Wolfowitz defends conduct over World Bank lover row

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Published: Monday April 9, 2007

World Bank president Paul Wolfowitz, under fire for massive pay raises given by the powerful development organization to his girlfriend, insisted Monday he had always upheld staffing rules.

In an extraordinary statement to staff that did not mention the name of his Libyan-born partner, Shaha Riza, Wolfowitz accepted "full responsibility" over the case but said he had "acted on the advice" of the bank's ethics committee.

Heading into an annual World Bank meeting, the Riza row has stoked criticism of the former Pentagon deputy chief's management style as he steers through a controversial campaign against corruption.

"I would like to assure the staff that I have always acted to uphold these rules to the best of my ability, and I will continue to do so," Wolfowitz said in his statement to the World Bank's 10,000 employees.

"As president of this institution, I accept full responsibility for the actions taken in this case," he said. On Thursday the bank's board of governors, who are appointed by national governments, ordered an investigation into a "possible violation of staff rules in favor of a staff member closely associated with the president."

"I have already indicated to the board my intention to cooperate fully in their review of the details of the case," stressed Wolfowitz, who separated from his wife in 2001.

"What remains of the utmost importance to me is the protection of the interests of this institution as a whole, and our need to remain focused on our agenda of helping the world's poor."

A circular last Tuesday from the World Bank's internal staff association said it had been "inundated with messages from staff expressing concern, dismay and outrage" over the Riza case.

She was pulled off her job as a communications officer at the World Bank and seconded to the US State Department in September 2005, shortly after Wolfowitz took over at the lender's helm.

The move was reportedly made over Wolfowitz's objections at the insistence of the board of governors, to abide by bank rules that forbid members of staff who are romantically linked from working under each other.

Riza was then rapidly promoted and ended up earning nearly 200,000 dollars at the State Department, more than Secretary of State Condoleezza Rice herself, sparking the internal fury.

Staff have highlighted apparent discrepancies between accounts of her employment given by Wolfowitz and members of the World Bank's board and ethics committee.

According to the Washington-based Government Accountability Project (GAP), neither the committee nor the board approved Riza's hefty pay hikes as claimed by Wolfowitz's office.

The row risks undermining Wolfowitz at a time when he is leading his campaign to clean up corruption in the World Bank's multibillion-dollar lending.

The drive will again be under the spotlight when the bank, in conjunction with the International Monetary Fund, holds its spring meeting this weekend.

"It's ironic that Mr. Wolfowitz lectures developing countries about good governance and fighting corruption, while winking at an irregular promotion and overly generous pay increases to a partner," said Bea Edwards, the GAP's international director.

Wolfowitz has also ruffled feathers among staffers by appointing Republican allies to key World Bank positions, including in charge of its anti-corruption unit.

The March issue of Vanity Fair, meanwhile, said that Riza served as a consultant to military contractor SAIC while a World Bank employee in the run-up to the 2003 Iraq invasion, which Wolfowitz helped engineer.