Bush urged to resolve World Bank crisis

By Lesley Wroughton

WASHINGTON (Reuters) - Senior U.S. Democrats urged President George W. Bush to step in to resolve the "historic crisis" over Paul Wolfowitz's leadership at the World Bank as the bank's divided membership prepared to decide his fate.

In a letter to Bush, Harry Reid, the Senate Majority leader, Patty Murray, Richard Durbin and Charles Schumer expressed "grave concern" over the crisis, sparked by a pay and promotion deal by Wolfowitz for his companion in 2005.

"We urge you to take decisive action quickly to bring this crisis to a close," the senators told Bush.

They questioned the manner in which the crisis was handled, saying it had seriously jeopardised the United States' dominant role as the World bank's largest shareholder.

"We urge you to find a timely resolution that ensures the bank's current leadership crisis will not interfere with the bank's effectiveness ... and preserves the important and historical role of the United States in selecting the president of the bank," the senators wrote.

The letter came as the World Bank's 24-nation board, led by Germany, is set to meet on Friday to decide on Wolfowitz's future at the bank. There are no rules for the dismissal of a World Bank chief because it has never happened in the bank's 62-year history.

The institution has been paralysed by the controversy for more than a month after leaked documents showed Wolfowitz approved a high-paying promotion for his companion, Shaha Riza, a bank Middle East expert, unleashing widespread anger among bank staff and prompting an investigation.

The board is divided over its support for the former U.S. deputy defence secretary, whose two years at the bank has been dogged by his prominent role in the planning of the Iraq war.