White House: Options Open on Wolfowitz

World Bank President Paul Wolfowitz departs his home in Chevy Chase, Md., Tuesday, May 15, 2007. Wolfowitz is tangled in an ethics controversy over securing a promotion and pay raise for his girlfriend after she was assigned duties outside the bank to avoid a conflict of interest. (AP Photo/J. Scott Applewhite) (J. Scott Applewhite - AP)

WASHINGTON -- The White House, shifting its stance, said Tuesday that "all options are on the table" about who should lead the World Bank, even as it defended embattled President Paul Wolfowitz.

Wolfowitz, who is accused by a special bank panel of breaking conflict-of-interest rules, maintains that he acted in good faith in arranging a generous pay package for his girlfriend. He waged a vigorous fight to keep running the institution, defending himself before the board in an appearance late Tuesday.

"You still have the opportunity to avoid long-term damage by resolving this matter in a fair and equitable way that recognizes that we all tried to do the right thing, however imperfectly we went about it," Wolfowitz told the board.

The board, which met behind closed doors, ultimately will decide what actions to take against him. The board said it will meet again Wednesday to continue its deliberations.

"We have faith in Paul Wolfowitz," White House spokesman Tony Snow said. He insisted that the charges against Wolfowitz are not "a firing offense."

Only after the charges against Wolfowitz are resolved, he said, would it then be appropriate to consider the bank's leadership going forward.

"Separately, at some point in the future there are going to be conversations about the proper stewardship of the World Bank," Snow said. "In that sense ... all options are on the table."

It was the first time that the White House indicated that it might be open to Wolfowitz's departure. The overture could be viewed as an attempt to calm European allies who are clamoring for him to step aside.

Promising future conversations, and separating them from the process of determining Wolfowitz's fate based upon the pay package issue, could give those speaking against Wolfowitz the sense that their concerns will be addressed at some point.

Snow's comments came a day after a special bank panel concluded that Wolfowitz broke bank rules in his handling of the pay package. It said the board must consider whether Wolfowitz "will be able to provide the leadership" to ensure that the bank achieves its mission of fighting poverty around the world.

Wolfowitz told the board that his handling of the Riza matter "does not justify taking any action against me or warrant a finding that you lack confidence in my leadership."

A conference call _ convened by the United States _ among officials from the world's seven most industrialized countries failed to produce a consensus on the White House's call for the Wolfowitz conflict of issue charge to be handled separately from the bank's future leadership. Only Japan backed the United States. The other countries on the call were Canada, Italy, France, Germany and Britain.