It's official, Paul Wolfowitz is gone, or at least he will be by the end of June. The bank has accepted his resignation and added that he acted "ethically and in good faith." Whatever.
Let's take a look at where Wolfowitz screwed up. It was when he took the job. If you are offered a job where your girlfriend is going to have to report to you, there are only three things you can do. You either pass on the job, or you make the board reassign her before you come on to the payroll, or she quits. That's it, period. There is no other ethical way to handle the situation.
Wolfowitz went another way and it came back to haunt him. For that reason alone, he is entirely to blame for what happened to him.