Embattled World Bank president Paul Wolfowitz seemed more isolated than ever yesterday as directors debated his fate amid rumblings of a civil war among senior staff.
After reviewing the organization's latest development projects, the 24 executive directors began meeting on the pay and favouritism scandal that has engulfed the former Pentagon deputy chief.
The meeting came a day after Mr. Wolfowitz attended a stormy session of senior staffers during which one of his two top deputies, managing director Graeme Wheeler of New Zealand, told him to quit.
"The characterization from people involved in the meeting was 'I can't believe you're asking our opinion,' " one bank insider said after Mr. Wolfowitz offered to make some management changes in a bid to rebuild his support. "It's not about management style. It's not about interaction with staff," the source said on condition of anonymity. "There was an exasperation that was conveyed to Mr. Wolfowitz: what part of 'resign' don't you understand?"
Reports said senior managers from Latin America and Asia had sided with Mr. Wheeler, but that Mr. Wolfowitz was backed by officials he appointed to head the bank's Middle East and Africa divisions.
Battle lines are drawn between the bank's staff association and European governments, which have long been suspicious of Mr. Wolfowitz, and a camp of supporters that includes the United States, Japan and some African countries.
The White House yesterday reiterated its "confidence" in Mr. Wolfowitz. Spokeswoman Dana Perino said: "What the President [George W. Bush]has said is that Paul Wolfowitz apologized, and to let the board do its work."
Mr. Wolfowitz has vowed to fight on.
The board was meeting for the first time since last week revealing that Mr. Wolfowitz in 2005 personally ordered a hefty pay package worth nearly $200,000 (U.S.) and guaranteed promotions for his girlfriend at the bank, Shaha Riza. On releasing documents indicating Mr. Wolfowitz's intimate involvement in the generous pay deal, the directors said last Friday they would "move expeditiously" to decide on possible actions to take.
After Mr. Wolfowitz took over the World Bank in June, 2005, Libyan-born Ms. Riza was sent on assignment to the U.S. State Department to prevent conflicts of interest. But she remained on the bank's payroll. It has also emerged that while Mr. Wolfowitz was still at the Pentagon, Ms. Riza visited Baghdad as a consultant for U.S. military contractor Science Applications International Corp. in 2003, just after the U.S.-led invasion of Iraq.
That's fuelled the anger of World Bank staff, who've long been fuming at Mr. Wolfowitz's attempts to revive a bank presence in Iraq.
The United States is by far the bank's biggest shareholder, and has its own seat on the board, along with Japan, Germany, Britain and France. The 19 other directors represent the rest of the bank's 185 member states.
Manish Bapna, executive director of the Bank Information Center, an independent group tracking World Bank affairs, said new staff appointed by Mr. Wolfowitz aren't as public in their criticism as those who have worked at the bank for quite some time. But he added: "At some point, the balance will shift from the nitty-gritty of what violations may have occurred, to more fundamental questions of whether Mr. Wolfowitz possesses the credibility and trust required to lead the world's most influential development organization."
Wolfowitz under fire
The banker
Paul Wolfowitz, the 63-year-old former U.S. Deputy Secretary of Defense, was appointed by U.S. President George W. Bush in 2005 to head the World Bank. He is paid $400,000 a year and is a citizen of Israel and the U.S.
The controversy
Mr. Wolfowitz, who came to the bank promising to tackle corruption, personally dictated the terms of a pay increase and promotion for Shaha Riza, his companion. He has apologized but refused to step down.
The girlfriend
Shaha Riza, 52, was born in Libya and educated at Oxford. She is a British citizen who speaks five languages and moved to the U.S. in the 1980s. She left her post as World Bank communications officer in 2005 after Wolfowitz took the helm.
The memo
"I now direct you to agree to a proposal which includes the following terms and conditions..."
Mr. Wolfowitz's memo to human resources ordered Ms. Riza be paid $193,590 (U.S.), a $61,000 raise.