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World Bank to Decide on Wolfowitz
securing a generous pay rise for his companion.
A panel of bank executives said Wolfowitz violated ethics rules in his handling of the promotion and generous pay deal and his involvement represented a conflict of interest.
As the committee warned of a crisis of leadership at the international lender, President Bush rushed to support Wolfowitz, a former deputy defense secretary and an architect of the Iraq invasion.
A month of scandal surrounding Wolfowitz has divided the bank`s 185 member states, with the US standing by Wolfowitz and European governments and others pushing for his exit.
Wolfowitz was to appear before the 24 member executive board Tuesday when his fate will be decided.
In a letter to the board and to Wolfowitz, 37 country directors on the front line of the bank`s operations said that the leadership crisis had damaged the bank`s reputation and effectiveness in fighting poverty.
Documents released by the bank`s executive directors have exposed Wolfowitz`s hand in a pay package worth nearly $00,000 that was awarded to his companion Shaha Riza.
"These actions show that the relationship between Mr. Wolfowitz and Ms. Riza went beyond the appearance of a conflict of interest and constituted an actual conflict of interest situation."
The panel recommended the board "consider whether Mr. Wolfowitz will be able to provide the leadership needed to ensure that the bank continues to operate to the fullest extent possible in achieving its mandate".
The board however is unlikely to make a final decision before Wednesday and it was still unclear if they would be forced to vote on the issue or decide by consensus.
Bush continued to stand behind Wolfowitz.
"The president supports him (Wolfowitz), and that remains unchanged," said White House spokesman Tony Snow.
The Financial Times reported that the US was seeking an "emergency" conference call of Group of Seven ministers to persuade them to let Wolfowitz keep his job.
From the start Wolfowitz was a controversial choice by Bush to head the institution because of his neoconservative background and high-profile role as an architect of the Iraq war.
In another setback for Wolfowitz, the right-leaning Wall Street Journal, which until now gave him strong backing, suggested Friday he be named to another post in the Bush government.
In what the panel described as the "central theme" of the matter, Wolfowitz "saw himself as the outsider to whom the established rules and standards did not apply".
The controversy has threatened to hobble the bank`s lending and development programs, as well as an anti-corruption campaign targeting borrowers that was Wolfowitz`s signature initiative.
Speculation as to who might succeed Wolfowitz has already begun.
Media reports put Robert Zoellick, the former US trade representative, at the top of the list, followed by Egyptian Mohammed el-Erian, who manages Harvard University`s vast endowment and Kemal Davis of Turkey, head of the UN Development Program.
Traditionally, the US names the World Bank president and European governments name the head of the International Monetary Fund.