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Last Updated: Friday, 13 April 2007, 12:18 GMT 13:18 UK
Paul Wolfowitz/World Bank statements
World Bank President Paul Wolfowitz
Mr Wolfowitz has asked for some understanding

World Bank President Paul Wolfowitz is facing calls to resign after admitting he helped his partner Shaha Riza gain a promotion to a high-paying job at the organisation.

The bank's powerful executive board has said it never gave approval for a wage rise for Ms Riza ordered by Mr Wolfowitz, despite claims to the contrary by the World Bank president.

Reproduced below are comments made on the increasingly controversial issue made by both sides.

EXTRACT FROM PAUL WOLFOWITZ'S ADDRESS, THURSDAY 12 APRIL

Two years ago, when I came to the bank, I raised the issue of a potential conflict of interest, and I asked to be recused from the matter. 

I took the issue to the ethics committee of the board, and after extensive discussions with the chairman, the committee's advice was to promote and relocate Ms Shaha Riza.

I made a good-faith effort to implement my understanding of that advice, and I did so in order to take responsibility for settling an issue that I believe had the potential to harm this institution. 

In hindsight, I wish I had trusted my original instincts and kept myself out of the negotiations. 

I made a mistake for which I am sorry.

But let me also ask for some understanding. Not only was this a painful personal dilemma, but I had to deal with it when I was new to this institution, and I was trying to navigate in uncharted waters. 

The situation was unprecedented and exceptional. 

This was an involuntary reassignment, and I believed there was a legal risk to the institution if it was not solved by mutual agreement. 

I take full responsibility for the details of the agreement, and I did not attempt to hide my actions or to make anyone else responsible.

I met with the board this morning, and I proposed to them that they establish some mechanism to judge whether the agreement reached was a reasonable outcome.

I will accept any remedies they propose.

WORLD BANK EXECUTIVE BOARD PRESS RELEASE

The executive directors of the World Bank Group at a meeting on 6 April formed an ad hoc group to investigate the facts concerning a contract for a staff member closely associated with the president.

The executive directors met today, 12 April, to review the report and the documents obtained by the ad hoc group.

The executive directors welcomed the report, which they are disclosing publicly immediately together with the associated documents reviewed by the ad hoc group.

The executive directors recalled that, in negotiations between the president and the board concerning his employment contract, he revealed a conflict of interest involving a staff member.

At the request of the executive directors, the president sought guidance from the ethics committee.

The guidance given on an informal basis was that the employee should be re-located to a position beyond potential supervising influence by the president or assigned to external service and compensated for the potential disruption to her career by an in situ promotion as consistent with the practice of the bank; and that the president, with the general counsel, should communicate this advice to the vice president, Middle East and North Africa, and the vice president, human resources, so as to implement it with immediate effect.

The president then sent the vice president, human resources, a written memorandum directing him to reach an agreement with the staff member and specifying in detail the terms and conditions.

The executive directors noted that the group found that the ethics committee, including its chairman, had not been involved in the discussions with the concerned staff member.

Neither did it find that the terms and conditions of the agreement had been commented on, reviewed or approved by the ethics committee, its chairman or the board.

The executive directors will move expeditiously to reach a conclusion on possible actions to take.

In their consideration of the matter the executive directors will focus on all relevant governance implications for the Bank.


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