Former World Bank Ethics Chief Contradicts Wolfowitz

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The World Bank’s president, Paul Wolfowitz, was contradicted by the former head of the agency’s ethics committee, who said he wasn’t told of the details of the pay-and-promotion package for Mr. Wolfowitz’s companion.

“The ethics committee was not consulted, nor did it approve, the terms and conditions” of the 2005 deal to send Shaha Riza to the State Department, which included an unusually large raise and guarantees of further increases, Ad Melkert, the former chairman, said in a statement to a panel investigating the matter.

Mr. Melkert was among the final witnesses interviewed by the panel, which will next prepare a report for the full 24-member board. A statement from the board late Tuesday in Washington said directors remain “very concerned” about the controversy and promised the “earliest possible resolution.”

Mr. Wolfowitz, 63, faces rising calls for his resignation from donors, staff, and aid agencies, who argue that his missteps have crippled the poverty-fighting agency’s credibility. Senator Baucus of Montana, chairman of the Senate Finance Committee, yesterday called on Mr. Wolfowitz to step down.

“It would be my hope” that Mr. Wolfowitz “finds a graceful way to no longer be president of the bank,” Mr. Baucus told reporters in his home state. Senator Durbin of Illinois, the no. 2 Senate Democratic leader, said “There is a serious question about whether he can be an effective leader at this point.”

Mr. Wolfowitz this week refused to quit and complained he was the victim of a “smear” campaign. Appearing in Brussels yesterday for an education conference, Mr. Wolfowitz said the investigation must “follow due process.”

“But in the meantime we need to stay focused on the very important work of the bank,” Mr. Wolfowitz said at a press conference at the European Commission. “There are millions of poor people around the world who depend on us.”

Mr. Melkert’s assertions rebut Mr. Wolfowitz’s argument that he was only carrying out the instructions of the ethics committee when he arranged the deal for Ms. Riza. Mr. Wolfowitz this week told directors that the ethics committee had two occasions to review details of the agreement.

Three months after Mr. Wolfowitz arrived at the bank in June 2005, Ms. Riza was transferred to the State Department in compliance with rules forbidding one partner from supervising another. She remained on the World Bank payroll.

Mr. Melkert said yesterday that the ethics committee only told Mr. Wolfowitz to transfer Ms. Riza beyond his “supervising influence,” and it recommended giving her a promotion to make up for the disruption to her career. The committee assumed Mr. Wolfowitz would follow bank rules in carrying out those directions, said Mr. Melkert, who is now associate administrator at the U.N. Development Program.

Mr. Wolfowitz then told the bank’s human resources director to give Ms. Riza a promotion and lift her annual salary by 36% to $180,000, with further guaranteed increases of about 8% a year, according to documents released by the board. The initial raise was twice as large as bank rules allow, according to the Staff Association, which represents 13,000 employees and has demanded that Mr. Wolfowitz resign.

After her first annual raise, Ms. Riza earned $193,590 in her State Department job, free of income taxes. At the end of Mr. Wolfowitz’s five-year term, she was to be offered a promotion to the level of director, according to the documents.

“Mr. Wolfowitz believes that he acted in good faith in an awkward situation,” his lawyer, Robert Bennett, said in an interview Tuesday. “I’m troubled Mr. Melkert is not acknowledging his responsibility in this matter.”

Mr. Melkert’s comments echo those of Roberto Danino, the former World Bank chief counsel, who gave the board’s investigating committee a statement two days ago.

Mr. Danino said Mr. Wolfowitz “acted incorrectly” when he approved the package for Ms. Riza, 52, who was working at the bank as a communications officer in the Middle East and North Africa department at the time.

Mr. Danino also disputed Mr. Wolfowitz’s account of his offer to recuse himself from dealings with Ms. Riza should she stay at the group. Because the offer didn’t preclude maintaining “professional contact,” the board “correctly” rejected it, Mr. Danino said.


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