One of two key aides to World Bank President Paul Wolfowitz resigned on Monday, saying he could no longer effectively help advance the mission of the institution under the current leadership crisis.
The news follows a report from Reuters that a World Bank panel has presented Wolfowitz with its findings into his handling of a promotion and pay raise for his companion. The report attributed the information to unnamed sources on the board.
Earlier, the New York Times said the committee found that Wolfowitz had violated bank rules barring conflicts of interest.
The aide who stepped down from his post at the bank was Kevin Kellems, who was an advisor to Wolfowitz since 2002 at the Pentagon and throughout the planning of the Iraq war. Kellems told Reuters he was leaving "for other opportunities."
"Given the current environment surrounding the leadership of the World Bank Group, it is very difficult to be effective in helping to advance the mission of the institution," Kellems said.
Meanwhile, the special committee, which is made up of seven of the 24 members of the bank's board, had planned to give its findings to Wolfowitz to allow him to prepare for a rebuttal this week.
The World Bank has never fired its president in its more than 60-year history.
Sources told Reuters on Monday that the panel's report would be submitted to directors of the bank's board on Tuesday, with a meeting to discuss Wolfowitz's future later in the week.
The bank's board of shareholder nations will need to decide whether Wolfowitz will be forced out or given the chance to negotiate his departure, board sources told the New York Times.
According to the sources who spoke to the Times, it is virtually impossible for Wolfowitz to stay on as president for the rest of his term because of the damage to the bank's credibility and its ability to be effective in its mission to reduce global poverty.
Controversy surrounding Wolfowitz's role in a lucrative promotion for his companion, World Bank Middle East expert Shaha Riza, has paralyzed the institution for more than a month.
The bank's employee association said the promotion and raise received by Riza broke staff rules and showed an abuse of power by Wolfowitz, a former deputy U.S. defense secretary who was a key architect of the U.S. invasion of Iraq.
Wolfowitz responded that he was the victim of a smear campaign designed to discredit his leadership of the institution and undermine his campaign to position the bank at the forefront of fighting corruption in developing countries.
There are no rules to determine the dismissal of a World Bank chief because it never has happened before. The bank board has the authority to appoint and to fire the president, who is traditionally nominated by the U.S. A decision could be made by consensus or determined by a simple majority vote of 51%. The U.S. holds around 16%.