Wolfowitz controversy in spotlight after stormy World Bank meetings

WASHINGTON: Embattled World Bank president Paul Wolfowitz clung to his job on Monday after a stormy week of revelations on a pay scandal involving his girlfriend that is to be examined soon by the organization's board of directors.   

The board, set to meet this week to consider the implications of the hefty pay hikes given to Wolfowitz's partner from World Bank coffers, is facing increasing pressure on the scandal.   

The New York Times on Monday called for the ouster of Wolfowitz, arguing he had "fallen far short of his own standards" of good governance.   

"What might Mr. Wolfowitz himself say if he discovered that a government receiving World Bank loans was making similar sweet arrangements for the personal friends of its president?" the paper asked in an editorial.   

"There is no way Mr. Wolfowitz can recover his credibility and continue to be effective at the bank."   

Wolfowitz told reporters after the bank's spring meeting in Washington that he has important work to do and added: "I intend to continue with it."   

"We intend to abide by a high standard of internal governance here at the bank," Wolfowitz said, using the wording of the communique published by the joint committee of the World Bank and IMF.   

The 185-member bank's ministerial policymakers remained split on his fate.   

Finance and aid ministers from the United States, Europe and other members expressed "great concern" in a statement after the bank's spring meeting.   

"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," they 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 bank pay deal worth nearly 200,000 dollars.   

"Basically he's survived the weekend," said Manish Bapna, director of the Bank Information Center, an independent group which tracks World Bank affairs.   

"But he's about to embark on the IDA (International Development Association) replenishment process in such a vulnerable state that he will not be able to fulfill this most important task," he said.   

The IDA is the arm of the World Bank Group that offers grants and interest-free loans to the most impoverished nations, whose paltry spending budgets would face a black hole without its aid.   

The European Commission meanwhile also expressed concern over the situation after sharp comments last week from French officials.   

Tradition since the founding of the World Bank dictates that the United States selects a head of the lender, while Europe chooses the leader for its sister institution, the International Monetary Fund.   

So far, Washington has held firm to its endorsement of Wolfowitz, who is seen as a protege of Vice President Dick Cheney. The Wall Street Journal wrote Monday meanwhile that Wolfowitz was the victim of a "smear" campaign.   

The Journal said the evidence so far suggested "that this flap is a political hit based on highly selective leaks to a willfully gullible press corps."   

The daily said Riza, a bank public relations officer, was correctly reassigned to avoid a conflict of interest and that she had been on a promotion list.   

"Mr. Wolfowitz's only real mistake was in assuming that everyone else was acting in good faith," the editorial said.   

"It's clear that his enemies -- especially Europeans who want the bank presidency to go to one of their own -- are now using this to force him out of the bank. They especially dislike his anticorruption campaign."