Wolfowitz arranged girlfriend's pay deal

WASHINGTON — World Bank President Paul Wolfowitz personally dictated the terms under which the bank gave what it called his "domestic partner" substantial raises and promotions in exchange for temporarily leaving her job there during his tenure, according to documents released by the bank's executive board Friday.

The board issued a statement saying it will "move expeditiously to reach a conclusion on possible actions to take," amid rising speculation over whether Wolfowitz will resign or be asked to step down.

Board deliberations over his future were suspended Friday morning as the bank began its spring meeting.

"He has apologized, and there is a process in place," said Treasury Secretary Henry Paulson after a meeting with his counterparts from the world's richest nations Friday. "I don't intend to comment on that here."

Wolfowitz, 63, joined the bank in 2005 after working at the Pentagon, where as deputy defense secretary he was a principal architect of the Iraq war. This made him a controversial figure at the bank, where he engendered resentment among its member nations and 7,000 employees in Washington, D.C.

A number of the bank's leading donor nations, including Britain, expressed public concern about aspects of his leadership long before the uproar over his girlfriend, Shaha Riza, which began when details of her compensation package were revealed last month.

Riza accepted a promotion to the State Department in September 2005 shortly after Wolfowitz joined the bank, after a World Bank ethics committee said she should be relocated to avoid conflict-of-interest issues.

As bank employees and development activist groups continued to call for Wolfowitz's resignation, White House spokeswoman Dana Perino said he has Bush's "full confidence."

Defenders surfaced from other quarters. The Wall Street Journal said in an editorial that "the forces of the World Bank's status quo," angered by Wolfowitz's efforts to fight "corruption-as-usual" and institute more accountability in the institution's lending practices, had seized on a trivial issue to bring him down.

But while few observers were prepared to predict Wolfowitz's departure, many expressed concern that the turmoil is threatening to undermine the work and credibility of the bank, which lends $23 billion a year to programs to raise literacy, fight disease and clean up the environment in developing countries.

"The issue now, as far as many of us are concerned, is a matter of corporate governance," said a senior bank employee who spoke on the condition of anonymity. "The Europeans want him out. The U.S. remains silent, and the board is divided."

Among the documents released by the board Friday was an angry letter from Riza, 52, who made clear that "I did not wish to leave the bank."

Two months after arriving at the bank on June 1, 2005, Wolfowitz sent a memo to the bank's vice president of human resources, laying out details concerning Riza's employment and compensation.

"I now direct you to agree to a proposal which includes the following terms and conditions," Wolfowitz instructed. "You should accept immediately her offer to be detailed to an outside institution of her choosing, while retaining bank salary and benefits."

The memo went on say Riza should receive a promotion, draw a salary of $180,000 and get annual pay increases of 8 percent.

Before the job change, Riza was believed to be getting paid close to $133,000. After the transfer, she received $193,590, according to the Government Accountability Project, a watchdog group.

Riza remains on the World Bank's payroll, though she left the State Department job in 2006 and now works for Foundation for the Future, an international organization that gets some money from the department.

Material from The Associated Press is included in this report.