaign against Mr. Wolfowitz is rooted not as much in what he did but in his role as a key architect of the Iraq war. This proxy fight has made the president more determined to stand behind Mr. Wolfowitz unless the facts make it absolutely clear that his behavior was egregious, a senior administration official said. The official was not authorized to speak publicly on the matter and thus spoke on condition of anonymity.

Secretary of State Condoleezza Rice and Treasury Secretary Henry M. Paulson Jr. also said they don’t think the facts merit Mr. Wolfowitz’s dismissal.

“It doesn’t seem to be the kind of thing that you would want to see the dismissal of the World Bank president over,” Miss Rice said. “I hope it will be resolved in a way that is true to what really happened there but also strengthens the bank, which is a really important institution.”

The controversy that has put Mr. Wolfowitz’s job in jeopardy involves his handling of the 2005 compensation package for his girlfriend, Shaha Riza, a bank employee.

A special bank panel, in a report released late yesterday, concluded that Mr. Wolfowitz broke bank rules in his handling of the pay package. It said the board must consider whether he “will be able to provide the leadership” to ensure that the bank achieves its mission of fighting poverty around the world.

In a response, Mr. Wolfowitz said, “It is highly unfair and unwarranted to now find that I engaged in a conflict of interest because I relied on the advice of the ethics committee as best I understood it.”

The special panel acknowledged that the informal advice provided by the bank’s ethics committee “was not a model of clarity.”

However, it also said that Mr. Wolfowitz’s involvement in the details of Miss Riza’s salary “went beyond the informal advice” given by the ethics committee and that he “engaged in a de facto conflict of interest.”

Under Mr. Wolfowitz’s contract as well as the code of conduct for board officials, he was required to avoid any conflict of interest, the report said.

Miss Riza worked for the bank before Mr. Wolfowitz took over as president 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 rose from close to $133,000 to $180,000. With subsequent raises, it eventually rose to $193,590.

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