White House shifts stance on Wolfowitz

THE Bush administration, responding to growing international pressure, signalled that it would be willing to accept a change of leadership at the World Bank.

In a major shift – and with the bank yesterday set to resume deliberations over the future of the scandal-hit Paul Wolfowitz – the White House said “all options are on the table”.

Until now, the White House had stoutly backed Mr Wolfowitz. Its new position, which comes after it failed to rally support among its key allies, could pave the way for Mr Wolfowitz’s resignation if the bank drops its drive to declare him unfit to remain in office.

Mr Wolfowitz had pleaded with its executive board on Tuesday to let him keep his job.

He presented the 24-member board with a package of documents he said proved he acted in good faith in arranging a promotion and pay rise for his Libyan-born girlfriend Shaha Riza, a fellow bank employee.

A special internal panel had concluded on Monday that his involvement in the controversy represented a conflict of interest that broke bank rules.

Mr Wolfowitz, who appeared to be more conciliatory on Tuesday, saying “I am not without fault”, detailed his efforts to remove himself from the handling of Ms Riza’s transfer. He also vowed to change his management approach, which has riled bank staff since he took over.

Meanwhile, tensions continued to simmer between the US, which backed Mr Wolfowitz for the post, and some European countries, which reluctantly confirmed him in 2005 despite misgivings about his role in the Iraq war.

The White House believes the former deputy secretary of defence is being targeted for being an architect of the war – making it even more determined to stand behind him.

But mounting opposition has made this difficult. Even more glaring was the American failure to win the support of G-7 countries. With the possible exception of Japanese support, the US found itself increasingly isolated.

That could explain why the Bush administration is now qualifying its resolute support for Mr Wolfowitz by adopting a “two-track” approach.

The first track would entail the bank endorsing his leadership and recognising that his offence did not deserve a firing.

While he had made mistakes, so had others.

Once that has been resolved, White House spokesman Tony Snow said, “at some point in the future there are going to be conversations about the proper stewardship of the World Bank”.

“In that sense… all options are on the table.”