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Pressure grows on Wolfowitz in promotion scandal
13 Apr 2007 23:09:26 GMT
Source: Reuters
(Adds White House, Canadian finance minister paragraphs 9-12)

By Lesley Wroughton

WASHINGTON, April 13 (Reuters) - Pressure for World Bank President Paul Wolfowitz to resign grew on Friday as the bank's board wrangled behind the scenes over whether his approval of a high-paying promotion for his girlfriend bent rules.

The controversy overshadowed the start of meetings here of finance and aid ministers from rich and developing countries.

World Bank staff and global development organizations called for Wolfowitz to step down as anger increased even after a public apology on Thursday in which he said he erred in the handling of the 2005 promotion of Shaha Riza, a former senior communications officer in the bank's Middle East Department.

Bank staff expressed their outrage on internal Internet bulletin boards, which included calls for Wolfowitz to resign and support for a staff protest on Saturday.

The outpouring reflected resentment over Wolfowitz's close ties to the Bush administration and his role as an architect of the Iraq war while he was U.S. deputy defense secretary.

The case has been an embarrassment to Wolfowitz, who has aggressively campaigned for sound governance and against corruption since taking up the post in 2005.

Finance ministers in Washington for the meetings refused to prejudge Wolfowitz's actions or say whether he should stay or go, saying it was a matter for the World Bank's board.

"We must just allow the process to work through," said South African Finance Minister Trevor Manuel.

As Wolfowitz headed into a meeting with officials of the Group of Seven top industrial countries, the United States, which holds the largest stake in the bank, gave him its full support.

"He's apologized for the matter and his board is undergoing an internal review and we expect him to remain as World Bank president," White House spokeswoman Dana Perino said.

The issue has also arisen in one-on-one talks between Wolfowitz and other member countries.

"I can tell you that I am satisfied based on what he told me that the process was followed," Canadian Finance Minister Jim Flaherty told Canadian Broadcast Corporation television.

The bank's board, made up of representatives of 185 member countries, failed to reach a final decision overnight over whether Wolfowitz, 63, gave preferential treatment to Riza.

Riza was assigned outside the bank to work with the U.S. State Department, but has remained on the bank's payroll.

The board said Wolfowitz, who revealed his relationship with Riza while he was negotiating his own job contract, signed off on the promotion and salary increase for Riza without prior approval by its ethics committee nor its chairman.

A board source told Reuters if Wolfowitz "guided" the salary negotiation process, it would then be considered a breach of the board's ethics code.

World Bank staff sought to keep the public focus on the bank's mission to end global poverty.

"What is being discussed in media and within the bank has no interference with the efficacy of the institution," Francois Bourguignon, the bank's chief economist, told a news conference on global development trends.

European anti-poverty groups said Wolfowitz's position was untenable. "European governments must join others to demand Wolfowitz's resignation and institute real changes," said Nuria Molina of Eurodad, a network of European development groups.
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