Wolfowitz to resign from World Bank
WASHINGTON – Pressure was mounting in Europe. The staff was in revolt. And his biggest backer, the president of the United States, was giving up the fight.
In the end, Paul Wolfowitz had little choice but to tender his resignation as president of the World Bank.
After days of negotiations, he got what he wanted: an acknowledgement from the bank’s board that he did not bear sole responsibility for the conflict-of-interest furor surrounding his handling of the 2005 pay package for his girlfriend, Shaha Riza, a bank employee.
Wolfowitz and the bank announced Thursday that he will resign at the end of June. His departure ends a two-year run at the development bank that was marked by controversy from the start, given his previous role as a major architect of the Iraq war when he served as the No. 2 official at the Pentagon.
“He assured us that he acted ethically and in good faith in what he believed were the best interests of the institution and we accept that,” the board said in its announcement of Wolfowitz’s resignation.
The controversy, which gripped the bank for a month, was seen as a growing liability that threatened to tarnish the poverty-fighting institution’s reputation and hobble its ability to persuade countries around the world to contribute billions of dollars to provide financial assistance to poor nations.
The 185-nation World Bank, created in 1945 to rebuild Europe after World War II, provides more than $20 billion a year for projects such as building dams and roads, bolstering education and fighting disease.
By tradition, the World Bank has been run by an American. The Bush administration keenly wanted to keep that decades-old practice firmly intact as the board dealt with Wolfowitz’s fate.
The White House said it would have a new candidate to announce soon, allowing for an orderly transition.
In its statement, the bank’s board said it was clear that a number of people had erred in reviewing Riza’s pay package.
For his part, Wolfowitz said he was pleased that the board “accepted my assurance that I acted ethically and in good faith in what I believed were the best interests of the institution, including protecting the rights of a valued staff member.”
The board’s statement made no mention of any financial arrangements related to Wolfowitz’s departure, nor did it speak to Riza’s future.
European nations had led the charge for Wolfowitz to resign. Those calls were backed by many on the bank’s staff, former bank officials, aid groups and some Democratic politicians.
Until near the end, the Bush administration had professed support for Wolfowitz. But in a shift on Tuesday, the White House indicated for the first time it was open to his departure.