WASHINGTON (Bloomberg) — The Bush administration repeated its support for World Bank president Paul Wolfowitz as the agency’s board met to discuss his future after he acknowledged arranging a pay raise for his partner.“The president has confidence in Paul Wolfowitz,” White House Deputy Press Secretary Dana Perino told reporters aboard Air Force One on the way to Tipp City, Ohio, where President George W. Bush planned to give a speech on terrorism. “What the president has said is that Paul Wolfowitz apologised, and to let the board do its work.”

World Bank directors convened in Washington today after finding that Wolfowitz personally dictated the terms of a pay increase and promotion for Shaha Riza, 52. Wolfowitz, 63, last week rejected staff demands for his resignation, while a panel representing governments that fund the agency said the situation was of “great concern.”

Wolfowitz, the former US deputy defence secretary, this morning cancelled a scheduled speech on health care in developing countries. The bank’s Staff Association, which represents 13,000 employees, handed out blue ribbons that symbolise its call for Wolfowitz to quit.

The World Bank’s 24-member executive board on April 13 promised to “move expeditiously to reach a conclusion on possible actions to take”. Perino today repeated that the White House would “let that process take place.”

France, Germany and the UK, among the largest shareholders, have declined to back Wolfowitz, leaving him dependent on the support of the Bush administration, which nominated Wolfowitz and is the largest donor. Henry Paulson praised him on April 13 as a “very dedicated public servant”.

Three months after assuming the World Bank presidency in June 2005, Wolfowitz sent Riza on assignment to the State Department to comply with rules forbidding one partner from reporting to another. Riza, who stayed on the bank payroll, got a promotion and a 36-percent pay increase that was twice as large as allowed by bank rules, according to the Staff Association, which represents employees.

The following year, Riza, a UK citizen who was born in Libya, received a 7.5 percent raise, bringing her salary to $193,590, more than is earned by Secretary of State Condoleezza Rice. Her agreement with the World Bank guaranteed her an annual raise of about 8 percent. As a non-U.S. citizen, she doesn’t pay personal income tax.

Riza was a Washington-based senior communications officer in the World Bank’s Middle East and North Africa department. At the State Department, she was assigned to the Bureau of Near Eastern Affairs to help set up a foundation to support democracy in the region. She later transferred to the group, called the Foundation for the Future.

Wolfowitz, who is divorced, last week apologised and said his decision was a good-faith effort to carry out recommendations of the board’s ethics committee. He appealed for understanding of a “painful personal dilemma”.

The probe of Riza’s promotion overshadowed the semi-annual meetings of the World Bank and the International Monetary Fund in Washington, which ended on April 15.

The World Bank and the IMF were founded in 1944 as the eventual victors of World War II planned for the postwar economic order. The bank, created to help rebuild Europe, has since changed its mission to fighting poverty. It lends about $23 billion a year.

Online futures traders are betting there’s a 20 percent chance Wolfowitz will resign by the end of this month, according to Intrade, an electronic exchange based in Dublin. The odds for him to resign by the end of June are 40 percent.