World Bank’s Wolfowitz Decries ‘Smear Campaign’

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The New York Sun

WASHINGTON — World Bank President Paul Wolfowitz decried what he called a “smear campaign” against him yesterday and told a bank panel he had acted in good faith in securing a promotion and pay raise for his girlfriend. He said had no plans to resign, and President Bush gave him a fresh endorsement.

In a statement prepared for the panel, Mr. Wolfowitz said the institution’s ethics committee had access to all the details surrounding the arrangement involving bank employee Shaha Riza, “if they wanted it.”

Mr. Wolfowitz told the panel, “I acted transparently, sought and received guidance from the bank’s ethics committee and conducted myself in good faith in accordance with that guidance.”

The special bank panel is investigating Mr. Wolfowitz’ handling of the 2005 promotion of bank employee Ms. Riza, who was to appear later in the day.

The controversy has led to calls for the resignation of Mr. Wolfowitz, who was an architect of the Iraq war in his previous job at the Pentagon. The bank’s 24-member board is expected to make a decision this week. President Bush, meanwhile, said Mr. Wolfowitz “ought to stay. He ought to be given a fair hearing.”

Mr. Wolfowitz contended that the controversy over the pay package was part of an effort to oust him from the office, which he has held for nearly two years. The institution’s mission is to fight global poverty.

“The goal of this smear campaign, I believe, is to create a self-fulfilling prophecy that I am an ineffective leader and must step down for that reason alone, even if the ethics charges are unwarranted,” Mr. Wolfowitz said. “I will not resign in the face of a plainly bogus charge of conflict of interest,” he said.

Mr. Bush said Mr. Wolfowitz’s fate did not come up during a U.S.-European Union meeting at the White House. The European Parliament has called on Mr. Wolfowitz to resign.

As part of his defense, Mr. Wolfowitz, among other things, cited a February 28, 2006, letter that he characterized as showing that bank’s ethics committee had looked at the arrangement.

The panel’s chairman, Ad Melkert, said in the letter that an allegation relating to “a matter which had been previously considered by the committee did not contain new information warranting any further review.”

The letter didn’t specifically mention Mr. Wolfowitz or Ms. Riza by name. However, Mr. Wolfowitz pointed to it as proof that ethics officials were aware of Ms. Riza’s compensation package.

The bank’s executive directors, however, have said the terms and conditions of the package had not been “commented on, reviewed or approved” by the ethics committee, Mr. Melkert or the bank’s board. Mr. Melkert, who has since moved on to a post at the United Nations, echoed the executive directors’ assessment and disputed Mr. Wolfowitz’s characterization of the matter.

“The ethics committee was not consulted, nor did it approve, the specific terms and conditions … including the large initial pay increase, the stipulation for subsequent annual increases and the stipulations for subsequent promotions,” Mr. Melkert said in a statement.

Mr. Melkert’s February 2006 letter informed Mr. Wolfowitz that the ethics committee had reviewed two e-mails from an anonymous whistleblower alleging ethical lapses by the World Bank’s president. One e-mail complained about the size of Ms. Riza’s pay raise.

Ms. Riza was working at the bank when Mr. Wolfowitz arrived in 2005 and had earned close to $133,000 a year as a communications adviser in the bank’s Middle East department. She was reassigned at the State Department to avoid a conflict of interest but remained on the bank’s payroll. Her pay then rose to $180,000 and eventually to $193,590.

Mr. Wolfowitz said the initial $180,000 she received “was in line with salaries paid to bank employees” holding similar H level positions. He said the salary “seemed reasonable to me” and noted that “many World Bank employees are, comparatively speaking, generously paid, and hundreds of them earn more than the U.S. secretary of state.”

He denied accusations that he sought to hide details of Ms. Riza’s pay package.

“I always expected that the ethics committee could know the details of how the matter was resolved if they so desired,” Mr. Wolfowitz said. “I also understood that experts in the human resources department would review the contract. It never occurred to me that they would not, and I believe that they did.”


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