Image: Paul Wolfowitz
Gerard Cerles  /  AFP - Getty Images
"It is grossly unfair and wrong to suggest that I intended to mislead anyone," World Bank President Paul Wolfowitz claimed on Thursday.
updated 5/3/2007 3:17:13 PM ET 2007-05-03T19:17:13

Fighting to keep his job, World Bank President Paul Wolfowitz issued a rebuttal Thursday that blamed unclear bank rules for creating questions about his handling of hefty pay raises for his girlfriend.

The rebuttal comes as a special bank panel is putting together a report on whether Wolfowitz acted properly in the arranging the 2005 promotion and compensation package for bank employee Shaha Riza. The panel’s findings and recommendation will go to the bank’s 24-member board, which ultimately will decide Wolfowitz’ fate.

The bank’s former top ethics official, Ad Melkert, told the panel this week that the bank’s ethics committee was not consulted and did not approve of Riza’s compensation package. The bank’s former general counsel, Roberto Danino, said he believed Wolfowitz acted “incorrectly.”

“Rather than attempt to adjudicate between our conflicting interpretations of the events that occurred here, the board should recognize that this situation is the product of ambiguous bank rules and unclear governance mechanisms,” Wolfowitz wrote Thursday to the special panel’s chief, Herman Wijffels.

Wolfowitz has maintained that he acted in good faith and did not attempt to hide information about the package to bank officials. He has 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 head and Riza, who had her own counsel.

The bank’s ethics officials, he said, had access to all of the details of the package if they wanted it.

“While I am prepared to acknowledge that we all acted in good faith at the time and there was perhaps some confusion and miscommunication among us, it is grossly unfair and wrong to suggest that I intended to mislead anyone, and I urge the committee to reject the allegation that I lack credibility,” Wolfowitz said Thursday.

The controversy over the promotion and pay package has spurred calls for Wolfowitz’s resignation.

Riza had worked for the poverty-fighting institution 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 salary went from close to $133,000 to $180,000. With subsequent raises, it eventually rose to $193,590.

Among the things the special panel is looking at is whether Wolfowitz violated bank rules, including conflict-of-interest rules, in getting involved in Riza’s promotion and compensation package. At various points in the process, there have been reports that the panel would cite Wolfowitz for ethical breaches.

The board could meet Friday, although it is unclear whether a decision would emerge from that session.

The bank’s directors will decide what action should be taken, if any. A range of disciplinary options has been discussed. The board could ask Wolfowitz to resign, signal that it lacks confidence in his leadership, reprimand him or take no action. There might also be a compromise under which Wolfowitz would avoid a harsh reprimand or would be found to have acted in good faith and he would resign.

Riza has said she did not want to be assigned duties outside the bank and has said her pay was within the same range as employees at the same grade level.

The United States 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 others have called on him to resign.

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

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