World Bank president Paul Wolfowitz cancelled a speech to a health conference on Thursday as the bank’s board met late into the night to discuss a controversy over the promotion of his girlfriend, which has paralysed the poverty-fighting institution.
A board statement is expected at the end of the meeting.
Board sources said there appeared to be divisions among the board members, with the United States leading a bloc of countries, including some from Asia, who supported Wolfowitz despite questions about his leadership and calls for him to quit.
Some European countries have expressed concern that the scandal has damaged the bank’s credibility.
The bank’s staff association, which has led the calls for Wolfowitz to step down, called on the board, which usually operates in secret, to make its decision public.
”Staff look forward to hearing from them on how this matter will be resolved expeditiously,” the staff association said.
It also encouraged World Bank staff to wear blue ribbons ”as a symbol of our continuing struggle for improved governance at the World Bank”.
Meanwhile, Wolfowitz kept a low profile, staying away from the health conference, sponsored by the bank’s private-sector lending arm, and cancelling a weekly meeting on Friday with his most senior management.
”I’m sorry on behalf of Paul Wolfowitz that he couldn’t come,” International Finance Corp chief Lars Thunell told private-sector delegates at the conference, but offered no explanation for the World Bank chief’s absence.
Wolfowitz has made clear he has no intention of stepping down over the scandal in which he directed a generous promotion for his companion, Shaha Riza, before she was moved outside the bank in 2005 because of their relationship.
Last week, Wolfowitz apologised for how he handled Riza’s promotion, saying he was new at the bank and in ”uncharted waters”.
The White House on Thursday restated its support for Wolfowitz, who had been nominated by President George Bush to head the World Bank.
The United States is the World Bank’s biggest shareholder, holding 16,4% of total board votes, followed by ally Japan which has 7,9%. A major decision by the board requires an 85% majority, with the US holding enough votes to block any major decision.
Anti-corruption efforst
Senior Democratic lawmakers and other critics have demanded Wolfowitz’s resignation, saying his actions have undermined the campaign against corruption in the developing world that has been a hallmark of his tenure.
In other developments, US defence officials on Thursday cleared Wolfowitz in a 2005 investigation by the Pentagon’s inspector general over the hiring of Riza to carry out a study related to Iraq, while she worked at the bank.
Pentagon spokesperson Bryan Whitman said Wolfowitz, a former number two official at the Pentagon and key architect of the Iraq war, may have recommended Riza for the job, but she was also recommended by others and was uniquely qualified.
Still, calls for a speedy resolution to the controversy over Riza’s promotion came after one of Wolfowitz’s two deputies on Wednesday told him at a meeting of vice-presidents to resign.
The call by Graeme Wheeler, a bank veteran, showed the degree to which the matter has affected the institution, which lends about $25-billion a year to programmes that fight poverty.
As news of the resignation call leaked out on Wednesday, the bank’s staff association appealed to senior staff to throw their support behind Wheeler, a New Zealander widely respected within the institution. – Reuters