Read Daniel Finkelstein on Paul Wolfowitz

The board of directors of the World Bank found today that Paul Wolfowitz, the President of the bank, had moved his girlfriend, Shaha Riza, to a new government post at a salary of nearly $200,000 without review by its ethics committee.

The revelation appears to contradict earlier statements from Mr Wolfowitz's office.

The World Bank said that the ethics committee had "informally" advised Mr Wolfowitz to relocate Ms Riza but that it had not approved her new salary and terms and conditions, which were ordered by Mr Wolfowitz.

Her new salary at the US State Department is thought to exceed even that of Condoleezza Rice, who, as Secretary of State, is the highest-ranking official in the department.

Adjourning its meeting, the board said: “The executive directors will move expeditiously to reach a conclusion on possible actions to take.

It added: “In their consideration of the matter the executive directors will focus on all relevant governance implications for the bank.”

Mr Wolfowitz apparently was booed when he attempted to address about 200 World Bank employees at headquarters in Washington yesterday.

He is said to have left after a few staff members began chanting "resign, resign" while others hissed and booed.

The board released the details of a memo that Mr Wolfowitz sent to a human resources director at the bank about Ms Riza.

It stated: "You should accept immediately her offer to be detailed to an outside insititution of her choosing while retaining Bank salary and benfits ... She has qualified for and should receive a promotion to H level at a mid-point salary level of $180,000 net income ... with annual increases which will approximate 8 per cent."

The review by the board of member countries focused on whether Mr Wolfowitz broke staff rules when he approved Ms Riza’s promotion, before she was assigned to the US State Department to resolve possible conflict-of-interest issues arising from his supervision over her work.

Mr Wolfowitz has taken full responsibility for Ms Riza’s promotion and apologised yesterday, saying that he had made a mistake in the way in which he handled the issue, but he noted that he was in “uncharted waters” and still new in his job.

“In hindsight, I wish I had trusted my original instincts and kept myself out of the negotiations," he said. "I made a mistake, for which I am sorry."

The board that said Mr Wolfowitz had revealed his relationship with Ms Riza while he was negotiating his own job contract and, at the directors’ request, sought guidance from the board’s ethics committee.

“The guidance given on an informal basis was that the employee [Ms Riza] should be relocated to a position beyond potential supervising influence,” the board said.

Mr Wolfowitz, who was nominated for the bank position in 2005 by President Bush, joined the institution from the Pentagon, where he was one of the architects of the American-led invasion of Iraq.

He has faced lingering distrust by many staff members and resentment over his close ties to the Bush Administration and his role in the Iraq conflict, which have overshadowed his first two years at the bank.

The bank’s staff representative association, which demanded last week that Mr Wolfowitz explain his actions, has called on him to resign, saying that it seemed impossible for the institution, whose mission is to fight global poverty, to move forward “with any sense of purpose under the present leadership”.

Explore Economics

• Pre-Budget Report 2009

• Budget 2009

• World Economic Forum

• The Times MPC

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive