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Embattled Wolfowitz Negotiating Future With World Bank

World Bank President Paul Wolfowitz was negotiating with the bank's board Wednesday over his future there, following widespread criticism of his handling of a pay raise and a promotion for his girlfriend. A Financial Times reporter provides an update on the situation.

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  • JIM LEHRER:

    Now, the latest on World Bank President Paul Wolfowitz. Krishna Guha has been covering the story for the Financial Times. He joins us from the paper’s Washington bureau.

    Krishna, where do things stand as we speak?

  • KRISHNA GUHA, Financial Times:

    Well, the situation is moving very quickly, Jim. We understand that Mr. Wolfowitz and his advisers are in negotiations with representatives of the World Bank board about terms and conditions around a possible resignation, the circumstances, in short, under which he would agree to leave the bank.

  • JIM LEHRER:

    And what is your understanding of the things he wants in exchange for resigning?

  • KRISHNA GUHA:

    Well, Jim, as you know, he’s under a tremendous cloud at the moment, following the publication of a report on Monday that found he broke the bank’s code of conduct, the bank’s rules, and his own employment contract when he arranged for a generous secondment package for Shaha Riza, a bank official with whom he had a romantic relationship.

    Mr. Wolfowitz is determined he will not leave under a cloud. He wants the board to make a statement that recognizes both his service at the bank and, in some ways, shares responsibility for what happened in the Shaha Riza case.

  • JIM LEHRER:

    His claim being that there were some cloudy rules that he did or did not follow or whatever — in other words, the situation that caused him to do what brought this thing down against him, he’s claiming that the bank itself was responsible for some of it. Is that correct?

  • KRISHNA GUHA:

    He’s claiming that. The problem is that the panel that wrote the report published on Monday considered these issues and, frankly, rejected Mr. Wolfowitz’s arguments. They found that, while in some cases the instructions he received were not, in their words, “a model of clarity,” nonetheless, it was essentially quite clear what he was supposed to do. And he didn’t do it.

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