World Bank mulls Wolfowitz’s terms

The World Bank’s board is negotiating an exit package for President Paul Wolfowitz that should end his tumultuous two-year tenure that burst into acrimony over his role in directing a high-paying promotion for his girlfriend, board sources said yesterday.

“They have resumed the meeting and are finalizing a deal,” one of the board sources said after an adjournment of an earlier board meeting at the request of the United States.

The bank said it would resume its negotiations in the morning.

The board sources, from developed and developing countries, said details of a package, including financial compensation, were being discussed with Mr. Wolfowitz’s lawyer.

His departure would include an acknowledgment from the bank that he doesn’t bear sole responsibility for the controversy surrounding a generous pay package for his girlfriend, an anonymous bank official said yesterday.

The official said Mr. Wolfowitz wanted the bank to accept some responsibility for conflicts of interest cited against him by a special bank panel. It was not clear whether the bank’s 24-member board would agree to Mr. Wolfowitz’s terms.

But Mr. Wolfowitz’s lawyer said yesterday that he will not resign under the current “cloud” and would rather push the matter to a vote of the bank’s board to clear his name.

“Mr. Wolfowitz will not resign under this cloud, and he will rather put this matter to a full vote,” Robert Bennett said.

Under a contract he signed in June 2005 when he became World Bank president, Mr. Wolfowitz would receive a year’s salary, or about $375,000, if his service were terminated by the board or if he resigned.

The resignation of the former U.S. deputy defense secretary and architect of the Iraq war would end a protracted and messy battle over the pay and promotion deal he approved for World Bank Middle East expert Shaha Riza when he joined the bank.

The 185-nation World Bank provides more than $20 billion a year for projects that include building dams and roads, bolstering education and fighting disease.

The bank, created in 1945 to rebuild Europe after World War II, has evolved into a major development organization. A centerpiece program provides interest-free loans to the poorest countries.

Pressure to resign increased yesterday as European countries signaled they would resist a bid by the United States to keep Mr. Wolfowitz in the job in the face of a damaging report by a board panel issued Monday that found he broke bank ethics rules negotiating the package.

The board was discussing whether to endorse the report yesterday when the United States requested a recess to consider its position.

One source said when the meeting resumed at 2:30 p.m. discussions had begun over how Mr. Wolfowitz might resign.

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