World Bank President Paul Wolfowitz Vows to Stay in Job Despite Ethics Probe

WASHINGTON – Embattled World Bank President Paul Wolfowitz said Sunday he will stay on the job, carrying out the bank's mission to reduce poverty around the world.

"The bank has important work to do and I will continue to do it," he said at a news conference ending a meeting of the steering committee for the bank and the International Monetary Fund.

There have been calls for Wolfowitz to resign as the head of the 185-nation lending organization over his involvement in a huge pay increase awarded to a close female friend.

The steering committee said the issue was "of great concern to us all" and called on the bank's board to complete its work of looking into the matter.

"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 its staff," the committee said.

In answering questions about whether he should step down, Wolfowitz referred several times to the committee's communique and said he did not want any comments he made to get in the way of the board's work.

"I believe in the mission of this organization, I intend to carry it out, I have had many expressions of support," he said.

Critics have asked how he could continue leading the World Bank's fight against corruption since it emerged that he secured a $193,590 (euro143,060) job for his companion, Shaha Riza, at the U.S. State Department soon after he joined the World Bank in 2005.

In an e-mail to bank staff Saturday night, some of whom have called for his resignation, Wolfowitz said he had remained largely silent as the bank's board of directors considered his future.

"I feel, however, that this has left a vacuum, which has largely been filled by misleading information" and conceded the 109 pages of documents about the controversy released by the board are "a lot to wade through for significant facts so I would like to call your attention to a number of them."

He attached excerpts that referred to his offer, when he became president of the bank two years ago, to refrain from dealings with Riza, who then worked in the bank's Middle East department. But The Washington Post said he did not include his lawyer's subsequent clarification that the recusal offer did not include a ban on "professional contact." A posting on the bank's Web site Saturday included a link to the package of documents.

One of the architects of President George W. Bush's Iraq war strategy, Wolfowitz has been working behind the scenes at weekend meetings of finance ministers and central bankers to drum up support to stay in his post.

The White House has said Bush has confidence in Wolfowitz.

Treasury Secretary Henry Paulson said the United States welcomed and supported an updated version of the bank's anti-corruption strategy developed under Wolfowitz's leadership. Since taking over, Wolfowitz has made anti-corruption efforts a priority, prompting concern from some of the board's European members that he was overemphasizing the issue.

As Wolfowitz entered the meeting room, he received a pat on the back from Rodrigo de Rato, the head of the International Monetary Fund, the World Bank's sister institution.

The United States, Britain and France, whose governments have a major role in bank operations, said it was important to await the outcome of the board investigation into Wolfowitz's actions.

British development minister Hilary Benn said Saturday, however, that "this whole business has damaged the bank and should not have happened" and was drawing attention away from the bank's agenda.

"This weekend ought to be about the bank's contribution to fighting poverty, and I'm looking forward to discussing how we can increase aid, tackle climate change and get clean water to 1 billion human beings," said Benn.

Wolfowitz and Development Committee Chairman Agustin Carstens, Mexico's finance minister, talked about the need for wealthy governments to deliver on promises to increase spending on development aid.

"The donors are now unfortunately in a position of not fulfilling their promises," Wolfowitz said.

Large donor countries are meeting throughout this year to decide how much money they will give to the International Development Association, which gives interest-free loans and grants to poor countries.

Last week, Wolfowitz told reporters donors would need to give at least $28 billion (euro20.7 billion) if they are to fulfill promises to compensate IDA for income lost because of debt relief granted to poor countries.