Wolfowitz resignation talks reported
Sources say World Bank chief would step down while bank would take some blame in handling of girlfriend's transfer to State Department.
WASHINGTON (CNN) -- Embattled World Bank President Paul Wolfowitz and the White House were in talks Wednesday afternoon with World Bank officials to work out details of his resignation, senior administration officials told CNN.
In a statement released Wednesday evening, the bank's executive directors said that their "deliberations" would continue Thursday morning.
Under a proposed agreement, Wolfowitz would leave voluntarily, but the World Bank would admit some culpability in the handling of his girlfriend's transfer to a State Department job, along with a hefty pay increase.
Administration officials told CNN that they expect Wolfowitz to leave "soon," if not today.
Reached at his office Wolfowitz's lawyer, Bob Bennett, said it would be "premature" to say Wolfowitz is about to leave but would not comment any further. In the past, Bennett has said that Wolfowitz would not resign "under a cloud."
The White House has concluded that Wolfowitz cannot serve anymore, administration sources familiar with the discussions told CNN's Ed Henry.
One holdup has been resistance by Vice President Dick Cheney, who continues to support the World Bank president. But the sources said support for Wolfowitz is dropping at the White House, and many in the administration don't think he can overcome this ongoing scandal.
"I don't see how he recovers from this," one source familiar with the negotiations said of Wolfowitz.
A senior administration official said the situation looked grim, and Bush officials want Wolfowitz to go.
"We want it over, one way or the other," said the official, who added that the White House was merely reacting to the "reality" of Wolfowitz's shriveling support on the bank board. "If you can't win, you can't win."
Wolfowitz was supposed to travel to Slovenia Wednesday night on World Bank business, but a World Bank official told CNN that the trip is on hold.
Wolfowitz has been the World Bank president since June 2005 on the heels of his work at the Pentagon, where he occupied the No. 2 civilian position during the planning and first years of the Iraq war.
Wolfowitz, a leading neoconservative, was elected unanimously by the 24- member board, although European member countries reportedly fumed in private over the Bush administration's choice for the job.
The World Bank is traditionally headed by an American who enjoys the support of European members of the board.
Soon after he began serving as president, media reports began to document his relationship with Shaha Riza, the World Bank's senior communications officer for the Middle East and North Africa office, which was said to have begun in 1999.
On Wednesday morning, White House Press Secretary Tony Snow reiterated the administration's support for Wolfowitz, saying that the World Bank committee's findings were not grounds for dismissal.
The committee ruled that the salary increase he gave Riza exceeded the World Bank's guidelines and that Wolfowitz did not avoid conflicts of interest.
Wolfowitz replied Tuesday that the decision was "unbalanced and flawed," arguing that materials supporting his position had been omitted from the decision.
The World Bank panel referred the final decision to the bank's board of shareholder governments, which represents 24 nations.
Before working for the Bush administration, Wolfowitz had worked for George H. W. Bush's administration as undersecretary of defense for policy from 1989 to 1993.
From 1986 to 1989 he was U.S. ambassador to Indonesia.
Wolfowitz began working for the government in defense policy research in the early 1970s, when he served at the Arms Control and Disarmament Agency.