World Bank president Paul Wolfowitz faced a fight for his political life yesterday after the development lender's directors demolished his defense in a favoritism scandal surrounding his girlfriend.
As calls mounted for the former US deputy defense secretary to resign, the 24 executive directors issued a statement that left Wolfowitz squarely isolated heading into a weekend of high-level talks among global financial leaders.
After a day-long emergency meeting that stretched late into the night, the board detailed the findings of its investigation into the row over Wolfowitz's Libyan-born partner, Shaha Riza.
More than 100 pages of documents released with the statement revealed that on Wolfowitz's personal direction, Riza was given raises that took her annual pay package to nearly US$200,000 when she was reassigned from the World Bank to the US State Department.
Riza remained on the World Bank payroll despite her move, which was to forestall any conflicts of interest after Wolfowitz took charge of the bank in June 2005.
"The executive directors will move expeditiously to reach a conclusion on possible actions to take," the board's statement said. "In their consideration of the matter, the executive directors will focus on all relevant governance implications for the bank."
The controversy engulfing one of the architects of the war in Iraq threatened to overshadow talks yesterday among finance ministers from the G7 nations.
Ahead of the bank's annual spring meeting this weekend, whose formal agenda threatens to be engulfed by the dispute, Wolfowitz said on Thursday "I will accept any remedies" proposed by the executive board.
"I made a mistake, for which I am sorry," Wolfowitz told a news conference.
He said that "in hindsight, I wish I had trusted my original instincts and kept myself out of the negotiations" over Riza's generous pay deal.
But his mea culpa was not enough for the World Bank's staff association, which said Wolfowitz had "destroyed" the trust of employees and should quit.
"He must act honorably and resign," the de facto union said in a letter to the World Bank's 10,000 rank-and-file staff.
In an editorial yesterday, the Financial Times also called for Wolfowitz to go, either voluntarily or at the behest of the board.
"If the president stays, [the World Bank] risks becoming an object not of respect, but of scorn, and its campaign in favor of good governance not a believable struggle, but blatant hypocrisy," it said.
But the conservative Wall Street Journal called the controversy "trivial" in an editorial.
"The forces of the World Bank status quo are now making their power play," the Journal wrote, suggesting the fracas involved resistance to Wolfowitz's efforts to make the bank and its borrowers more accountable.
Tropical Storm Gaemi strengthened into a typhoon at 2pm yesterday, and could make landfall in Yilan County tomorrow, the Central Weather Administration (CWA) said yesterday. The agency was scheduled to issue a sea warning at 11:30pm yesterday, and could issue a land warning later today. Gaemi was moving north-northwest at 4kph, carrying maximum sustained winds near its center of up to 118.8kph and gusts of 154.8kph. The circumference is forecast to reach eastern Taiwan tomorrow morning, with the center making landfall in Yilan County later that night before departing from the north coast, CWA weather forecaster Kuan Shin-ping (官欣平) said yesterday. Uncertainty remains and
SEA WARNING LIKELY: The storm, named Gaemi, could become a moderate typhoon on Wednesday or Thursday, with the Taipei City Government preparing for flooding A tropical depression east of the Philippines developed into a tropical storm named Gaemi at 2pm yesterday, and was moving toward eastern Taiwan, the Central Weather Administration (CWA) said. Gaemi could begin to affect Taiwan proper on Tuesday, lasting until Friday, and could develop into a moderate typhoon on Wednesday or Thursday, it said. A sea warning for Gaemi could be issued as early as Tuesday morning, it added. Gaemi, the third tropical storm in the Pacific Ocean this typhoon season, is projected to begin moving northwest today, and be closest to Taiwan on Wednesday or Thursday, the agency said. Today, there would likely
DISRUPTIONS: The high-speed rail is to operate as normal, while several airlines either canceled flights or announced early departures or late arrivals Schools and offices in 15 cities and counties are to be closed today due to Typhoon Gaemi, local governments announced last night. The 15 are: Taipei, New Taipei City, Taoyuan, Tainan, Keelung, Hsinchu and Kaohsiung, as well as Yilan, Hualien, Hsinchu, Miaoli, Chiayi, Pingtung, Penghu and Lienchiang counties. People should brace for torrential rainfall brought by the storm, with its center forecast to make landfall on the east coast between tonight and tomorrow morning, the Central Weather Administration (CWA) said. The agency issued a sea warning for the typhoon at 11:30pm on Monday, followed by a land warning at 11:30am yesterday. As of
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