Wolfowitz pushing for face-saving deal

After six weeks of fighting efforts to oust him as president of the World Bank, Paul D Wolfowitz began on Wednesday to negotiate the terms under which he would resign

After six weeks of fighting efforts to oust him as president of the World Bank, Paul D Wolfowitz began on Wednesday to negotiate the terms under which he would resign, in return for the bank dropping or softening the charge that he had engaged in misconduct, bank officials said. Wolfowitz was said to be adamant that he be cleared of wrongdoing before he resigns.

The crisis over leadership at the World Bank could come to a head on Thursday when the board meets to discuss the issue. 8220;Wolfowitz will not resign under this cloud and he will rather put this matter to a full board vote than to capitulate on his integrity,8221; said his lawyer Robert S Bennett.

But bank officials said they were increasingly hopeful that a solution was in sight, ending what has become a bitter ordeal at the bank, within the Bush administration and at economic ministries around the world. Officials said the executive directors were completing an 8220;exit strategy8221; that would allow Wolfowitz to resign and 8220;still save some face8221; over his efforts to arrange a promotion and pay raise for his companion, Shaha Riza.

People close to the negotiations said the threat to oust Wolfowitz had taken a U-turn on Wednesday, with Wolfowitz challenging the bank8217;s directors to vote him out, knowing that the US would oppose that move. In effect, bank officials said, he was using the fear among European leaders at the bank of a possible rupture with the Bush administration at a time when the US and Europe are struggling to cooperate on Iran sanctions, trade and other economic issues.

8220;The bank board is ready to vote Wolfowitz out of office, and Wolfowitz is calling their bluff,8221; said a bank official briefed on the negotiations. 8220;It8217;s going to be difficult for the board to drop its charges against him, but they8217;re going to have to do it if they want to resolve this. They8217;re staring each other down, but the bank side is blinking furiously.8221;

Bank officials said it appeared that both the White House and the Treasury Department were involved in guiding Wolfowitz8217;s strategy, and that the interests of the US were being represented at the bank by the American director on the board, Eli Whitney Debevoise II. Debevoise, a Washington attorney, arrived at his job at the bank in early April, the precise moment when the furor over Wolfowitz erupted.

Especially galling to bank board members, officials said, was Wolfowitz8217;s request that the 24-member bank board reject the conclusions of its seven-member sub-committee charging him with violating several codes of conduct and trying to cover up his involvement in Riza8217;s salary and promotion.

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Speculation about Wolfowitz8217;s successor ranged from Paul A Volcker, former chairman of the Federal Reserve, to British Prime Minister Tony Blair and Stanley Fischer, the finance minister of Israel and a former top official at the International Monetary Fund. Also mentioned have been various prominent figures on Wall Street, including Douglas A Warner III, a former chairman of JP Morgan Chase and chairman of the Memorial Sloan-Kettering Cancer Centre. In addition, speculation has centered on two officials close to Bush: Deputy Treasury Secretary Robert Kimmitt and Robert Zoellick, a former deputy secretary of state.