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 Business News | May 2007 
Wolfowitz Resigns From World Bank
 Peter S. Goodman - Washington Post
| | World Bank President Paul Wolfowitz leaves his house in the Washington suburb of Chevy Chase, Maryland, May 17, 2007. (Yuri Gripas/Reuters) |
World Bank President Paul D. Wolfowitz resigned this afternoon, effective June 30, giving in to overwhelming pressure from bank staff and governments around the globe that he depart to end the ethics controversy that has consumed the institution.
Wolfowitz agreed to resign in negotiations with the bank's executive board, pre-empting a growing likelihood that he would have been formally reprimanded or fired, said bank officials who spoke on condition they not be named, citing the political sensitivity of the proceedings.
His resignation came as key members of the bank's 24-member executive board were mobilizing to push through a resolution expressing no-confidence in his leadership, a step that would have made it effectively impossible for him to continue, senior bank and Bush administration officials said.
The bank's board was moving toward that unprecedented step after a committee report that found that Wolfowitz broke ethics rules and undermined the reputation of the institution when he directed staff to award a substantial raise to his girlfriend and then covered up the details.
But in agreeing to leave, Wolfowitz extracted a significant measure of exoneration - his key demand in the negotiations. Sources said the board will soon issue a statement ascribing to the bank some of the blame for the ethics controversy while acknowledging that Wolfowitz believes he acted ethically.
"He assured us that he acted ethically and in good faith in what he believed were the best interests of the institution," the statement will read, according to a person familiar with the draft wording. "We accept that."
That statement appears to hand Wolfowitz and his attorney, Robert S. Bennett, considerable vindication: They have repeatedly argued that he tried to protect the bank in resolving a conflict of interest by transfering his longtime companion, Shaha Riza, to another job while increasing her pay as compensation for the disruption to her career.
In recent weeks, as the investigating committee heard testimony from bank officials, as staff openly campaigned for his ouster, and as political leaders from Berlin to Johannesburg called for his exit, Wolfowitz resolutely insisted he would stay. He dismissed the movement against him as a "smear campaign."
But by Wednesday morning, it had become clear that Wolfowitz was fighting an unwinnable battle. European governments, who have been leading the effort to oust him, preferred to avoid a vote to fire him, which would have risked an open conflict with the Bush administration. But the German and British representatives on the board had obtained the backing of their governments to take action to remove him, officials said.
At the same time, President Bush - who appointed him to the bank two years ago, and who had been a resolute supporter - was sending increasingly clear signals it was time for Wolfowitz to move on.
"I regret that it's come to this," Bush said today, in a morning news conference with outgoing British Prime Minister Tony Blair. "I believe all parties in this matter have acted in good faith." |
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