http://www.iht.com/articles/2007/04/12/news/bank.php
World Bank chief admits 'mistake' By Brian Knowlton WASHINGTON: Paul Wolfowitz, the World Bank president, made his most candid admission of error Thursday for having helped to steer a close female friend and Bank associate into a particularly well-remunerated job, but he faced open revolt from many of his subordinates and his future at the Bank was less than clear. "I made a mistake, for which I am sorry," Wolfowitz said in a statement read during a news conference, which , came awkwardly, as hundreds of finance and economics ministers from around the world were gathering for the annual spring meetings this weekend of the World Bank and the International Monetary Fund. The staff's anger over Wolfowitz's apparent preferential treatment for the friend, Shaha Riza - who was seconded to the State Department in 2005, shortly after Wolfowitz became bank president, and has since received substantial raises - had been bubbling for weeks. The executive board of the World Bank was meeting late Thursday, and there appeared to be a real possibility that Wolfowitz might have to resign. He had met with its members informally early in the day. But no member of the board had publicly withdrawn support from Wolfowitz, whose term normally would run to 2010. Much of the staff anger had to do with the high level of compensation paid to Riza, whom Wolfowitz has dated. It has been estimated at $193,000, which would exceed that of Secretary of State Condoleezza Rice by about $10,000. Wolfowitz said Thursday that he had made the decision regarding Riza soon after joining the bank, while he was still in "uncharted waters." In a statement posted on the World Bank's Web site, Wolfowitz said he had confessed his "potential conflict of interest" to the board when he arrived. He said he took the issue to its Ethics Committee and ultimately took that panel's advice, "to promote and relocate Ms. Shaha Riza." Still, he said, "in hindsight, I wish I had trusted my original instincts and kept myself out of the negotiations" over her salary. "I proposed to the board that they establish some mechanism to judge whether the agreement reached was a reasonable outcome," he said. "I will accept any remedies they propose." Asked by reporters whether he was prepared to resign, he said only: "I take full responsibility for the details. I did not attempt to hide my actions nor make anyone else responsible." Some critics consider the matter particularly nettlesome because Wolfowitz, whether he technically violated bank rules or not, has made the fight against corruption a central goal of his presidency. Whatever action the board takes, it appeared that the flap might revive longtime calls by Europeans to rethink the understanding by which the United States traditionally has nominated the World Bank's presidents while Europeans pick the leader of its sister organization, the IMF. Wolfowitz's tenure at the 185-nation World Bank has been controversial from the beginning. A former deputy defense secretary, he left the Bush administration under what, for many at the World Bank, was the cloud of having been a key advocate of war with Iraq. And he brought with him a cadre of advisers who rubbed some at the global institution the wrong way. In addition, many at the bank - which provides low- or no-interest loans to developing countries - have been critical of Wolfowitz's emphasis on steering assistance away from countries deemed particularly corrupt. That, the critics say, means that some of the world's poorest people are being punished for the actions of their rulers. Riza is making an estimated $193,590 - about $60,000 more than when she left the Bank in 2005 - according to a watchdog group, the Government Accountability Project. That is a high figure even by the relatively generous standard of World Bank salaries (the Bank does not disclose salaries). Before her secondment, she was a communications adviser in the Middle East section. Earlier this week, Wolfowitz sought to turn attention away from the Riza matter - noting that a committee had been named to investigate it - and toward issues like poverty, corruption and environmental problems. But criticism from the bank's staff has flared sharply, even as world finance officials converge on Washington. Riza, meantime, has not commented publicly on the matter. Whether or not Wolfowitz survives his current troubles, the World Bank clearly has been rattled. "The bank under President Wolfowitz is confronting some major issues of focus, process and morale," said Edwin Truman, who was an assistant treasury secretary for international affairs in the second term of President Bill Clinton, and is now with the Peter Peterson Institute for International Economics. "It is good that Wolfowitz has admitted he made a mistake. Let's hope that this allows the bank and its shareholders to address the big issues." But he said he did not believe, based on the latest information, that Wolfowitz's job was in jeopardy. [Non-text portions of this message have been removed]
