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Wolfie’s Last Stand

Paul Wolfowitz and the World Bank are groping toward  an agreement in which Wolfowitz will step down as president and the bank will say something Wolfowitz doesn’t find too hurtful about his ethical breach in negotiating the large salary increase received by his companion, Shaha Riza, when the bank relocated her to the State Department. The document that appears below and on the following seven pages is from Wolfowitz’s 25-page response to an ad-hoc investigating committee’s findings that Wolfowitz broke the bank’s rules.

It goes without saying that when the boss decides the pay package for his inamorata, his private interests must wrestle with those of the organization. If such a situation doesn’t represent a conflict of interest, then the phrase has no meaning. But did Wolfowitz violate bank rules? Wolfowitz maintains, quite rightly, that the whole ungodly mess came about because the bank’s ethics committee wouldn’t accept his request to: 1) allow Riza to stay at the World Bank after he became president; and 2) resolve the conflict by recusing him from all decisions affecting the terms of her employment. Not good enough, the ethics committee said. The rules dictated that Riza had to be relocated elsewhere.

Wolfowitz’s disagreement with the bank turns on what happened next, and specifically on how one interprets the word instruct. The ethics committee chairman, Ad Melkert, told Wolfowitz to “instruct” the vice president of human resources, Xavier Coll, to work out the details of Riza’s relocation. The bank maintains that this meant Wolfowitz should turn the whole matter over to Coll and be done with it. Wolfowitz maintains that this meant Coll should follow his, Wolfowitz’s, instructions. Otherwise, Wolfowitz argues, Melkert would have used the word delegate. (See Page 3.) Wolfowitz also stresses that “Ms. Riza did not get every term and condition that she wanted,” just in case you were in doubt about who wears the pants in the Wolfowitz household. (See Page 5.) Continuing this theme, Wolfowitz says the real reason the ethics committee was unwilling to work out the details itself was that

its members did not want to deal directly with a very angry Ms. Riza. … It would only be human nature for them to want to steer clear of her, and Mr. Melkert no doubt felt that, due to my personal relationship with Ms. Riza, I was in the best position to persuade her. …

Another point of contention is whether Wolfowitz made a secret of his agreement with Ms. Riza once it was reached. Wolfowitz is somewhat contradictory on this point. On the one hand, “I never told anyone to hide the final agreement … from the Ethics committee or others with legitimate oversight responsibilities.” On the other, “I did take steps to ensure that the negotiations were confidential … [and] to try to stem leaks to the press.” (See Page 6.)

Wolfowitz says he believed at the time that the ethics committee had reviewed the pay agreement, because he received a memo stating in vague language that the resolution of the conflict was “consistent with the committee’s findings and advice.” (See Page 7.) What Wolfowitz never explains is why he didn’t make it his business to have the relevant person or persons review the pay agreement and to submit, in writing, explicit approval, so that no one could accuse him of sneaking around. The World Bank was hardly Wolfowitz’s introduction to the workings of large, treacherous bureaucracies that operate in the public eye. More broadly, why did Wolfowitz ever let himself be put in the position of negotiating compensation for his main squeeze? There was no law that said he had to take the job, if it came to that. And passing it up would certainly have been preferable to the public humiliation of losing it, as he almost certainly will now.

To read Wolfowitz’s full 25-page submission, click here.

Thanks to Congressional Quarterly for posting the document.

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