European Bank Chief Quits After Incriminating Audit : Banking: Jacques Attali’s early resignation follows report showing lavish spending.

Jacques Attali, president of the European Bank for Reconstruction and Development, quit Friday--two months earlier than anticipated--after his institution was blasted in an audit report for excessive spending.

The French Attali had submitted his resignation in June amid a storm of criticism of the bank’s lavish spending for its London-based headquarters. He had been asked to stay on until a successor was appointed, probably in September.

But Coopers & Lybrand, the institution’s consulting auditors, reported Friday that Attali had spent 24% more on construction of the bank’s headquarters than was authorized and budgeted. The bank’s cost soared to $100 million or so when its fancy marble interiors were upgraded with stone of even higher quality and price.

The institution, which was to lend money to impoverished Eastern European nations, also bought chairs costing $1,500 each.

Auditors also criticized the bank for its sloppy financial controls on the free-spending Attali and other top officials. Attali, the report noted, had steered some of the pricey work at the bank to French firms without seeking competitive bids.

Attali, 50, an intellectual confidant of French President Francois Mitterrand, also came under fire personally for foisting his style of high living on the bank.

The report said he ran up hundreds of thousands of dollars in jet charters when commercial flights were available. Attali and other bank officials took clients to expensive nightclubs and staged lavish champagne parties, it said.

Attali also let himself be reimbursed doubly for some expenses, according to the auditors.

The bankers’ practices, critics said, damaged their institution’s credibility with Eastern European clients who were seeking funds to finance various free-enterprise projects. The bank was set up by 54 nations in 1990 to channel funds into the former Soviet Bloc nations. But much of its money never made it to East Europe, because proposals in those nations remained mired in institutional bureaucracy.

As of Friday evening, it was unclear whether Attali would receive the $220,000 severance originally due him.

At a news conference, Claes de Neergard--a bank director for Sweden, Iceland and Estonia and the audit committee chairman--declined to elaborate on Attali’s personal expenditures. But the Associated Press said he noted, “In this document which we delivered to the board yesterday, we have not found any evidence of fraud.”

The bank’s first vice president, Ron Freeman, will be in charge until a new president is named.