WASHINGTON - The World Bank's staff
association, which represents 10,000 employees, on
Thursday asked bank president Paul Wolfowitz to
step down amid charges that he gave his
girlfriend, a bank employee, improper pay
increases and attempted to cover it up.
The association made the call during an
informal press conference inside the bank at which
dozens of employees showed up. It is the first
time anyone inside the Washington-
headquartered institution has
demanded his ouster.
The gathering became
dramatic when Wolfowitz himself appeared uninvited
and sought to defend his actions.
"The
president must acknowledge that his conduct has
compromised the integrity and effectiveness of the
World Bank Group and has destroyed the staff's
trust in his leadership," said a statement from
the staff association signed by its chairwoman,
Alison Cave. "He must act honorably and resign."
The call came less than an hour after
Wolfowitz issued his own statement. "I made a
mistake, for which I am sorry," said the
64-year-old World Bank president.
The
Staff Association said it decided to call for his
resignation even though the bank's board, which
runs the institution's day-to-day affairs,
announced that it was prepared to investigate
officially
the allegations that Wolfowitz used his
position to enrich Shaha Riza, a bank employee
with whom he had a personal relationship, through
large pay hikes that violated bank protocols.
The association said it feared that the
board might not act quickly enough, and called for
the release of all relevant documents, including a
memorandum from Wolfowitz to the human-resources
vice president instructing him to second Riza to
the US State Department on a generous package that
brought her salary to US$193,000 a year - $7,000
more than that earned by Secretary of State
Condoleezza Rice.
Wolfowitz defended
himself on Thursday, saying that he had already
sought the advice of the ethics committee at the
bank and that he had acted "in good faith".
He also said he was trying to ward off a
possible legal problem for the bank. He did not
elaborate on whether Riza had threatened to sue
the bank if she was involuntarily assigned to the
State Department - a necessary move since bank
employees who are personally involved may not work
together.
"This was an involuntary
reassignment and I believed there was a legal risk
if this was not resolved by mutual agreement," he
said. "I take full responsibility for the
details."
But Wolfowitz' statement did not
allay concerns among staff that he might have
placed his girlfriend's interests before the
institution's.
The staff association says,
for example, that there was no representation by
the bank's legal counsel during negotiations of
the new contract for Riza, although her own lawyer
was present.
Wolfowitz has taken several
hits over the past week, the last of which came
from Ad Melkert, former chairman of the ethics
committee, who denied that the committee directed
or agreed to Riza's contract terms, as the bank
president alleged.
The staff association
also said that the former general counsel of the
Bank, Roberto Danino, rejected the terms for
Riza's reassignment, leading to his exclusion by
Wolfowitz from the actual contract negotiations.
The association said the affair is taking
a toll on morale inside the bank. "It therefore
seems impossible for the institution to move
forward with any sense of purpose under the
present leadership, especially in our endeavor to
assist governments and their people in improving
their own governance," it said.
The
controversy has been particularly embarrassing for
Wolfowitz and the bank because since he came to
office in 2005, he has sought to make an
anti-corruption crusade the signature of his
tenure.
Last year, he announced a
"long-term strategy" for using the bank's funds
and expertise to help developing countries rid
their governments of bribe-taking and other
dishonest practices.
But even as he
assumed responsibility for decisions related to
Riza, Wolfowitz went on the offensive, implying
that the staff's reaction may have been motivated
by displeasure with his role in the Pentagon as
one of the main architects of the US invasion and
later occupation of Iraq, now in its fifth year
and exacting huge human and financial costs.
"For those people who disagree with the
things that they associate me with in my previous
job, I'm not in my previous job," Wolfowitz said
in a statement. "I'm not working for the US
government; I'm working for this institution and
its 185 shareholders."
Wolfowitz came to
the World Bank in mid-2005 from his post as the US
deputy secretary of defense.
His
appointment to the World Bank sent ripples through
many at the institution and within development
circles who feared that his neo-conservative
credentials and close association with the carnage
caused by the Iraq war could undermine the bank's
image as one of the world's leading development
agencies.
But the controversy over Riza's
salary increases has mostly skirted his role in
the Iraq war - with Wolfowitz himself bringing it
up.
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the allegations that Wolfowitz used his
position to enrich Shaha Riza, a bank employee
with whom he had a personal relationship, through
large pay hikes that violated bank protocols.
