Wolfowitz refuses to resign presidency of World Bank

His job as World Bank president at stake, an unrepentant Paul D. Wolfowitz told a bank committee investigating him for possible conflict of interest Monday that he had been the target of a “smear campaign” practically from the day he arrived at the bank nearly two years ago.

“I will not resign in the face of a plainly bogus charge of conflict of interest,” Wolfowitz told the committee exploring whether he obtained a handsome pay raise for his girlfriend.

In his first public comments on the controversy in 10 days, Wolfowitz said he had “acted transparently, sought and received guidance from the bank’s ethics committee, and conducted myself in good faith in accordance with that guidance.”

Wolfowitz, an architect of the Iraq war as deputy U.S. Defense secretary from 2001 to 2005, appeared with his partner, Shaha Ali Riza, and his lawyer, Robert S. Bennett, before an investigative committee of the bank’s board Monday to plead his case. The investigative panel met behind closed doors into the evening without resolving the issue.

While the committee was meeting, Wolfowitz received an endorsement from President Bush, his former boss, but only a noncommittal statement from a key European official.

“My position is he ought to stay and should be given a fair hearing,” Bush said after a meeting with top officials of the European Union. “He’s helped the World Bank recognize that eradication of world poverty is an important priority for the bank.”

Bush nominated Wolfowitz to the World Bank job in 2005. But the bank’s board, whose 24 members come from 24 countries, will decide his future. The board includes Germany, whose chancellor, Angela Merkel, met Monday with Bush.

Merkel, appearing with Bush, offered Wolfowitz no endorsement, saying only that the bank board’s inquiry “should be a very transparent conversation.”

The Europeans, with whom the Iraq war has never been popular, are among Wolfowitz’s most outspoken detractors on the bank’s board. However, the board has never unseated a bank president, and bylaws apparently do not contemplate the possibility.

By tradition, the United States, the bank’s single biggest subscriber, selects its president, whom the board in turn elects by acclamation. The president serves for five years.

It is not clear how large a majority it would take to remove Wolfowitz forcibly. Each country casts votes according to the percentage of bank funds it contributes. The United States is the most powerful, with 16% to 17% of the vote. Super-majorities are required for some board actions; a super-majority requirement to remove Wolfowitz effectively would give the United States a veto.

If the board hopes to force Wolfowitz into resigning, as many observers believe it does, his hiring of Bennett to defend him may have been a setback for the board. Bennett, who represented President Clinton in the Monica S. Lewinsky affair, is known for his tenacity.

“He has a reputation of being quite aggressive and quite effective,” said Carl Tobias, a constitutional law professor at the University of Richmond.

As Wolfowitz wrangled with bank investigators, the Government Accountability Project, a private organization that protects government whistleblowers, quickly questioned several parts of his opening statement to the investigating committee.

For example, Wolfowitz said that when he arrived at the bank, his companion, Riza, was on a short list of candidates for a management-level position in communications -- a promotion that he said she couldn’t get if she were forced to leave the bank staff.

However, Bea Edwards, the group’s director of international programs, said Riza did not have the graduate-level degree in communications required for such a promotion.

Riza was forced to leave the World Bank staff for the State Department when Wolfowitz was appointed president two years ago, receiving a raise and promotion in the process.

joel.havemann@latimes.com