Wolfowitz to resign as World Bank chief
WASHINGTON: World Bank President Paul Wolfowitz bowed to weeks
of pressure Thursday and agreed to step down June 30 to end a
favouritism scandal that had rocked the poverty-fighting institution.
Wolfowitz, 63, said he was resigning in the “best interests” of the
bank, thus ending a scandal over a generous pay and promotions package
for his girlfriend.
“I have concluded that it is in the best interests of those whom this
institution serves for that mission to be carried forward under new
leadership,” Wolfowitz said in a statement after three days of
deliberations by the World Bank board.
Wolfowitz violated bank rules in arranging a generous promotion and
pay package for the girlfriend shortly after he assumed the bank
presidency in June 2005, according to an internal World Bank report made
The report also said the bank gave Wolfowitz vague instructions on
how to resolve the possible conflict of interest over Riza.
Wolfowitz said in his statement that he “acted ethically and in good
faith” in what he believed “were the best interests of the institution,
including protecting the rights of a valued staff member.”
The bank’s 24 executive directors also issued a statement that seemed
tailored to meet Wolfowitz’s reported demand that the bank recognize
their flawed advice in the Riza affair.
The announcements drew a delicate face-saving balance, acknowledging
that wrongs were done on both sides but that all parties had acted in
The directors pointed to successes under Wolfowitz’s two-year tenure,
such as debt relief, clean energy investment and avian flu projects.
“It is regrettable that these achievements have been overshadowed by
recent events,” they said. The resignation deal leaves Wolfowitz in
office, but with greatly reduced powers, according to a source close to
the negotiations, who said the outgoing president agreed to not make any
major decisions on policy or personnel matters.