A former communications director and spokesman for Vice President Dick Cheney, Kellems became Wolfowitz's senior adviser as well as director of strategy in external affairs at the bank, acting as the president's sounding board at the multinational agency. But from the beginning, Kellems, together with former senior White House official Robin Cleveland, have been controversial figures within the bank, as many career staffers feared the pair would have a disproportionately strong influence over the president, in addition to being too close to the Bush administration.

Kellems' resignation comes on the day that a bank panel found Wolfowitz breaking bank rules, but it has so far not made clear what steps should be taken against him. The 24-member board representing the agency's 185 member countries is expected to meet later this week to discuss the matter further.

The situation had turned for the worse in recent weeks as last month Wolfowitz admitted that he had been instrumental in securing his girlfriend and fellow bank employee, Shaha Riza, a $60,000 pay raise as compensation for being farmed out to the U.S. State Department in order to avoid a conflict of interest between the two. The pay raise, however, far exceeded that acceptable by normal bank standards and brought Riza's financial package to nearly $200,000.

Yet while pressure for Wolfowitz to resign has been mounting, both from staff members and from the bank's member countries, the man who played a key role in the U.S.-led invasion of Iraq in 2003 has made it clear he plans to fight to stay on as the head of the world's biggest development bank.

For his part, however, Kellems stated that "given the 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."

According to some bank officials, though, Kellems did have a positive impact on the bank's work. Marwan Muasher, senior vice president of external affairs and former Jordanian deputy prime minister, said Kellems made the bank's communications strategy stronger and "helped mobilize support for the multilateral debt relief initiative and worked to underscore the development stakes in international trade."

Meanwhile, rumors abound that Cleveland, a former national security specialist at the U.S. Office of Management and Budget, will have no choice but to leave her post as Wolfowitz's chief adviser, given that she is the most powerful among the Bush administration officials that the president brought along upon his appointment. Others whose jobs may be on the line include Suzanne Rich Folsom, an attorney who specializes in ethics issues who, granted, had been at the bank before Wolfowitz's arrival, but is an unabashed Republican with close ties to the Bush family. Wolfowitz has come to rely on her heavily, particularly regarding his anti-corruption campaign worldwide. Folsom currently heads the bank's department of institutional integrity.

The controversy surrounding Wolfowitz has led many European member countries in particular to press for a review of how the bank president is actually appointed. The United States remains the bank's single largest shareholder, and its head has until now always gone to a U.S. national backed up by the president, while the head of its sister organization, the International Monetary Fund, has been a European.

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