COMBATIVE WOLFOWITZ SLAMS "CIRCUS-LIKE" PROCESS

by Emad Mekay

(IPS) WASHINGTON -- Embattled World Bank President Paul Wolfowitz, who is fighting for his job, warned Monday against a forced exit and called the Bank directors' description of his actions in a scandal besetting him and his girlfriend and co-worker "unjust and" and "hypocritical."

In a seven-page statement, Wolfowitz appeared in his most combative mode since the emergence six weeks ago of revelations that his girlfriend, Shaha Riza, had received unusually high pay and promotions, which appear to violate Bank protocols.

The controversy prompted charges of nepotism and worldwide calls for his ouster, including by the Bank's own Staff Association.

But on Monday, the 63-year-old World Bank president, who two weeks ago was making a humiliating apology for "a mistake," was pointing fingers and warning of damage to the Bank's reputation if he is forced out.

"I will not resign in the face of a plainly bogus charge of conflict of interest," he told an ad hoc committee looking into his actions.

Wolfowitz's offensive came Monday just as he received a major boost from Bush, who said he wants to see his former deputy defense secretary and the notorious architect of the ill-fated Iraq war remain at the helm of the Bank.

"My thought is that he ought to stay; he ought to be given a fair hearing," Bush said in a press conference in the White House Rose Garden. "He's helped the World Bank recognize that the eradication of world poverty is an important priority for the Bank."

Earlier in the day, Wolfowitz, flanked by his lawyer Robert Bennet, read a statement before the ad hoc committee looking into his case where he rebuked the board and spoke of a "rush to judgment" and "orchestrated leaks of false, misleading incomplete and personal information."

He spoke of a "conscious campaign" and a "smear campaign" to undermine his effectiveness in the Bank that professes fighting global poverty.

Wolfowitz warned of negative consequences to the World Bank if he was "to be forced out in this manner."

"It will send a terrible message to anyone who might even think about taking the job in the future. It will send a terrible message that the Bank does not care about reform," he said.

In his statement, seen by IPS, Wolfowitz defiantly tried to shift the blame to the Bank's Ethics Committee and insisted that it had approved the deal with Riza, which included two large salary increases for a total of 193,590 dollars per year in her posting at the U.S. State Department.

Wolfowitz, who said he was working in "good faith," charged the Ethics Committee knew about the details of the controversial arrangement with Riza.

"For the directors now to declare my actions to be improper and to criticize me would be unjust and frankly hypocritical. Such a change of course would not survive public scrutiny," he said.

Wolfowitz also came down heavy on Ad Melkert, the former chairman of the Ethics Committee, who is now associate administrator of the United Nations Development Program.

He said the details of the salary package for Riza were shared with Melkert, a former Dutch politician.

"At the time, the Ethics Committee surely knew that Ms. Riza received a promotion, which necessarily entailed a salary increase... I do not know whether the Ethics Committee was aware of the other details of the compensation arrangement at the time, but certainly they had access to that information if they wanted it," Wolfowitz said.

The beleaguered World Bank President also claimed that the 24-member Board, which runs the day to day affairs of the Bank, and the Ethics Committee had another chance to review the deal when in January 2006 they received an anonymous email alleging that Riza's promotion and salary increases were improper and that Wolfowitz had violated Bank rules.

Wolfowitz charged that the Board did not find new information in the email and took no action.

Wolfowitz also alluded to lapses by the Board. He cited the example of how former Managing Director Shengman Zhang, who was among dozens of former top World Bank officials calling for Wolfowitz's resignation, was allowed to have his wife work under him in the Bank without being required to relocate.

Wolfowitz denied that he tried to hide the details of Riza's compensation from the Ethics Committee but admitted that he told the Bank's human resources chief, Xavier Coll, that "he was to keep this sensitive matter confidential." He justified the request by saying that "all personnel information is confidential under Bank rules."

"Let me say that I regret the tumult this has caused the Bank," he said, but warned again that criticizing him, as the committee appears prepared to do, "would be unwarranted and grossly unfair. Moreover, it would be harmful to the institution."

Wolfowitz claimed that he was making progress raising funds for the Bank's soft-loans arm, the International Development Association (IDA). Bank officials seek replenishment for the IDA every three years. Now is the 15th round for raising such funds. European countries have suggested that they may withhold or cut down on their contributions if Wolfowitz stays on.

"If I am forced out in a circus-like process, it will only give those who are already looking for a reason not to contribute to IDA 15 the excuse they are seeking," he said.