Wolfowitz hangs on; U.S. tries to ease exit

WASHINGTON — The Bush administration spent much of Wednesday trying to broker a graceful end to the ethics controversy consuming the World Bank, offering the resignation of embattled president Paul Wolfowitz, senior administration and bank officials said. But Wolfowitz said he would not leave, insisting on a measure of vindication.

On a day full of rumors, counter-rumors and closed-door meetings, the Wolfowitz saga turned into an only-in-Washington standoff.

The bank's executive board — under pressure from governments worldwide to remove Wolfowitz in response to findings that he engineered and covered up a hefty raise for his girlfriend — appeared intent on forcing him out without voting to fire him. The board adjourned without resolution late Wednesday, promising to keep talking today.

The Bush administration, navigating the currents of international diplomacy, remained sympathetic to Wolfowitz's plight but has appeared less willing by the day to spend political capital on him. Officials were eager to wrap up the unpleasantries and move on.

But Wolfowitz, who has clung tenaciously to his post through weeks of controversy, stuck to his position that he tried to do the right thing in handling his girlfriend's career situation. "Mr. Wolfowitz will not leave under a cloud," his attorney, Robert Bennett, said Thursday.

Seeking to break the logjam, the Bush administration pressed a compromise: The board could issue a statement that Wolfowitz had erred in handling the raise for his longtime companion, Shaha Riza, but apportion some of the blame to a bank committee that Wolfowitz believes gave him murky ethics advice. Wolfowitz then would resign, said senior bank and administration officials, who requested anonymity because of the sensitivity of the talks.

The Bush administration's decision to negotiate an end to Wolfowitz's tenure came in recent days, as it became clear the White House is virtually alone in supporting him.