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POLITICS
New Questions Emerge About Wolfowitz's Influence
By Emad Mekay
WASHINGTON, Apr 9, 2007 (IPS) - The nepotism controversy besetting World Bank
President Paul Wolfowitz and his long-time partner and colleague Shaha
Riza heightened Monday with new revelations that Riza may have had a
history of flouting Bank rules while financially benefiting from jobs
associated with Wolfowitz's former post at the Pentagon.
In his first public statements on the matter, Wolfowitz said he took full
responsibility for decisions taken regarding Riza, but denied any
wrongdoing.
According to the Government Accountability Project (GAP), a whistleblower
protection group that helped break the story, inside Bank sources familiar
with the details of the case have now verified that in addition to
receiving two large pay raises in recent years, Riza never applied for nor
received permission to work for SAIC, a major U.S. defence contractor,
while Wolfowitz was the deputy secretary of defence.
In its March issue, Vanity Fair reported that Riza was earning paycheques
as an expert on the Middle East from SAIC when the company was providing
intelligence services to the Pentagon prior to the Mar. 19, 2003 U.S.
invasion of Iraq.
"This is a gross violation of World Bank staff rules, which require Bank
employees to clear extracurricular professional activities with the
Outside Interests Committee in order to prevent conflicts of interest,"
GAP said in a press release.
Such "undisclosed parallel employment" is usually grounds for
dismissal from the Bank, but it does raise serious concerns of conflicts
of interest, GAP said.
"Considering that Riza was reportedly romantically involved with Wolfowitz
at the time, that the Iraq war was imminent, that SAIC was a defence
contractor, and that the World Bank had active projects in Iraq, multiple
conflicts of interest probably existed," said GAP International Program
Director Bea Edwards.
The disclosure comes only days after news surfaced that Riza had received
two unprecedented pay raises since Wolfowitz came to office, provoking
some Bank staff to express disappointment at the apparent display of
favouritism in an institution that professes integrity and good
governance.
In his statement, Wolfowitz said that he made the decision to transfer
Riza to an external assignment at the U.S. State Department only after
consulting with the Board's Ethics Committee.
"As president of this institution, I accept full responsibility for the
actions taken in this case," he said in the statement addressed to the
Bank staff. "I have already indicated to the board my intention to
cooperate fully in their review of the details of the case."
However, Wolfowitz cited Bank rules providing for "the right of every
staff member to the confidentiality of his or her records" as a caveat for
his cooperation.
His statement described Riza's situation as "exceptional and
unprecedented" and said her assignment was in fact involuntary and would
last for length of his tenure at the Bank, instead of the normal three
years.
But the Government Accountability Project argues that Riza's position at
the State Department was never in question and that the unexplained salary
hike she received when she moved there, along with a subsequent raise, are
the crux of the matter.
"Wolfowitz makes no mention of this, yet these decisions were his," notes
the statement on GAP's website.
Payroll data obtained from the World Bank and made public by GAP showed
that Riza, a communications officer in the Bank's Middle East Office,
received a 47,300-dollar, or 35.5 percent, raise to 180,000 dollars after
Wolfowitz arrived.
This raise was followed last year by another 13,590 dollar raise, or about
7.5 percent, to a total salary of 193,590 dollars net of taxes.
"The Board did not recommend that Wolfowitz award a salary increase of
such dimensions to Riza, and this is why the Board is looking into the
issue," said GAP.
Bea Edwards said that questions of nepotism still hovered over the Bank.
"All that we are really saying is that there was a violation of World Bank
rules in 2002 and 2003, that this woman has had a history of favouritism
in places associated with Wolfowitz's authority," Edwards said. "She has a
career that tracks very closely in terms of benefiting from places where
Paul Wolfowitz is in authority."
Wolfowitz had kept mum on the issue for the past two week and appears to
have addressed staff in his message only after the Board of Directors said
they will probe the matter.
In a message seen by IPS, the 24-member board said last week it "decided
to acquire all the information related to this matter and will respond to
the issues raised as soon as possible, in accordance with their
responsibilities as Executive Directors of the Bank Group."
Wolfowitz, a controversial figure for his neo-conservative views and key
role in planning the invasion of Iraq, has had rocky relations with many
of the Bank's employees since he first arrived at the Washington
headquarters in 2005.
Complaints have surfaced that he appointed former aides from the Pentagon
at the expense of better qualified career Bank employees. Several staff
members told IPS that they want the board to question him personally about
his hiring and promotion practices.
Since taking office, Wolfowitz has spearheaded a campaign to fight
corruption, cronyism and promote good governance in Bank projects and
loans in developing nations. This latest controversy already threatens to
discredit the campaign.
(END)
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