Bush picks new World Bank leader

President Bush has chosen Robert B. Zoellick, a former U.S. trade representative and deputy secretary of State, to replace Paul D. Wolfowitz as president of the World Bank, a senior administration official said Tuesday.

Wolfowitz announced his resignation this month after a bank investigation found that he had violated bank policies by involving himself in personnel decisions regarding a staff member with whom he was romantically involved.

Wolfowitz said he would leave his post by the end of June.

Zoellick is almost certain to be approved by the bank’s 24 board members, a third of whom are European. The position does not require Senate confirmation.

“The president believes that Bob Zoellick’s experience and long career in international trade, finance and diplomacy make him uniquely prepared to take on this challenge,” said the senior administration official, who spoke on condition of anonymity because Bush did not plan to formally name Zoellick until today. “He has the trust and respect of many officials around the world.”

Since the World Bank and the International Monetary Fund were created in 1944 to put the world’s financial system together after World War II, the United States has named the World Bank president and Europeans have chosen the IMF’s managing director.

The fund comes to the aid of countries undergoing financial crises, usually by forcing them to adopt austere spending and tax policies, and the bank provides grants and low-interest loans to the poorest countries.

Wolfowitz, because he had been Bush’s deputy secretary of Defense and an architect of the 2003 invasion of Iraq, had one strike against him, in the view of the bank’s staff, when he was named the institution’s president two years ago.

He quickly got a second strike by surrounding himself with highly paid aides from the Pentagon and by seeming to freeze out the bank’s career experts.

The third strike came this year when it was revealed that Wolfowitz had helped approve pay raises for his companion, Shaha Ali Riza, as compensation for forcing her off the bank’s staff to avoid a conflict of interest. Riza was moved to the State Department but was still paid by the World Bank -- handsomely. Her salary of $193,590 exceeded that of Secretary of State Condoleezza Rice.

Zoellick will arrive at the bank with a reputation as a straight shooter.

“He believes deeply in the World Bank’s mission of lifting people out of poverty,” the senior administration official said.

As U.S. trade representative -- a Cabinet-level position -- in Bush’s first term, Zoellick was involved in negotiations to bring China into the World Trade Organization.

At the start of Bush’s second term, he moved to the State Department, where he focused on U.S. relations with China and efforts to end the violence in the Darfur region of Sudan.

As an aide to President George H.W. Bush, he helped negotiate the North American Free Trade Agreement with Canada and Mexico.

“Through his leadership for international trade, I know he has a real understanding of what it takes to advance economic development in poor countries,” Sen. Charles E. Grassley of Iowa, the top Republican on the Senate Finance Committee, said in a statement.

“At the World Bank, I want to see Ambassador Zoellick continue the vigorous campaign that Paul Wolfowitz started against corruption in beneficiary countries,” Grassley said. “The World Bank is in need of reform from top to bottom.”

Bea Edwards, international director of the Government Accountability Project, a whistle-blower protection organization that revealed much of the information that led to Wolfowitz’s resignation, said the choice of Zoellick came as no surprise.

“He’s a free-trader who could shore up the administration’s trade agenda,” she said.

But from the standpoint of Europeans and the developing world, which are not as wedded to free trade, Zoellick is “another in-your-face” appointment, Edwards said.

Since leaving the State Department about a year ago, Zoellick, 53, has been a managing director and vice chairman, international, at Goldman Sachs, advising the investment firm on global strategy.

He was recommended for the World Bank by Treasury Secretary Henry M. Paulson Jr., who was chairman of Goldman Sachs before coming to Washington last year.

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joel.havemann@latimes.com

maura.reynolds@latimes.com

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(BEGIN TEXT OF INFOBOX)

Robert B. Zoellick

Age: 53.

Education: Bachelor of arts, Swarthmore College, 1975; master’s in public policy and law degree, Harvard University, 1981.

Experience: Executive at Goldman Sachs, 2006 to present; deputy secretary of State, February 2005 to June 2006; U.S. trade representative, 2001 to 2005; fellow at Washington think tank German Marshall Fund, 1999-2001; chief executive officer-designate, Center for Strategic and International Studies in Washington, 1998-99; professor of national security, U.S. Naval Academy, 1997-98; executive vice president, Fannie Mae, 1993-97; deputy chief of staff to President George H.W. Bush, 1992-93; undersecretary of State, 1989-92; various jobs in the Treasury Department, including counselor to Secretary James A. Baker III, 1985-88; chief executive officer of board, Fannie Mae, 1983-85.

Family: Wife, Sherry

Source: Associated Press