Wolfowitz refuses to step down

World Bank chief says he intends to continue despite “great concern” of member states.

Wolfowitz: "This is important work and I intend to continue it" [EPA]
In a news conference shortly after the committee’s statement was released, Wolfowitz said: “This is important work and I intend to continue it.”
Reputation concern

Senior European officials were among those who expressed worry in closed-door sessions on Sunday that Wolfowitz had tarnished the bank’s reputation by helping to secure a high-paying promotion for Shaha Riza, his girlfriend and a World bank employee.


At the start of speeches to the development committee, ministers from Britain and Germany said the bank’s reputation had been dented, sources said. 

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Other sources monitoring the meeting said several other European countries also briefly addressed the issue, although they did not call outright for Wolfowitz to step down.


Staff and development activists accuse Wolfowitz of breaking bank rules in helping to arrange Riza’s promotion before she was assigned to outside work at the US Department of State.


They argue the institution’s moral authority has been left in tatters, especially its authority to make countries who receive aid accountable for the money.


The controversy has become a deep embarrassment for Wolfowitz, who has ruffled feathers at the bank by campaigning against corruption.


US backing


The former deputy US secretary of defence has apologised for his handling of Riza’s promotion and has said he was advised by a World Bank ethics panel to assign her to a job outside the bank to avoid a conflict of interest.


George Bush, the US president, has stood behind Wolfowitz, and African ministers have expressed confidence in him. Many member countries have cautioned against judging him until an examination by the bank’s board wraps up.


But large shareholders such as Britain, Germany and France question whether he still has the credibility to lead the bank, which spends about $25bn a year on projects to fight poverty in developing countries.


The board has said it will move quickly, but the scandal has already stirred up lingering antagonism over Wolfowitz’s appointment to the bank in mid-2005 by the Bush administration and bitterness over his role in the US invasion of Iraq.


Withholding funds


In notes of a speech prepared for delivery to the development committee on Sunday, Wolfowitz appealed to rich nations to deliver on aid promises and to keep the bank’s own coffers stocked so it can keep lending to needy countries.


Wolfowitz, outlining priority areas for the bank, said: “We stand half way to the 2010 goal post for doubling aid to Africa compared with 2004.”


But some insiders worry donors may withhold funding to the bank’s International Development Association if the scandal continues.

Source: News Agencies