updated 5/2/2007 3:59:49 PM ET 2007-05-02T19:59:49

World Bank President Paul Wolfowitz said Wednesday that attention should be “focused on the very, very important work of the bank” and not on the investigation that has put his job in jeopardy.

His comments to a European Union-hosted meeting in Brussels, Belgium, came after the bank’s board expressed fresh concern that the controversy over Wolfowitz’s handling of pay for his girlfriend, Shaha Riza, is hurting the poverty-fighting institution’s ability to do its job.

The flap has led to calls for Wolfowitz’s resignation and has hurt morale among the bank’s 10,000 employees worldwide. Critics contend the bank’s reputation has been damaged and its efforts to raise billions of dollars to help poor countries may be hobbled.

“The bank’s work goes on,” Wolfowitz said. “It is critical, there are millions of poor people who depend on us.”

The 24-member board, after meeting several hours with a special panel probing Wolfowitz’s handling of the 2005 promotion and pay package of bank employee Riza, issued a statement late Tuesday saying it is “very concerned about the impact on the work” of the poverty-fighting institution.

For the last two days, the special panel has heard from Wolfowitz, Riza and other present and former bank officials about Riza’s promotion and pay raises that lifted her compensation from about $133,000 to $193,590.

The board said the next step is for that panel to “draw its conclusions from the information obtained from the documents and during the course of the interviews” and submit a report to the directors expeditiously.

Ultimately, the directors will decide what action should be taken, if any. The board could ask Wolfowitz to resign, signal it lacks confidence in his leadership, reprimand him, or take no action. There might also be a compromise under which Wolfowitz would be found to have acted in good faith and he would resign later.

The board promised to make a decision soon.

Wolfowitz dodged questions about his fate, saying, “The board is considering this issue.”

Riza had worked at the bank for eight years when Wolfowitz arrived in 2005. She was moved to the State Department to avoid a conflict of interest but stayed on the bank’s payroll. Her pay increases spurred allegations among staff that Wolfowitz showed favoritism to her.

Wolfowitz has maintained he acted in good faith in helping to secure the compensation package. He said the package’s details were not dictated by him but rather “flowed from the back-and-forth negotiating process” between the bank’s human resources chief and Riza, who had her own counsel in the matter.

He said he had received guidance from the bank’s ethics officials and that they had access to all of the details of the package “if they wanted it.”

The bank’s former top ethics official, Ad Melkert, however, disputed that, saying the bank’s ethics committee wasn’t consulted and didn’t approve Riza’s compensation package. The bank’s former general counsel, Robert Danino, also said he believed Wolfowitz acted “incorrectly” in helping arrange Riza’s compensation package.

Wolfowitz’s attorney, Robert Bennett, in a letter Wednesday to the special panel’s chief, Herman H.F. Wijffels, said Wolfowitz will submit a “detailed response” on Thursday to Melkert and Danino.

“We would also appreciate it if the group (the special panel) would review this response before making any decisions,” Bennett wrote.

Riza, meanwhile, has said she didn’t want to move in the first place and defended her pay as being within the same range as employees at the same grade level.

The U.S. is the bank’s largest shareholder, and President Bush has said Wolfowitz should remain on the job. The European Parliament, many of the bank’s staff, former bank officials and some Democratic politicians have called on him to resign.

South Korea, which holds one of the seats on the bank board, declined to weigh in publicly on the case.

“Our government believes that it is desirable to commission the board of directors to handle it appropriately, rather than expressing a specific position externally, because this issue is related to internal management of the World Bank,” South Korea’s finance and economy ministry told The Associated Press.

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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