Can Mr. Wolfowitz Respect The Probe?

WASHINGTON: World Bank nations launched a broad investigation on Friday into bank president Paul Wolfowitz, who faces growing pressure to resign over a hefty pay raise he secured for his girlfriend.

The bank's 24-member board agreed to deal with the crisis "urgently" and said it would look at issues including "conflict of interest, ethical, reputational and other relevant standards".

Wolfowitz welcomed the decision in a brief statement and said he "looks forward to implementing the recommendations of the board".

The former US deputy defence secretary's position atop the 185-nation development lender has eroded in recent weeks after he admitted ordering a $60,000 raise for his companion Shaha Riza.

A World Bank employee, she was loaned out to the US State Department under the deal to avoid a potential conflict of interest when Wolfowitz took over the helm of the bank in June 2005.

Critics accuse Wolfowitz of favouritism that undermines a global drive against corruption that he has made the hallmark of his tenure.

The bank's staff association says the pay increase breached bank rules and has urged Wolfowitz, 63, to quit.

Germany, Britain and France have pointedly refused to support him and the World Bank's top steering committee Sunday expressed "great concern" about the affair, which has preoccupied the Washington-based bank for days.

Board members also launched an investigation of "issues around employment contracts made in the office of the president", an apparent reference to two senior personal aides brought in by Wolfowitz who have ties to the Bush administration.

Staff members have reportedly been disgruntled by the appointments and by Wolfowitz's reportedly aloof management style.

Wolfowitz has apologised for his conduct in the Riza affair, but rejected calls to step down. His term runs for five years.

Regional splits have reportedly developed between his supporters and foes, complicating the decision-making. The US, the largest single contributor to the World Bank's capital, stands behind him.

The White House Thursday reiterated its support for Wolfowitz, who was appointed by President George W. Bush after playing a leading role in planning the US-led invasion of Iraq and its aftermath.

The board, which includes a US representative, set up a special committee to carry out the probe. No deadline was set.

In making recommendations, the panel may look at staff rules and Wolfowitz's contract as World Bank president for guidance, a board statement said.

One reason the scandal developed is because no incoming president in the bank's 62-year history has faced the policy question of how to deal with a romantic companion working at the bank at the same time.