World Bank sets deadlines in Wolfowitz probe

May 10, 2007, 9:11 GMT

Washington - The World Bank's embattled President Paul Wolfowitz has been given until Friday to respond to an internal ethics investigation against him, the development agency's board of directors said in a statement issued overnight Wednesday.

Wolfowitz, a co-architect of the Iraq war who has made many foes among bank staff and managers, is fighting for his job after a board committee reportedly found he broke ethics rules by arranging a pay raise for a girlfriend who worked at the World Bank.

The panel and the former US deputy defence secretary have wrestled all week over how much time he should get to prepare his rebuttal to the panel's draft report delivered Sunday.

Wolfowitz originally was given 48 hours to respond, but the committee extended the deadline after he asked twice for more time, said a board statement late Wednesday.

   A seven-member committee appointed to investigate Wolfowitz's leadership at the bank has reportedly concluded that he violated ethics rules with the deal and has given him until Friday to submit any comments.

Wolfowitz will get a final chance to present his case to the 24 board members Tuesday. 'They will then consider all the information available and reach their decision,' the statement said.

The panel's report to the board 'will permit an effective and orderly resolution of the matter, following fair process and careful deliberation,' it said.

At issue is a hefty pay raise and promotion for Wolfowitz's girlfriend Shaha Riza, three months after Wolfowitz became the development bank's head in June 2005. She was loaned out to the US State Department to avoid a potential conflict of interest, but kept on the World Bank payroll.

Wolfowitz, 63, denies wrongdoing and says he was broadly following suggestions by the bank's ethics committee. The ethics panel's ex-head, former Dutch Labour Party politician Ad Melkert, has disputed Wolfowitz's account in a statement to the World Bank investigators.

Germany, France, the Netherlands and Norway have been among Wolfowitz's sharpest critics, calling for quick resolution of a scandal that has gripped the 185-nation bank for a month.

Foes say the ethics issues have undermined the credibility of a global anti-corruption drive that Wolfowitz has made a hallmark of his tenure.

US President George W Bush, who nominated Wolfowitz for the post, has continued to back him. But Treasury Secretary Henry Paulson, the main US representative to the bank, has tended to be more cautious in his support.