U.S. treasury secretary opposes rush to judgment on Wolfowitz

But administration sends mixed signals on support for World Bank chief

May 09, 2007|By New York Times News Service

WASHINGTON -- Treasury Secretary Henry M. Paulson Jr. endorsed yesterday the request by World Bank President Paul Wolfowitz for more time to defend himself against charges of misconduct, seeking a delay that could also give the Bush administration time to negotiate his voluntary resignation.

Two days after a special bank committee found Wolfowitz guilty of violating conflict-of-interest rules in 2005, the Bush administration sent mixed signals on how strongly it was supporting him against growing demands among U.S. allies in Europe that he resign.

Officially, the White House continued to back Wolfowitz's efforts to remain as bank president, saying that he still had the confidence of President Bush to do the job.

But White House spokesman Tony Snow also deferred to the Treasury Department for guidance, saying, "They're the ones who are fronting this."

`Deserves fair process'

Paulson feels Wolfowitz "deserves a fair process rather than a rush to judgment," according to Treasury Department spokeswoman Brookly McLaughlin. But her statement stopped short of saying Wolfowitz deserved to remain president of the bank.

European officials, asking not to be quoted by name because of the delicacy of the matter, say they believe that Paulson is sympathetic to their concern that Wolfowitz has been so wounded by the furor over charges of favoritism that he can no longer lead the bank or work with its board of directors.

They say that Paulson has listened to proposals that Wolfowitz be allowed to resign in return for European backing for the United States to nominate his successor, but that he has not begun negotiations to advance such a deal.

Administration officials say that Bush, Vice President Dick Cheney and Karl Rove, the president's top political adviser, are, for now, adamant that Wolfowitz not be ousted.

A Republican close to the White House said that Rove called Wolfowitz late last month to urge him to keep fighting for his job. But this Republican also said there were limits to what the White House could do.

"I think he's on his own," the Republican said, adding that there was "very little the White House could do to help him."

With the Treasury Department more focused on the need for a fair process, Wolfowitz's lawyer, Robert S. Bennett, skirmished with the bank on what such a process would entail.

Lawyer's demand

Bennett demanded that Wolfowitz be given at least until Monday to present new arguments to rebut the conclusion of a special panel of the bank board that he broke rules against favoritism by awarding a pay and promotion package in 2005 to his companion, Shaha Ali Riza.

But there was no indication that the bank board would deviate from its current intention to receive the panel's conclusion, along with a recommendation about what to do about Wolfowitz, as early as today and to deliberate on the matter before the end of the week.

Bennett cited what he said were bank regulations that staff members under investigation must be given ample opportunity to comment on the findings. The amount of time for the accused, according to the rules he cited, "will not be less than five business days."

Paulson did not get into the specifics of how much time Wolfowitz should be allowed, but aides said that the board should put off a decision on the matter at least until next week.

Concern over timing

Timing has become important because of the growing concern among Europeans that the best solution is for the bank's 24-member board not to vote, which could split the United States from its European partners no matter who wins.

Bank officials said that most members of the board appeared determined to oust Wolfowitz but that some would prefer not to do so with a divisive vote that could jeopardize future cooperation among the wealthy countries of the world on aiding the poorest countries.

Wolfowitz might partly comply with the investigative committee's request for an early response by issuing a point-by-point rebuttal of its main conclusion. But he wants to wait until at least Monday to present a more extensive case, people close to him said.

Part of the reason for the delay request, Bennett said, was that Wolfowitz received more than 600 pages of material to rebut on Sunday evening, including a report of more than 50 pages and additional transcripts of testimony of bank officials and documents relating to the pay, promotion and transfer of Riza.

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