Paul Wolfowitz AP PHOTO

Wolfowitz, who maintains that he acted in good faith, tried to defend himself before the bank's 24-member board May 15. The board, whose proceedings are carried out behind closed doors, ultimately will decide what actions to take against him.

Board members have discussed a range of disciplinary options. It could fire Wolfowitz, ask him to resign, signal that it lacks confidence in his leadership or reprimand him. Board members have been leaning toward an expression of no confidence or other tough language that would make it difficult -- if not impossible -- for Wolfowitz to stay on.

The controversy that has put Wolfowitz's job in jeopardy involves his handling of the 2005 compensation package for his girlfriend, Shaha Riza, a bank employee.

A special bank panel, in a report released May 14, concluded that Wolfowitz broke bank rules in his handling of the pay package. It said the board must consider whether Wolfowitz "will be able to provide the leadership" to ensure that the bank achieves its mission of fighting poverty around the world.

In a response, Wolfowitz said, "It is highly unfair and unwarranted to now find that I engaged in a conflict of interest because I relied on the advice of the ethics committee as best I understood it."

The Japan Times Weekly: May 19, 2007
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