Development group Oxfam urge Wolfowitz to resign

from Reuters

By Lesley Wroughton

WASHINGTON - International development group Oxfam urged World Bank President Paul Wolfowitz to step down in a letter on Sunday, saying his leadership had "become untenable" and the bank's poverty-fighting mission already damaged by the crisis surrounding him.

In the letter released to Reuters, Oxfam International Executive Director Jeremy Hobbs said World Bank staff had clearly stated they were unable to carry out their jobs and the institution was in a state of paralysis.

"Irreparable divisions have now been opened up and the role of the World Bank in the fight against poverty is being deeply compromised," Hobbs wrote, in the first public remarks by a major development group on the issue. The letter was to be published on Monday in The Guardian newspaper.

"We believe that the World Bank's ability to act as a leading development institution has already been so damaged that Mr. Wolfowitz's continued presidency of the World Bank is untenable," Hobbs wrote.

Wolfowitz is under fire over leaked documents that show he directed a promotion for his bank-employed girlfriend, Shaha Riza, soon after he joined the bank in 2005.

Wolfowitz and Riza and their lawyers will appear on Monday before a special bank panel, appointed by the World Bank's board of shareholder governments to discuss the issue.

The committee is looking into whether Wolfowitz breached ethical or other rules when he approved the promotion for Riza, who had been at the bank for eight years before Wolfowitz was nominated by U.S. President George W Bush to lead the institution.

SOME U.S. DEMOCRATS SEEK RESIGNATION

The former U.S. deputy defense secretary and key Iraq war architect has apologized for how he handled the promotion. He has said he was new to the job and acted on the advice of a board ethics committee even though he asked to be recused from handling the matter.

Meanwhile some U.S. Democrats increased calls for Wolfowitz to step down, with presidential candidate Bill Richardson, a former U.N. ambassador and current governor of New Mexico, calling for his resignation on Sunday.

"He should resign. I just think that he compromised the integrity of the bank," Richardson told reporters at the annual meeting of the California Democrat party in San Diego.

Another presidential candidate, John Edwards, a former U.S. senator and vice presidential nominee in 2004, has also called for Wolfowitz's resignation.

It is unclear what steps the World Bank board might take on Wolfowitz because of the unprecedented nature of the issue.

Hobbs said a strong World Bank was especially necessary now, when aid by rich countries was on the decline.

The Oxfam chief also said the issue highlighted the need to change the way the head of the World Bank is chosen.

Since the founding of the World Bank and its sister organization the International Monetary Fund 62 years ago, the White House has chosen the head of the bank, while the helm of the IMF is occupied by a European.