Wolfowitz adviser plans to resign due to 'poor working atmosphere'

A top adviser to World Bank President Paul Wolfowitz is leaving the institution, citing the continuing controversy surrounding Wolfowitz' handling of a pay package for his girlfriend.

"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. Therefore, I have decided to leave for other opportunities," Kevin Kellems told The Associated Press yesterday.

Wolfowitz had tapped Kellems, who came from the White House and worked with him previously at the Defense Department, to become his adviser at the poverty-fighting institution. Kellems' arrival in June 2005 eventually touched off criticism among staff that Wolfowitz was sealing himself off with a small cadre of trusted advisers.

A special bank panel looking into Wolfowitz' handling of the 2005 promotion and pay raises for bank employee Shaha Riza is also believed to be examining other employment arrangements, including the one involving Kellems.

The controversy over Riza in particular has spurred calls for Wolfowitz' resignation. He is fighting to hold onto his job.

Kellems and another close Wolfowitz adviser, Robin Cleveland, each are paid more than $200,000 a year - compensation that has irked some bank staff. Critics say they lacked extensive development experience.

Kellems' last day is expected to be next week. He did not say what he will do after leaving the bank.

Among the things the special panel is looking at is whether Wolfowitz violated bank rules, including conflict-of-interest rules, in getting involved in Riza's promotion and compensation package. The panel, at various points in the process, has been leaning toward citing Wolfowitz for ethical breaches.

The bank's 24-member board will decide what action should be taken, if any. A decision is expected soon.

A range of disciplinary options has been discussed. The board could fire Wolfowitz, ask him to resign, signal that it lacks confidence in his leadership, reprimand him or take no action. Some believed that prospects were fading for a compromise under which Wolfowitz would avoid a harsh reprimand but would resign anyway.

Wolfowitz has maintained that he acted in good faith in arranging Riza's pay package and has accused his critics of launching a "smear campaign" against him.

The bank's executive directors, however, have said the terms and conditions of the package had not been "commented on, reviewed or approved" by the bank's ethics committee, its chairman or the bank's board.

"Kevin Kellems was the individual who originally told the media that the World Bank board of directors was responsible for Shaha Riza's raises, which is simply not true," said Dylan Blaylock, spokesman for the Government Accountability Project, a watchdog group. "Kevin Kellems' resignation is a sign of more to come," he predicted.

Riza worked for the bank before Wolfowitz took over. She was moved to the State Department to avoid a conflict of interest but stayed on the bank's payroll. Her salary went from close to $133,000 to $180,000. With subsequent raises, it eventually rose to $193,590.

Before he took over the bank in the summer of 2005, Wolfowitz was the No. 2 official at the Pentagon. He helped map the US-led war in Iraq.