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Wolfowitz to argue World Bank ethics panel aware of his role in girlfriend's pay package

WASHINGTON -- An attorney for embattled World Bank President Paul Wolfowitz said Monday the former U.S. defense official was looking forward to a hearing on his role in helping secure a promotion and pay raise for his girlfriend, who was on the bank's staff.

The controversy has prompted calls for Wolfowitz's resignation. The bank's 24-member board is expected to make a decision in the case this week.

"We're looking forward to a fair hearing and to show that Mr. Wolfowitz acted in complete good faith," Wolfowitz's attorney, Robert Bennett, said as he arrived outside the development bank's downtown headquarters.

[CAPTION=Embattled World Bank President Paul Wolfowitz, right, speaks with guests at an event in the Rose Garden of the White House April 25, in Washington, D.C. Wolfowitz' attorney stated anew on Monday that the former U.S. defense official has no plans to step down. Photo: Brendan Smialowski/Bloomberg News]

A special bank panel investigating Wolfowitz' handling of the 2005 promotion of bank employee Shaha Riza was scheduled to hear from Wolfowitz and Riza later in the day. Bennett indicated he was hopeful Wolfowitz's arguments would help him garner support; he stated anew on Monday that Wolfowitz has no plans to step down.

"I hope the temperature is lowered here. Mr. Wolfowitz will not resign in the face of false allegations," Bennett said.

Meanwhile, German Chancellor Angela Merkel, in Washington for a U.S.-European Union summit at the White House, said Monday she didn't believe the Wolfowitz matter would come up during her discussions with President Bush. "I don't think that this will be on the agenda," she said.

The Europeans, including a German government official, have been critical of Wolfowitz. The European Parliament has called on him to resign.

Wolfowitz, an architect of the Iraq war in his preceding Pentagon job, will cite a Feb. 28, 2006, letter that his attorney characterizes as showing the bank's ethics committee had looked at the arrangement.

The panel's chairman, Ad Melkert, said in the letter that an allegation relating to "a matter which had been previously considered by the committee did not contain new information warranting any further review."

The letter didn't specifically mention Wolfowitz or Riza by name. However, Bennett said the letter is proof that Melkert was aware of Wolfowitz's role in securing the compensation package.

The bank's executive directors, however, have said the terms and conditions of the package had not been "commented on, reviewed or approved" by the ethics committee, Melkert or the bank's board.

Riza was working at the bank when Wolfowitz arrived in 2005. She was reassigned at the State Department to avoid a conflict of interest but remained on the bank's payroll, eventually getting $60,000 in pay raises to $193,590.

Melkert's February 2006 letter informed Wolfowitz that the ethics committee had reviewed two e-mails from an anonymous whistleblower alleging ethical lapses by the World Bank's president. One e-mail complained about the size of Riza's pay raise.

"Mr. Wolfowitz did not want to get involved but they made him get involved" in Riza's promotion and pay package, Bennett said. "The ethics committee approved what he did" and Riza's compensation package was "well within the parameters" of the World Bank's salaries and benefits structure, Bennett added.

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