Wolfowitz hints at deal with bank

Paul D Wolfowitz declared on Monday that it would be 8220;unjust and frankly hypocritical8221; for the World Bank8217;s board to find him guilty of ethical lapses.

Paul D Wolfowitz declared on Monday that it would be 8220;unjust and frankly hypocritical8221; for the World Bank8217;s board to find him guilty of ethical lapses. But he also hinted that he would discuss whether to resign as bank president if the board cleared him of misconduct.

Appearing before a committee of the bank8217;s board of directors and going on the attack after weeks of silence, Wolfowitz also charged that he had been the victim of 8220;orchestrated leaks of false, misleading, incomplete and personal information8221; intended to 8220;undermine my effectiveness as president.8221;

8220;The goal of this smear campaign, I believe, is to create a self-fulfilling prophecy that I am an ineffective leader and must step down for that reason alone, even if the ethics charges are unwarranted,8221; he said. 8220;I, for one, will not give in to such tactics. And I will not resign in the face of a plainly bogus charge of conflict of interest.8221;

Wolfowitz8217;s defiant response left unclear what would happen next, but many at the bank saw it as a prelude to his eventual departure if negotiations could lead to the board8217;s endorsement of his claim that he had acted in good faith, not favoritism, in arranging for a pay increase for Shaha Ali Riza, his companion, in 2005. She was, at the time, being transferred to the State Department.

On Monday, the seven-member committee of the bank8217;s board also heard Riza8217;s testimony, who charged that she had been unjustly pushed out of the bank by 8220;a powerful group8221; that had been hostile to her over other matters. It was not clear who those officials were. But ethics officials in 2005 who ordered Wolfowitz to arrange for her transfer out of the bank with some form of compensation, which ended up being a salary increase and a promotion that have drawn fire from critics, are also due to testify before the committee.

The board committee is to digest all the testimony, decide whether Wolfowitz violated any rules in his direct role in the matter of the compensation package, give him a chance to respond, and forward its final recommendation to the 24-member board by Thursday. The board could then take action on the matter by the end of the week.

8211;STEVEN R WEISMAN