May 7, 2007 / 2:16 PM / 12 years ago

Wolfowitz aide quits World Bank amid controversy

WASHINGTON (Reuters) - A close aide to World Bank President Paul Wolfowitz resigned on Monday, saying turmoil at the bank over its current leadership has made it difficult for him to do his job.

World Bank President Paul Wolfowitz during a news conference at the European Union headquarters in Brussels, May 2, 2007. REUTERS/Francois Lenoir

The departure of Kevin Kellems was a blow in a critical week for Wolfowitz, a key architect of the Iraq war who is now under fire for his handling of a lucrative promotion and pay raise for his companion, Shaha Riza, a Middle East expert at the bank.

Kellems, who served as an advisor to Wolfowitz from 2002 when he was U.S. deputy defense secretary and before he became World Bank president in 2005, told Reuters he was leaving to pursue other opportunities.

Kellems worked briefly for U.S. Vice President Dick Cheney as spokesman before he rejoined Wolfowitz at the World Bank in 2005 because of previous experience in development issues.

“Given the current environment surrounding the leadership of the World Bank Group, it is very difficult to be effective in helping to advance the mission of the institution,” Kellems said.

“I have tremendous respect and admiration for the bank staff and management and treasure the many friendships,” he said.

Wolfowitz’s two years at the bank have been marred by criticism that he depended on a coterie of aides, including Kellems and Robin Cleveland, he brought from the Pentagon and White House. That added to tension between Wolfowitz and bank employees by isolating him from career staffers.

Meanwhile, a special bank panel appointed to look into whether Wolfowitz broke rules or abused his powers in the handling of Riza’s transfer to the State Department and pay raise had completed its findings and presented the report to Wolfowitz overnight, board and bank sources said on Monday.

The sources said the report would be submitted to the bank’s board of shareholder governments on Tuesday, with a follow-up meeting later in the week, where Wolfowitz’s future at the bank will be decided.

But other bank sources said Wolfowitz and his lawyer may request more time to respond to the panel’s report, which could delay the outcome on his future by another week.

Wolfowitz’s lawyer, Robert Bennett, was not available for comment.

According to the sources, there is “widespread feeling” on among board directors that it is virtually impossible for Wolfowitz to finish his term because of the damage to the bank’s credibility and its ability to be effective.

In Brussels, Dutch Finance Minister Wouter Bos stressed it was important that the bank’s reputation was not undermined.

“The bank can only do a good job if there is a good and sound reputation,” Bos told reporters. “I am concerned about this reputation at the moment.”

Board sources said the key to whether Wolfowitz stays or goes is if the United States, the bank’s biggest shareholder who nominated Wolfowitz for the job, pressures the board, especially European countries, to allow Wolfowitz to continue.

U.S. President George W. Bush made clear his support for Wolfowitz when he raised it during an April 30 meeting with German Chancellor Angela Merkel at the White House, bank and board sources who have details of the meeting told Reuters.

Wolfowitz has said he is the victim of a smear campaign designed to discredit his leadership and undermine his anti-corruption campaign.

The controversy also has raised questions about the bank’s traditional management procedures, especially the selection of its president and the transparency of the board.

Since the bank’s inception after World War Two, the United States has always nominated the president without objection while the head of its sister institution, the International Monetary Fund, has always been a European.

Additional reporting by William Schomberg in Brussels

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