World Bank Reveals Details of Wolfowitz Role in Job Scandal

Pressure was mounting on Paul Wolfowitz, the embattled president of the World Bank, yesterday after the board of the Washington-based organisation published details of how he took personal charge of arrangements to move his girlfriend to a highly paid job at the US state department.

Amid signs that World Bank staff are in open rebellion against the former Pentagon hawk, there was speculation that the release of papers relating to the relocation of Shaha Riza was designed to force Mr Wolfowitz to resign.

Sources in Washington said Mr Wolfowitz's fate now hinged on whether he could retain the support of the White House. The president, George Bush, this week publicly backed the man he controversially chose to run the bank two years ago, but Mr Wolfowitz has been further weakened by more revelations about his conduct. The suggestion of nepotism is particularly embarrassing given his overt campaign to tackle corruption in developing countries.

The documents released yesterday showed the bank's ethics committee had not been consulted over the arrangements for Ms Riza's secondment to the state department after Mr Wolfowitz's arrival.

Ms Riza had been running the Bank's Middle Eastern department, but it was thought her relationship with Mr Wolfowitz created a conflict of interest. She was seconded to the state department on a higher grade and her salary was increased by $61,000 (about £30,770).

In a short statement, the board of the bank said its ethics committee had not been involved in the discussions with Ms Riza.

"Neither did it find that the terms and conditions of the agreement had been commented on, reviewed or approved by the ethics committee, its chairman or the board."

The statement said the board would "move expeditiously to reach a conclusion on possible actions to take. In their consideration of the matter the executive directors will focus on all relevant governance implications for the bank."

A bank source sought to play down speculation about an immediate decision, saying that the board would not be discussing Mr Wolfowitz again before they had held consultations with the bank's governors, who were arriving in Washington yesterday for the organisation's spring meeting. Hilary Benn, the development secretary, is the UK governor.

The board released documents of findings of an ad hoc group that investigated the contract agreed with Ms Riza and also included communications between Mr Wolfowitz, the board and other bank officials.

The review by the board of member countries focused on whether Mr Wolfowitz broke staff rules by his actions.

The bank president said on Thursday that he took full responsibility for Ms Riza's promotion and apologised. He said he had made a mistake in the way he handled the issue, but that he had been new in the job at the time.

The board said Mr Wolfowitz had revealed his relationship with Ms Riza while he was negotiating his own job contract and, at the directors' request, sought guidance from the board's ethics committee.

"The guidance given on an informal basis was that the employee should be relocated to a position beyond potential supervising influence," the board said.

The bank's staff representative association has called on Mr Wolfowitz to resign.