By Eoin Callan in Washington
The terms of Paul Wolfowitz’s departure as president of the World Bank caused immediate pisions within the institution.
The staff association said the board had further eroded employee confidence by accepting that Mr Wolfowitz had acted in good faith over a generous secondment package awarded to Shaha Riza, his girlfriend. Mr Wolfowitz won acknowledgement both of his service and his key assertion that the bank shared responsibility for the controversy.
Allison Cave, head of the staff association, said: “We are pleased that he is leaving. But it is unacceptable that he stays a day longer.
“The board statement and the term will damage staff confidence in the board and make reform more difficult.”
Daniel Kaufman, a governance expert at the bank, said the terms of his departure – effective from June 30 – were likely to be regarded as outrageous but might provide a basis for reconciliation between the US and European governments. He said there was still an “opportunity for a serious introspection as to the failings in governance. It was too easy to blame it all on the boss. It is necessary that he goes but it is not sufficient.
“It is important that the institution not succumb to inertia. The day after an ethics scandal like this is the day to begin a serious conversation about reform,” Mr Kaufman said.
A statement from the board said: “He assured us that he acted ethically and in good faith in what he believed were the best interests of the institution, and we accept that. We also accept that others involved acted ethically and in good faith.” It added: “At the same time, it is clear from this material that a number of mistakes were made by a number of inpiduals in handling the matter under consideration, and that the bank’s systems did not prove robust to the strain under which they were placed.”
A member of the staff association said: “I don’t think they can say he acted in good faith based on the documents.” However, the association member conceded: “The ethics committee could have followed up more closely, there were inpidual decisions taken by members of the executive, and weaknesses in the governance structure were exposed.”
Others were angry at the very possibility of any agreed exit. Another member of the staff association said: “No deal. Fire him.”
The way for Mr Wolfowitz’s departure was cleared hours before the resignation with valedictory praise from George W. Bush.
The US president said: “I regret that it has come to this. I admire Paul Wolfowitz. I admire his heart and I particularly admire his focus on the poor.”
He added: “I know that Paul Wolfowitz has a interest in what’s best for the bank.”
Mr Wolfowitz’s lawyer, Robert Bennett, insisted he would not leave “under a cloud”.
Members of the board resisted the idea that they should accept part of the responsibility for what the report judged were Mr Wolfowitz’s ethics violations.
The Financial Times Limited 2007