Washington: World Bank executive directors will continue to grapple with the fate of president Paul Wolfowitz on 17 May 2007, the lender said on 16 May, amid reports of a compromise deal to allow his resignation under the cloud of a favouritism scandal.
After a second day of closed-door talks about the row which is seen as damaging the integrity of the poverty-fighting bank, World Bank executive directors will continue their discussions the next day.
Meanwhile, White House support for the development lender’s embattled head appeared to weaken as European countries pushed hard for his departure.
“The executive directors of the World Bank Group continued their deliberations on issues raised by the report of the ad hoc group and in their meetings with Mr Wolfowitz yesterday,” the bank said in a brief statement.
The statement referred to a scathing report released by an internal investigatory panel that found Wolfowitz had violated bank rules in arranging a generous pay-and-promotion package for his companion, Shaha Riza, a fellow bank employee.
At a board meeting on 15 May, Wolfowitz begged to keep his job.
Behind the scenes the next day, efforts were underway to craft a way to ease Wolfowitz out while protecting the bank’s integrity.
A source close to the bank said the deal would allow Wolfowitz to save face while the board would recognize the investigatory panel’s conclusion that the bank itself could have done better in giving him guidance on how to avoid a conflict-of-interest situation with Riza.
CNBC television business news reported that Wolfowitz’s lawyer, Robert Bennett, and World Bank officials were in teleconference negotiations that have reached a “critical” stage.
The US administration has so far resolutely backed Wolfowitz despite persistent calls for him to resign during the month-old scandal over the pay-and-promotion package he approved for Riza.
But that support seemed to be crumbling.
“This has certainly been a bruising episode to the bank and what you have to do is to figure out a way forward to maintain the integrity of the institution, and therefore when you do it you discuss everything,” spokesman Tony Snow said.
His comments were strengthened by State Department spokesman Tom Casey who warned that “the bank is bigger than any individuals, past, present or future.”