Wolfowitz to quit as World Bank Chief

Embattled World Bank president Paul Wolfowitz will resign at the end of June, the bank board announced tonight.

The former Pentagon number two’s leadership was undermined by the generous compensation package he arranged for his girlfriend, a bank employee.

Wolfowitz’s departure ends a two-year run at the development bank that was marked by controversy from the start, given his previous role as a major architect of the Iraq war.

"He assured us that he acted ethically and in good faith in what he believed were the best interests of the institution and we accept that," the board said in its announcement.

His departure was all but forced, however, by the finding of a special bank panel that he broke conflict-of-interest rules in his handling of the 2005 pay package of Shaha Riza.

The board said it was clear that a number of people had erred in reviewing the pay package.

Wolfowitz, who had fought pressure to resign for weeks, said in a statement that he was pleased that the board ``accepted my assurance that I acted ethically and in good faith in what I believed were the best interests of the institution, including protecting the rights of a valued staff member''.

Now, he said, it was in the best interest of the board that its mission "be carried forward under new leadership".