World Bank to let Wolfowitz defend himself (Roundup)

By Tony Czuczka Apr 26, 2007, 23:43 GMT

Washington - The World Bank's board has agreed to let embattled president Paul Wolfowitz defend himself in a probe into a pay raise he arranged for his girlfriend and other issues, his lawyer said Thursday.

Wolfowitz was scheduled to testify Monday to an investigating committee set up by the board last week, attorney Robert Bennett said in a telephone interview.

The former US deputy defence secretary has rejected calls to quit and pressed the board to give him a hearing. In a letter this week to the panel's head, he complained he was being treated 'shabbily' and demanded 'fairness.'

At issue is a hefty pay rise that Wolfowitz directed for his companion Shaha Riza, who worked as a communications adviser at the 185-nation development lender when he took over in 2005.

Critics, including several European governments, are refusing to support Wolfowitz, saying the episode undermines the credibility of a global anti-corruption drive he has championed.

The European Parliament, which groups representatives of all 27 European Union nations, urged Wolfowitz on Wednesday to resign.

The World Bank's probe is also looking into allegations that aides appointed by Wolfowitz influenced bank policies on birth control and climate change to reflect US government stands.

In an e-mail to World Bank staff leaked to a watchdog group, he has pledged 'major changes' in his leadership style and made plain he expects to continue in his job.

He also hired Bennett, a prominent Washington criminal lawyer who helped former president Bill Clinton fight sexual harassment claims.

Wolfowitz, 63, has been a polarizing leader from the start because he came to the bank after helping plan the US-led invasion of Iraq.

US President George W Bush nominated Wolfowitz and has backed him during the current crisis. The United States is the biggest contributor to the bank, which lends more than 20 billion dollars a year to fight poverty and disease in developing nations.

The bank's board last week expressed 'great concern' about the Wolfowitz scandal and pledged a quick decision on his future.

Wolfowitz in 2005 ordered a 60,000-dollar pay rise for Riza, raising her salary to 193,590 dollars. It was part of a deal that saw Riza loaned out to the US State Department to avoid a potential conflict of interest.

The bank's staff association says the rise was twice as large as staff rules allow and has demanded Wolfowitz resign.