April 26 (Bloomberg) -- World Bank employees who lead the agency's drive to battle corruption in poor nations urged ``clear and decisive actions'' to decide the future of President Paul Wolfowitz.

``We are deeply concerned by the impact of the current leadership crisis on the bank's credibility and authority,'' said the letter to Wolfowitz and the bank's board, signed by 46 employees. ``Our own governance standards must be upheld and enforced impartially and without exception,'' the letter said, ``even when they touch the highest levels of this institution.''

Wolfowitz, under investigation by the bank's board for arranging a pay increase and promotion for his companion, has rebuffed staff demands for his resignation. The controversy has undermined the Washington-based agency's ability to fight graft and promote good government, said the members of the group.

``It is a problem when your own resident experts on corruption are stating that the bank is not practicing what it preaches,'' said Manish Bapna, director of the Bank Information Center, a Washington-based group that monitors the agency.

A committee of seven bank directors representing France, Ethiopia, China, Norway, the Netherlands, Russia and Mexico, have been meeting to make recommendations on Wolfowitz's future to the full 24-member board. The directors have not provided a timeframe for their work. Wolfowitz has said he would ``accept any remedies'' proposed by the board.

In an interview today, Jorge Familiar, the director representing Mexico, said the board was ``moving forward,'' and he hoped ``the process would advance soon.''

Attorney Hired

Wolfowitz last week hired Robert Bennett, who defended former President Bill Clinton against sexual harassment charges. Bennett said the board refused to let him make a presentation when Wolfowitz appears at a hearing before directors.

Wolfowitz declined to appear before the investigating committee yesterday as requested. His attorneys sent directors a letter asking to reschedule until next week to give him time to prepare, according to a person familiar with the probe.

Three months after Wolfowitz became head of the bank in June 2005, his companion, Shaha Riza, was transferred to the State Department under rules that forbid one partner from supervising another. At the same time, she received a promotion and a 36 percent pay raise while remaining on the World Bank payroll.

Riza, 52, sent a letter to the board yesterday asking to postpone an appearance until next week, Victoria Toensing, her attorney, said in an interview today.

``We wanted a little time to prepare,'' Toensing said. ``We think that is a reasonable request.''

Support Ebbing

Support is ebbing for Wolfowitz, the former U.S. deputy defense secretary. Today, Swiss Economics Minister Doris Leuthard said Wolfowitz should keep in mind the bank's credibility.

``The situation is creating internal problems within the World Bank,'' Leuthard said at an event in Geneva, according to her spokeswoman, Evelyn Kobelt. ``Mr. Wolfowitz should consider if that is good for the credibility of the World Bank.''

The administration of U.S. President George W. Bush, who appointed Wolfowitz, has stood by him. Bush praised him yesterday at a White House event, saying: ``I appreciate very much the fact that the World Bank is taking the lead in eradicating poverty in places like Africa, and Paul Wolfowitz, thank you for your leadership of the World Bank.''

The World Bank's Governance and Anti-Corruption group, which wrote the letter to Wolfowitz today, was created more than a decade ago to devise ways to promote good government in the developing nations that receive money from the agency.

Among those who signed the letter was Daniel Kaufmann, a director of the World Bank's training division, Sanjay Pradhan, director of the public sector group, and Peter Harold, head of the operations policy department.

`Highest Standards'

``We call upon the board of executive directors and the president to take clear and decisive actions to resolve this crisis quickly in a way that demonstrates to all our stakeholders the bank's commitment to the highest standards of integrity,'' the letter said.

Wolfowitz has stepped up the bank's anti-corruption efforts, suspending aid to countries including India, Chad and Kenya on concern money might disappear into the pockets of corrupt officials. The decisions angered some board members because they were made without their approval.

He also increased the budget of the bank's Department of Institutional Integrity to $14 million from $8 million, and appointed a new director, Suzanne Rich Folsom, an ethics attorney. The department investigates allegations of malfeasance within the bank and among contractors.

In August, the bank's directors ordered a review of the integrity department after World Bank staffers complained that its tactics were heavy-handed. Former Federal Reserve Chairman Paul Volcker was picked to head the effort.

Today, Volcker said that the committee had started interviewing bank managers and announced the names of the committee's five other members. Volcker said he planned to provide a final report by Sept. 15.

The World Bank distributes about $23 billion in aid each year for projects including improvements to sanitation, railways and rural roads in low-income countries.

The controversy overshadowed the meeting of the bank's 185 member nations and prompted a group of seven board members to scratch a nine-day trip to Mongolia and the Philippines. Still, the board continues to approve loans, and today signed off on $1.3 billion for projects in India, Nigeria, Uganda, Indonesia, Haiti, and Papua New Guinea.

Wolfowitz hasn't made any public remarks since the end of the spring meetings of the World Bank and International Monetary Fund on April 15. He is scheduled to attend a conference on education next week in Brussels.

To contact the reporter on this story: William McQuillen in Washington at bmcquillen@bloomberg.net; Christopher Swann in Washington at cswann1@bloomberg.net.

Last Updated: April 26, 2007 19:49 EDT