Cheney: Wolfowitz should remain chief at World Bank as board mulls a decision

By: JEANNINE AVERSA - Associated Press | Monday, May 14, 2007 8:03 PM PDT ∞

WASHINGTON -- Paul Wolfowitz should remain chief of the World Bank, Vice President Dick Cheney said Monday as the poverty-fighting institution moved closer to deciding Wolfowitz's fate.

The bank's 24-member board could very well make a decision this week. European members are leading the charge for Wolfowitz to resign.

Asked whether Wolfowitz should stay in his job, Cheney, in an interview with Fox News in Aqaba, Jordan, replied "I do."

The vice president went on to praise Wolfowitz, who was the No. 2 official at the Pentagon and an architect of the U.S.-led Iraq war, before he took the bank's helm in June 2005.

"I think Paul is one of the most able public servants I've ever known, and I've worked with him a lot over the years," Cheney said. "I think he's a very good president of the World Bank, and I hope he will be able to continue."

A special bank panel has accused Wolfowitz of circumventing conflict-of-interest rules when he arranged for a 2005 hefty compensation pay package for his girlfriend, Shaha Riza, a bank employee.

Wolfowitz, who submitted his response to the allegations late Friday, is scheduled to make an appearance before the board Tuesday. The proceedings are not public.

Board members have discussed a range of disciplinary options. It could fire Wolfowitz, ask him to resign, signal that it lacks confidence in his leadership or reprimand him. Board members have been leaning toward an expression of no confidence or other tough language that would make it difficult -- if not impossible -- for Wolfowitz to stay on.

European and other countries, however, would still like to avoid a pitched battle with the United States, the bank's largest shareholder. It's unclear, though, whether such a battle can be avoided.

By tradition, the World has been run by an American, while the International Monetary Fund has been run by a European. President Bush tapped Wolfowitz, a move that was approved by the bank's board. The United States keenly wants to preserve that decades-old tradition.

Wolfowitz has maintained that he acted in good faith in arranging Riza's pay package and has accused his critics of launching a "smear campaign" against him.

The bank's executive directors, however, have said the terms and conditions of the package had not been "commented on, reviewed or approved" by the bank's ethics committee, its chairman or the bank's board.

Riza worked for the bank before Wolfowitz took over as president. She was moved to the State Department to avoid a conflict of interest but stayed on the bank's payroll. Her salary went from close to $133,000 to $180,000. With subsequent raises, it eventually rose to $193,590.

Critics -- including many on the bank's staff, aid groups and Democratic politicians -- want Wolfowitz to resign. They contend the controversy has tarnished the bank's reputation and could hobble its ability to raise billions of dollars from countries around the world to help poor nations.

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