World Bank President Paul Wolfowitz lashed back at critics on Monday who he said were conducting a smear campaign against him and vowed he would not resign.
In a statement to a bank panel looking into whether he broke ethical and other rules in a pay-and-promotion deal he directed for his girlfriend, Wolfowitz said treatment of the issue had become "circus like."
"The goal of this smear campaign, I believe, is to create a self-fulfilling prophecy that I am an ineffective leader and must step down for that reason alone, even if the ethics charges are unwarranted," Wolfowitz said.
"And, I will not resign in the face of a plainly bogus charge of conflict of interest," he said in the statement.
The former deputy US defense secretary, whose legacy as an architect of the Iraq war has dogged his tenure at the bank, did not rule out the possibility he may eventually step down, but made clear he would not be forced.
"Only when the cloud of these unfair and untrue charges is removed, will it truly be possible to determine objectively whether I can be an effective leader of the World Bank," Wolfowitz said.
Sources said the meeting with the seven-member panel, led by Dutch director Herman Wijffels, lasted about two hours, and focused on conflict of interest issues over the promotion for Shaha Riza, an Oxford-educated Middle East specialist.
Riza also met the panel on Monday, where she described her personal aguish over the controversy that she said had now harmed the bank.
In a statement, obtained by Reuters, Riza said she felt under attack by a "powerful group" of bank managers who wanted her out because of her relationship with Wolfowitz.
Riza said she could not understand why she was singled out for such treatment when in 2005 the bank's then-Managing Director Shengman Zhang's wife, Lingzhi Xu, also worked at bank, and, previously, so did Maritta Koch-Weser, the wife of former managing director Caio Koch-Weser.
BUSH REPEATS SUPPORT
At a news conference in the White House Rose Garden, US President George W Bush reiterated his support for Wolfowitz.
"I think he ought to stay. He ought to be given a fair hearing," Bush told reporters.
The controversy has prompted calls by bank staff for Wolfowitz's resignation. Staff at the forefront of implementing the bank's anti-corruption strategy last week said their work had been undermined by the crisis.
Exactly how the bank's 24-nation board will proceed was unclear, with board sources close to the decision-making process saying directors would now need to reach a resolution among themselves on how to proceed.
The directors, who approve the appointment of the head of the bank, have the authority to remove him from office.
In doing so, the sources said the board was mindful of the fact that Wolfowitz could push the matter into US courts by contending he was treated unfairly.
Wolfowitz's lawyers said in a report to the panel that he repeatedly asked to be recused from the issue, but an ethics committee told him to work with the bank's human resources manager to relocate Riza.
"The committee members did not want to implement his plan themselves, however, because they said they could not interact directly with a staff member situation," the document said.
The lawyers argued that the agreement reached with Riza was in line with other World Bank settlement deals.