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WASHINGTON - World Bank President Paul Wolfowitz said today he made "a mistake for which I am sorry" over his handling of the promotion and pay increase of his girlfriend and staffer Shaha Riza.
"I proposed to the board that they establish some mechanism to judge whether the agreement reached was a reasonable outcome," Wolfowitz said in a statement he read at a news conference, ahead of the upcoming meetings of finance ministers in Washington this weekend.
"I will accept any remedies they propose," he added.
Wolfowitz defended his actions to send Riza on an external assignment to the US State Department soon after he joined the bank in 2005, saying he was in "uncharted waters" in his new job.
"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," he said.
But the World Bank's employee representative group called for Wolfowitz's to quit during a staff meeting at the bank.
"The president must acknowledge that his conduct has compromised the integrity and effectiveness of the World Bank Group and has destroyed the staff's trust in his leadership," according to written remarks by staff association chair, Alison Cave, at the meeting, obtained by Reuters.
"He must act honorably and resign," she said.
Cave said it seemed impossible for the institution, whose mission is to fight global poverty, to move forward "with any sense of purpose under the present leadership."
Witnesses said Wolfowitz arrived at the meeting where he tried to defend his actions.
"Wolfowitz came in and stood on the side to listen, then was invited by Alison to speak to the assembled staff," one source said.
The controversy erupted last week when the bank's staff association questioned the promotion and pay increase of Riza, prompting an investigation by the bank's board of member countries.
The probe is focused on whether Wolfowitz gave preferential treatment to Riza, violating staff rules.
Wolfowitz joined the bank after serving as deputy defence secretary at the Pentagon, where he was one of the chief architects of the US war strategy in Iraq.
Lingering distrust with Wolfowitz among many staff and resentment over his close ties to the Bush administration and his role in the Iraq war has overshadowed his first two years at the bank.
"For those people who disagree with the things that they associate me with in my previous job -- I'm not in my previous job," Wolfowitz said. "I'm not working for the US government."
Wolfowitz said he told the board about his relationship with Riza when he joined the bank to address potential conflict of interest issues. He said he took the advice of the board's ethics committee to relocate Riza.
Riza, a former senior communications officer in the Middle East Department, had worked at the bank for eight years before she was seconded to US State Department in September 2005.
The board is made up of representatives of the bank's 185 shareholder governments.
Pressed by reporters, Wolfowitz said he would not speculate what the board could decide -- or whether he would be forced to resign. "I made it clear to them I was trying to make a judgment of what was reasonable" he added.
- REUTERS
