- The Washington Times - Friday, April 20, 2007

2:26 p.m.

The World Bank’s board today ordered an ad hoc group to discuss the fate of President Paul Wolfowitz, whose leadership has been thrown into turmoil by revelations that he helped his girlfriend get a high-paying job.

The 24-member board, in a statement released in the early morning, expressed its “great concern” over the matter and instructed the ad hoc group to take up the matter “immediately.” Officials believed the ad hoc group — whose representatives were not identified — would convene later today.

Mr. Wolfowitz, who has said he made a mistake and has apologized, said he “welcomes the decision of the board to move forward and resolve this very important issue.” He also said he “looks forward to implementing the recommendations of the board.”

It is not clear what action, if any, would be taken in the matter. Many of the bank’s employees, aid groups and some Democratic politicians want Mr. Wolfowitz to resign.

The Pentagon today said a 2005 investigation by its inspector general determined that while he served as deputy secretary of defense, Mr. Wolfowitz had personally recommended that companion Shaha Riza be awarded a 2003 contract to study ways to set up a new government in Iraq. Officials refused to release the report but said it concludes that Mr. Wolfowitz, a chief architect of the Iraq campaign, did not violate ethics regulations.

His nearly two-year tenure at the World Bank, which fights global poverty, has been marked by trouble. The current controversy — that he arranged a promotion and generous compensation for Miss Riza, a bank employee whom he has dated — is calling into question his leadership and has put his job in jeopardy.

The World Bank’s board said today that the situation should be dealt with “urgently, effectively and in an orderly manner.” The ad hoc group will make recommendations to the board’s executive directors. No timetable was provided.

The board asked the ad hoc group to look into Mr. Wolfowitz’s handling of Miss Riza’s compensation package with regard to bank rules and “conflict of interest, ethical, reputational and other relevant standards.”

Other issues were identified that need to be addressed, including “the various public communications made by the bank on the matter and issues around employment contracts made in the Office of the President,” the board said. That was viewed as a reference to salaries paid to Mr. Wolfowitz’s close advisers, Kevin Kellems and Robin Cleveland. Each is paid more than $200,000 a year — compensation that has irked some bank staff.

The United States — the bank’s largest shareholder — is standing by Mr. Wolfowitz.

“As we’ve said before, the president has confidence in Paul Wolfowitz,” White House spokeswoman Dana Perino said yesterday in a fresh statement of support. She also said it is appropriate to let the board’s review process take place.

Although they have not said so publicly, some European governments would like to see Mr. Wolfowitz go but do not want to provoke a fight with the United States.

Under an informal agreement, the United States names the head of the 185-nation World Bank and the Europeans choose the leader of its sister institution, the International Monetary Fund. The controversy over Mr. Wolfowitz could bring this informal arrangement into question.

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