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World Bank mulls Wolfowitz's fate Pressure grows on World Bank boss
(about 4 hours later)
The board of the World Bank has adjourned a meeting to discuss the fate of its president, Paul Wolfowitz. The executive board of the World Bank has said it did not approve a hefty pay rise ordered by its president Paul Wolfowitz for his partner.
Mr Wolfowitz has faced calls for his resignation over the promotion and pay of his Libyan-born partner, Shaha Riza. Mr Wolfowitz has faced calls to resign after admitting he helped his partner Shaha Riza win a promotion to a high-paying job at the World Bank.
He has apologised for his involvement in the negotiations and said he will accept any decision taken by the board. The board of the international lender earlier adjourned a day-long meeting held to consider Mr Wolfowitz's future.
Earlier, the board said it never gave its approval for the wage rise for Ms Riza ordered by Mr Wolfowitz, despite claims to the contrary by his aides. Mr Wolfowitz has apologised for his handling of the situation.
But the scandal has weakened him at a time when he is facing controversy over an anti-corruption drive that has led to the suspension of aid to some countries.
'Possible actions'
In a statement, the World Bank's board said it had never given its approval for a wage rise for Ms Riza ordered by Mr Wolfowitz, despite claims to the contrary by the World Bank president.
The board said the World Bank's ethics committee "had not been involved in the discussions with the concerned member of staff".The board said the World Bank's ethics committee "had not been involved in the discussions with the concerned member of staff".
Ms Riza's promotion and pay rise has attracted strong criticism from staff within the Bank. "The executive directors will move expeditiously to reach a conclusion on possible actions to take," the board added.
It has weakened Mr Wolfowitz at a time when he is facing controversy over his anti-corruption drive that has led him to suspend aid to some countries. Ms Riza's promotion and pay rise has attracted strong criticism from staff within the bank.
Ms Riza was moved to the state department on secondment when he took the World Bank's top job in 2005, but her salary was still paid by the Bank. Ms Riza, who remains a World Bank employee, was moved to the US state department on secondment when Mr Wolfowitz took the World Bank's top job in 2005.
'Uncharted waters' Mr Wolfowitz - a former US deputy secretary of defence - at first denied that he was involved in the decision about her salary.
Mr Wolfowitz at first had denied that he was involved in the decision about her salary. "In hindsight, I wish I had trusted my original instincts and kept myself out of the negotiations. I made a mistake, for which I am sorry," Mr Wolfowitz said.
"In hindsight, I wish I had trusted my original instincts and kept myself out of the negotiations. I made a mistake, for which I am sorry," Mr Wolfowitz said on Thursday.
He said he had been in "uncharted waters" in his new job and would follow the recommendations proposed by the board.He said he had been in "uncharted waters" in his new job and would follow the recommendations proposed by the board.
"I will accept any remedies they propose," he said. 'Blatant hypocrisy'
The Bank's staff association says the pay rises and promotions Ms Riza received were "grossly out of line" with the World Bank's staff rules. The bank's staff association said the pay rises and promotions Ms Riza received were "grossly out of line" with the World Bank's staff rules.
"The president must acknowledge that his conduct has compromised the integrity and effectiveness of the World Bank Group," staff association representative Alison Cave said in remarks presented during a staff meeting on the matter. "The president must acknowledge that his conduct has compromised the integrity and effectiveness of the World Bank Group," said staff association representative Alison Cave.
Trust
She added that his actions had destroyed the staff's trust in his leadership.She added that his actions had destroyed the staff's trust in his leadership.
The controversy comes ahead of joint World Bank and IMF spring meetings. In an editorial, Britain's Financial Times newspaper called for Wolfowitz to step down.
Mr Wolfowitz - formerly US deputy secretary of defence - has adopted a fiercely anti-corruption stance. "If the president stays, (the World Bank) risks becoming an object not of respect, but of scorn, and its campaign in favour of good governance not a believable struggle, but blatant hypocrisy," it said.
The latest furore threatens to undermine his personal campaign to combat corruption and poor governance.
Ms Riza had been a high-ranking communications employee at the bank working in the Middle East section.Ms Riza had been a high-ranking communications employee at the bank working in the Middle East section.
When Mr Wolfowitz took over at the Bank in mid-2005, Ms Riza - then a World Bank employee for eight years - was transferred to work for the US state department, to avoid any conflict of interest. When Mr Wolfowitz took over at the bank in mid-2005, Ms Riza - then a World Bank employee for eight years - was transferred to work for the US state department, to avoid any conflict of interest.
But rapid rises in her tax-free World Bank salary to about $193,000 - more than the $186,000 Secretary of State Condoleezza Rice receives before tax - have aroused ire among other Bank employees. But rapid rises in her tax-free World Bank salary to about $193,000 - more than the $186,000 Secretary of State Condoleezza Rice receives before tax - have aroused ire among other bank employees.
AidAid
The controversy comes ahead of joint World Bank and IMF spring meetings.
While facing press questions about the case, Mr Wolfowitz has tried to shift focus back to the bank's remit of fighting global poverty.While facing press questions about the case, Mr Wolfowitz has tried to shift focus back to the bank's remit of fighting global poverty.
He said the world's richest nations had given 5% less aid over the past 12 months.He said the world's richest nations had given 5% less aid over the past 12 months.
"We have yet to see evidence of significant new flows translate into real resources for development programmes on the ground," he said."We have yet to see evidence of significant new flows translate into real resources for development programmes on the ground," he said.
Ministers and trade leaders from the 185-nation organisation are to meet on Saturday and Sunday in Washington.Ministers and trade leaders from the 185-nation organisation are to meet on Saturday and Sunday in Washington.
The agenda will include issues including fighting diseases and the state of the world economy.The agenda will include issues including fighting diseases and the state of the world economy.