WASHINGTON (Reuters) - The United States on Tuesday failed to rally support among key allies for a strategy aimed at saving Paul Wolfowitz’s job as World Bank president, which has been jeopardized by a pay and promotion controversy involving his companion.
The U.S. administration found support only from Japan in a conference call of officials from Group of Seven industrial countries for a plan to separate consideration of Wolfowitz’s ethics violations in the deal for his companion from whether he could continue credibly as head of the bank.
“The United States wanted to test the waters,” a European board official told Reuters. “Japan was aligned with the United States, but others, including Canada, were against,” the source added.
A G7 source said it was clear that most participants in the call wanted a quick resolution to what has been a protracted and messy battle over whether Wolfowitz should stay on, step down or be fired over the high-paying promotion for his companion, Shaha Riza, a long-time bank Middle East expert.
The G7 countries, which also include France, Britain, Germany and Italy, are the bank’s biggest funders and dominate its decision making.
Wolfowitz, whose neoconservative background and high-profile role in planning the Iraq war made him unpopular with many bank member countries, especially Europeans who opposed the war, will make a last-ditch effort to hold on to his job when he appears before the bank’s 24-nation board later on Tuesday.
A World Bank panel on Monday found that Wolfowitz had broken bank rules on conflict of interest by seeking a different resolution to Riza’s job status than would have applied to other staff and had “cast himself in opposition to the established rules of the institution.”
A final decision by the board is not likely before Wednesday in a saga that has paralyzed the institution and sparked turmoil among the bank’s staff, which has voiced concern over its effectiveness in fighting poverty.
Early on Tuesday, the Bush administration first repeated its firm backing for Wolfowitz, acknowledging he had made mistakes but saying he should not be fired for them. Later, it opened the door to Wolfowitz’s potential departure.
“This has been a bruising process; you’ve got to figure out how you maintain the integrity of the institution and how you handle its stewardship going forward,” White House spokesman Tony Snow told reporters.
It was the first time that the White House, which steadfastly supported Wolfowitz for weeks, even hinted at the possibility the World Bank’s credibility might outweigh his continued tenure.
European critics have maintained since early April, when the crisis first exploded into the open, that the bank’s credibility and effectiveness was at risk.
Board officials said it was too early to predict an outcome because countries could be swayed by continuing U.S. diplomatic efforts to keep Wolfowitz at his post.
German Development Minister Heidemarie Wieczorek-Zeul, who in April told Wolfowitz to quit, urged a quick resolution.
“All of us development ministers want the integrity and the credibility of the bank to be maintained and reinstated,” she told a news conference in Brussels.
Senior European board officials told Reuters Wolfowitz still had a chance of rescuing his job in his discussion with the board on Tuesday, depending on whether he could present a clear plan for rebuilding his credibility.
“I will only be convinced that he should stay on if he presents us with a genuine plan that he has the ability to raise funds for the bank, rebuild his relationship with staff and ensure the bank is effective,” the official said.
Wolfowitz has called the panel’s findings “unbalanced and flawed” and argued that it omitted statements and documents that support his position.
He has acknowledged there was perhaps some confusion and miscommunication between him and a bank ethics committee which advised him to transfer Riza to a job outside the World Bank to avoid conflict of interest issues.
The panel found that Wolfowitz believed the blame lay with others and failed to take responsibility for his actions.
Additional reporting Caren Bohan, Steve Holland, Glenn Somerville in Washington, Arshad Mohammed in Moscow and Ingrid Melander in Brussels