Wolfowitz says sorry for 'mistake' over pay rises

Washington: World Bank president Paul Wolfowitz yesterday apologised for making a "mistake" over hefty pay rises given to his girlfriend at the development lender, amid an uproar about alleged favouritism.

"I made a mistake for which I am sorry," Wolfowitz told a press conference.

The former deputy US defence secretary refused to say if he might have to resign as the World Bank's board of governors met to discuss the row yesterday. "I'm not going to pre-empt their deliberations," he said, but added: "I will accept any remedies they propose.

"This was not in any way to protect personal interests. My real regret was that I didn't more forcefully keep myself out it," he said.

"I take full responsibility for the details of the agreement," he added, after explaining he had followed advice given by the bank's ethics committee on the employment of his Libyan-born partner, Shaha Riza.

She was transferred from the World Bank's communications office to the US State Department in line with bank regulations to avoid a conflict of interest after Wolfowitz's appointment in mid-2005.

While still on the World Bank payroll, she was rapidly promoted and ended up with a nearly $200,000 (Dh734,390) package - more even than Secretary of State Condoleezza Rice.

Wolfowitz acknowledged the situation surrounding Riza "had the potential to harm this institution" and stressed he had initially wanted no involvement in her employment terms.

Given his romantic involvement with her, he faced a "painful personal dilemma when I was new to the institution" but had made a "good-faith effort to promote my understanding of that advice" of the ethics committee.

The committee's advice had been to "promote and relocate" Riza out of the World Bank, he said, although that is disputed by some bank staff.

According to a Financial Times report yesterday, Wolfowitz personally ordered the hefty pay rises given to Riza.

It cited two people who had seen a memo from Wolfowitz to the head of human resources spelling out the terms of the package.