Wolfowitz broke rules, says bank panel

Washington: World Bank President Paul Wolfowitz broke bank rules in arranging a hefty compensation package for his girlfriend, a situation that has caused a "crisis in the leadership" at the institution, according to a report released by a special bank panel.

Wolfowitz described the report's findings Monday as "unfair and unwarranted."

The special panel said the bank's full 24-member board must consider whether Wolfowitz "will be able to provide the leadership" to ensure that the bank achieves its mission of fighting poverty around the world. The board will ultimately decide Wolfowitz's fate.

Board members have discussed a range of disciplinary options. It could fire Wolfowitz, ask him to resign, signal that it lacks confidence in his leadership or reprimand
him. Board members have been leaning toward an expression of no confidence or other tough language that would make it difficult, if not impossible, for Wolfowitz to stay on.

Wolfowitz is scheduled to make an appearance before the board late Tuesday. The proceedings are not public. A decision could come as early as Tuesday or Wednesday.

The special bank panel concluded that Wolfowitz's involvement in the details of the package "went beyond the informal advice" given by the bank's ethics committee and
that he "engaged in a de facto conflict of interest," the report stated. Under Wolfowitz's contract as well as the code of conduct for board officials, he was required to avoid any conflict of interest, the report said.

Vice President Dick Cheney said on Monday that Wolfowitz should remain chief of the bank. The White House has repeatedly expressed confidence in Wolfowitz.