By Karen DeYoung
Washington Post Staff Writer
Thursday, April 19, 2007

Besieged by rising calls for his resignation, World Bank President Paul D. Wolfowitz met with the institution's senior management team behind closed doors yesterday to acknowledge problems with his leadership and offer to make significant front-office changes, several knowledgeable bank sources said.

When one participant suggested that Wolfowitz's departure would resolve the problems, Wolfowitz replied that he had no plans to resign and that leaving "under the current circumstances" would not help the institution. Instead, he offered to change his management style and the "structure" of his office. Several officials interpreted that as willingness to remove or limit the authority of two senior aides, former Bush administration officials Robin Cleveland and Kevin Kellems, who have clashed with bank staff members during Wolfowitz's tenure.

Reuters last night reported that Graeme Wheeler, a bank veteran Wolfowitz selected as one of two deputies last year, had suggested he resign.

"There was a discussion in which many participated and different views were expressed," said one official who attended the meeting of vice presidents and regional managers, the first that Wolfowitz has had with them on the subject. "The president recognized problems . . . and indicated he is open to suggestions from his management team on what changes are necessary to make it better."

Asked to comment, Wolfowitz's office released a statement by Senior Vice President Marwan Muasher saying, "I feel it is inappropriate to comment on private meetings." Other sources would speak only on the condition of anonymity about internal bank deliberations.

White House spokesman Tony Fratto yesterday said, "We still have full confidence, the president has full confidence, in President Wolfowitz." The United States, as the organization' single biggest donor, traditionally appoints the World Bank head.

Wolfowitz's difficulties began shortly after President Bush appointed him in March 2005, as some of the member governments expressed discomfort with the central role then-U.S. Deputy Defense Secretary Wolfowitz had played in the unpopular Iraq war. His problems have come full circle in the past week, after disclosures that he had directed generous pay and promotions for his girlfriend, Shaha Riza, an employee who was forced by conflict-of-interest rules to leave during his presidency for a bank-paid State Department job. This week came details of Riza's work under a Pentagon subcontract -- while Wolfowitz was still at the Pentagon and she was at the bank -- to travel to Iraq as part of a "democracy and governance" program during the heady days immediately after the March 2003 invasion.

For bank managers and shareholder governments long dissatisfied with Wolfowitz's management, it was yet another reason for him to leave. For staffers outraged over what they see as his peremptory leadership and the abrasiveness of his aides, it was more cause to fire him.

"If PW goes, who would be a good candidate?" one anonymous poster on the bank's internal Internet chat room gleefully asked yesterday.

Calls for his departure reached fever pitch during the institution's annual spring meeting here last weekend, when finance ministers issued a communique expressing concern about the institution's reputation and morale. In private meetings and thinly veiled public comments, several ministers said they thought Wolfowitz should resign. Although reluctant to directly confront the U.S. administration that appointed him, they left town after making clear to the bank's board of directors that they wanted the problem resolved.

The first board meeting since the weekend is scheduled for today.

Riza was one of a number of "subject matter experts" hired under Pentagon contracts to advise the Iraqis after the invasion. Her name was on a list supplied by the office of Douglas J. Feith, then Pentagon undersecretary for policy under Wolfowitz, to the main contract-holder, Science Applications International Corp. (SAIC). In April, Riza took a leave of absence from her job in the bank's Mideast department to work with Iraqi women as a SAIC subcontractor.

Her contract was one of seven awarded to SAIC when Pentagon leaders believed that it would be a simple matter to overthrow Iraqi leader Saddam Hussein, set up a new government and leave. Other contracts called for SAIC to establish a media network in Iraq and to advise the oil industry. The contracts were later criticized by the department's inspector general for a lack of competitive bidding, poor results and no oversight.

Both SAIC and Riza -- a British citizen with degrees from the London School of Economics and Oxford University who has worked on gender and civil society issues -- have said she received no salary and only expense reimbursements for her several weeks in Iraq. It is unclear from the contract whether Riza was compensated.

Riza's lawyer, Victoria Toensing, said Tuesday that her client "did get permission from the bank, through her supervisor" to undertake the Iraq mission, which according to SAIC lasted from April 25 to May 31, 2003. But Riza's bank supervisor at the time, former Mideast director Jean-Louis Sarbib, said in an interview that "there was no request, as far as I know" to obtain a waiver of bank rules barring such activity.

He said Riza had simply requested a leave of absence to visit Iraq. "If I had known that not only was she going to work for another government, but it was a DOD contract, I don't think you need very much imagination to say this would have raised all sorts of red lights," Sarbib said.

Upon her return, Riza briefed the bank board at its request about the situation in Iraq but did not mention her Pentagon contract, he said.

Riza's role in the SAIC effort -- although not her relationship with Wolfowitz -- was initially reported by the Washington-based Center for Public Integrity in October 2003, which published it as part of a critical analysis of the secrecy surrounding SAIC's Iraq contracts with the Pentagon. Feith's top deputy at the time was Ryan Henry, a former SAIC vice president.

Staff writers Krissah Williams and Al Kamen contributed to this report.