Debi Kar, Jubilee USA's outgoing policy and media coordinator, was quoted in a Wall Street Journal article discussing Wolfowitz's do-as-I-say-not-as-I-do action in relation to his involvement in his girlfriend's salary negotiations.
And it would leave the Bank with diminished credibility to pursue the high-profile campaign to curb official government corruption -- among Mr. Wolfowitz's top priorities. Governments accused of corruption would say, "Who is he to be telling us about governance and corruption when he doesn't have his own house in order?" says Debayani Kar of Jubilee USA, a debt-relief advocacy group.
You can read the entire article, Terms of Employment (a smart play on words by a WSJ copy editor) by Greg Hitt online
if you have subscriber status or below:
TERMS OF EMPLOYMENT
Wolfowitz Memo, Dictating Raises
Given to Friend, Now Haunts Him
By GREG HITT
April 14, 2007; Page A1
WASHINGTON -- The disclosure yesterday of a 2005 memo from World Bank President Paul Wolfowitz -- dictating the terms of his girlfriend's promotions and raises while on the bank's payroll -- is giving new ammunition to critics who seek his ouster and threatening to weaken him if he stays on at the bank.
Those prospects may suit those who oppose him on controversial issues ranging from an expansion of the bank's presence in Iraq to its recent withholding of loans from governments who don't do enough to cure corruption. Either outcome could strengthen the role of the bank's 24-member board of directors, especially those representing European governments and the poor countries that borrow from the bank, on a host of issues.
Already, the public release of the memo and dozens of other related documents reflects the changing dynamic as Mr. Wolfowitz tries, with a mix of apologies and persistence, to hold onto his $400,000-a-year post as head of the world's biggest anti-poverty institution. With representatives of the U.S. and European governments at odds Thursday night over how many documents to disclose, Mr. Wolfowitz cut through the debate by asking that they all be released in an apparent effort to bolster his bid to keep his job.
In the August memo -- which wasn't reviewed by the bank's directors, ethics committee or general counsel -- Mr. Wolfowitz told Xavier Coll, vice president for human resources: "I now direct you to agree to a proposal which includes the following terms and conditions..." The memo went on to detail the salary that Shaha Riza, then a communications officer, would earn when she was assigned a job outside the bank at the bank's expense. It also set out her future raises and her status when she returned to the bank after Mr. Wolfowitz's term as president. She now earns a tax-free $193,590, about $61,000 more than before she was reassigned. It's not clear who besides Messrs. Wolfowitz and Coll knew all the terms.
The memo followed a long back-and-forth with the bank's board of directors over how to handle the potential conflict posed by Mr. Wolfowitz becoming Ms. Riza's boss. He made clear in the memo he wasn't pleased with the results: He asserted that the bank's ethics committee had rejected his plan, in which he would have recused himself from any personnel matters involving Ms. Riza but allowed her to "continue on her professional career course at the Bank." The memo ended with a bitter paragraph: "I wish to reiterate deep unhappiness with the whole way of dealing with a situation that I still believe...should have been resolved by my recusal."
The Bush administration's 2005 choice of Mr. Wolfowitz, an architect of President Bush's Iraq war, to run the bank was instantly controversial. His tenure has been marked by tension and criticism both from inside and outside the bank. But the past two weeks have been extraordinary: The March 28 disclosure of the details of Ms. Riza's salary led to chants of "Resign! Resign!" from some staffers gathered in the atrium of the bank's headquarters, and then to the emailed release of the previously highly confidential documents by the bank's board early yesterday morning.
A weakened Wolfowitz presidency, bank insiders and outside analysts say, could complicate a planned campaign to secure more than $30 billion over the next few years from governments around the world to replenish the bank's discount-rate loan program, known as the International Development Association. If Mr. Wolfowitz, who is 63, remains, "it's hard to see a scenario in which other countries step forward and say, 'We're going to pony up $30 billion,' " said Geoffrey Lamb, a former World Bank vice president who until recently was helping to raise money for the program and is now a senior fellow at the Bill & Melinda Gates Foundation. "It's terribly damaging."
And it would leave the Bank with diminished credibility to pursue the high-profile campaign to curb official government corruption -- among Mr. Wolfowitz's top priorities. Governments accused of corruption would say, "Who is he to be telling us about governance and corruption when he doesn't have his own house in order?" says Debayani Kar of Jubilee USA, a debt-relief advocacy group.
Even if Mr. Wolfowitz stays in the post, the harsh public spotlight that has been focused on him is widely seen as a victory for the World Bank's 10,000-member professional staff. Many of them have chafed at Mr. Wolfowitz's style and reliance on a couple of highly paid aides: Robin Cleveland, who was an influential budget analyst in the Bush White House, and Kevin Kellems, a former Pentagon and White House public-relations specialist.
The fracas already has made a minor celebrity out of a previously little-known urban planner, Alison Cave, an 11-year veteran of the bank's staff who chairs its staff association. Standing at the top of a flight of stairs in the bank's atrium before a crowd of World Bank staffers on Thursday, Ms. Cave called for Mr. Wolfowitz's resignation. "It ....seems impossible for the institution to move forward with any sense of purpose under the present leadership, especially in our endeavor to assist governments and their people in improving their own governance," she said, reading from a prepared statement.
When Mr. Wolfowitz, who is divorced, was named to head the institution, he and the board of directors quickly grappled with the issue of his supervising his companion, Ms. Riza. Then a specialist in issues related to women in the bank's Middle East department, she is an Oxford-educated British citizen who grew up in the Middle East.
As described in a six-page report released early yesterday by an ad hoc committee of World Bank directors formed to defuse the controversy last week, Mr. Wolfowitz and the bank's board and its ethics committee spent much of the summer of 2005 searching for an acceptable solution to the potential conflict of interest.
Eventually, Ms. Riza ended up leaving the World Bank and working -- at the bank's expense -- first at the U.S. State Department and now at an embryonic non-government organization created by the State Department to make grants "to help civil society" in the Middle East, called the Foundation for the Future. Her current salary of $193,590 (tax-free because she is a foreign national working for an international institution), was obtained by a whistleblower group, the Government Accountability Project.
In her own memo to the ad hoc committee, Ms. Riza said she had been treated unfairly both by having to leave her World Bank post and by having her salary details come out in the controversy. "I have now been victimized" for agreeing, she wrote, "to an arrangement that I have objected to and that I did not believe from the outset was in my best interest." The memo was included in the documents released by the bank.
Her relationship with Mr. Wolfowitz was discussed during his initial contract negotiations with the bank and was the subject of meetings, emails and memos from June through September 2005. Mr. Wolfowitz suggested that he recuse himself from "any influence over personnel decisions" involving Ms. Riza. The board's ethics committee suggested instead that she be "relocated to a position beyond (potential) supervising influence by the president." It said that because the move would take her out of the running for a promotion, she should be given an "in situ promotion," a raise within her present post.
The committee told Mr. Wolfowitz on Aug. 8, 2005, to have Mr. Coll work out the details with Ms. Riza. Three days later, Mr. Wolfowitz wrote Mr. Coll the now-public two-page memo that went further, by detailing how her raises and promotions would work. He then told the bank's ethics committee that Ms. Riza would be detailed outside the bank, which he indicated was per the committee's direction. He withdrew his plan to recuse himself.
The ethics committee in an August memo challenged Mr. Wolfowitz's summary of their conversations. The committee emphasized that it had "indicated that the staff member could continue to work at the bank provided that the position she holds is outside the direct or indirect supervision" of Mr. Wolfowitz "and there is no routine professional contact between them." But it said it the outcome -- sending Ms. Riza to the State Department -- was acceptable.
Mr. Wolfowitz, arguing that the bank's general counsel couldn't provide legal advice to both the ethics committee and the president, hired the law firm Gibson, Dunn & Crutcher to review the contract, after it had been accepted by all sides.
An anonymous employee complaint in January 2006 about Ms. Riza's salary said she had received a $50,000 raise to $180,000 without the approval of the board. The complaint was considered by the ethics committee and dismissed.
Mr. Wolfowitz's critics turned to other issues until recently. On March 28, the Washington Post detailed Ms. Riza's salary. Mr. Kellems, the Wolfowitz spokesman, responded in the story, "All arrangements concerning Shaha Riza were made at the direction of the bank's board of directors."
That assertion raised eyebrows within the bank, including among directors. A few days later, the bank's Staff Association, akin to a union, questioned Ms. Riza's salary and urged the bank board to inquire. The board formed the ad hoc committee. A few days later, on April 9, Mr. Wolfowitz posted a "Dear Colleagues" note on an internal Web site, saying he had "acted on the advice" of the Board's ethics committee, but added that he accepted "full responsibility for the actions taken in this case."
Over the course of the next few days, the ad hoc committee interviewed the bank's former general counsel Robert Danino, a former prime minister of Peru, and the former head of the bank's ethics board, Ad Melkert, a Dutch politician.
With finance ministers and central bankers from around the world -- representatives of the bank's 185 shareholder countries -- preparing to descend on Washington for the spring meetings of the World Bank and International Monetary Fund, Mr. Wolfowitz took the offensive. On Thursday , he used a previously planned news conference to apologize: "I made a mistake, for which I am sorry," he said, adding he would accept "any remedies" the board deems appropriate. Later that day, he found himself standing before angry staffers, who had been summoned to the atrium of the bank's headquarters by the staff association's leader, some of whom began chanting, "Resign! Resign!" when Mr. Wolfowitz appeared.
Meanwhile, the bank's board was meeting in private almost around the clock to consider the findings of the ad hoc committee. European nations, led by the United Kingdom, began pushing for full disclosure, a move they knew would push Mr. Wolfowitz to consider resigning. The U.S., backed by a handful of allies, resisted full disclosure, bank officials said. Mr. Wolfowitz ended that debate late Thursday, asking that "all documents related" to the matter be released "in the interest of transparency." By email, at 2:30 a.m. Friday, the board released more than 100 pages of documents and a statement pledging to "move expeditiously to reach a conclusion on possible actions to take." It offered no specifics except to say they would "focus on all relevant governance implications for the Bank."
Mr. Wolfowitz's chair was empty at yesterday afternoon's meeting of finance ministers and central bankers from the Group of Seven industrialization nations, officials said. But the White House continued to stand behind him. "He's apologized for the matter, and his board is undergoing an internal review, and we expect him to remain as World Bank president. He has the president's support," said Deputy White House Press Secretary Dana Perino.
The unfolding conflict moved the Bank into what many officials suggested is unknown territory. Disputes between the board and the president are not uncommon, but typically have been over policy matters, such as the clash over Mr. Wolfowitz's anti-corruption initiative. In this case, the dispute is about Mr. Wolfowitz's own conduct.
In the Wolfowitz camp, there has been growing frustration with the board, which one top Bank official complained was trying to act as "judge and jury" in the current brouhaha. The notion holding a vote of no confidence has been discussed within the Board, though bank officials cautioned there is no consensus on that issue and divisions among members have complicated efforts to move forward.
By releasing the accumulated material and the board committee's findings -- and avoiding a vote on whether to dismiss Mr. Wolfowitz -- the board may have put the impetus on Mr. Wolfowitz to decide whether to resign or try to weather the storm.
--John McCary contributed to this article.
Write to Greg Hitt at [email protected]
Jubilee USA Network has been working with partners in Liberia and Europe to campaign for the full cancellation of Liberia's odious debts.