World Bank board says will decide soon on Wolfowitz

WASHINGTON (Reuters) - The World Bank’s board of directors adjourned a meeting on Friday over the promotion by bank President Paul Wolfowitz of his girlfriend, Shaha Riza, saying it would move quickly to decide how to proceed.

In a statement, the board said it found that Wolfowitz signed off on Riza’s promotion and salary increase without a review by an ethics committee nor the board’s chairman. The promotion came shortly after he joined the institution in 2005.

“The executive directors will move expeditiously to reach a conclusion on possible actions to take,” the board said.

“In their consideration of the matter the executive directors will focus on all relevant governance implications for the bank,” it added

The board released documents of findings of an ad hoc group that investigated the contract agreed with Riza and also included communications between Wolfowitz, the board and other bank officials.

The review on Friday by the board of member countries focused on whether Wolfowitz broke staff rules when he approved Riza’s promotion, before she was assigned to the State Department to resolve possible conflict of interest issues arising from his supervision over her work.

Wolfowitz has taken full responsibility for Riza’s promotion and apologized on Thursday, saying he made a mistake in the way he handled the issue, but said he was in “uncharted waters” and still new in his job.

“In hindsight, I wish I had trusted my original instincts and kept myself out of the negotiations. I made a mistake, for which I am sorry,” he said in an opening statement at a news conference.

The board said Wolfowitz had revealed his relationship with Riza while he was negotiating his own job contract and, at the directors’ request, sought guidance from the board’s ethics committee.

“The guidance given on an informal basis was that the employee should be relocated to a position beyond potential supervising influence,” the board said.

Wolfowitz, who was nominated for the bank job in 2005 by President George W. Bush, joined the institution from the Pentagon, where he was one of the architects of Iraq war.

He has faced lingering distrust by many staff members and resentment over his close ties to the Bush administration and his role in the Iraq war that have overshadowed his first two years at the bank.

The bank’s staff representative association, which demanded last week that Wolfowitz explain his actions, have called on Wolfowitz to resign, saying it seemed impossible for the institution, whose mission is to fight global poverty, to move forward “with any sense of purpose under the present leadership.”