At the start of the scandal triggered by the revelation that World Bank President Paul Wolfowitz had helped arrange generous pay boosts for his girlfriend Shaha Riza, Wolfowitz declared, “I made a mistake, for which I am sorry.”
Two and a half weeks later, Wolfowitz had readjusted his rhetoric. “The ethics charges are unwarranted” and “bogus,” he said.
On Friday, the Bank’s board of directors was working to complete its report on the Wolfowitz affair and pondering whether to reprimand or even remove Wolfowitz. But regardless of the outcome of the official deliberations–which have been affected by behind the scenes maneuvering and the individual agendas of member nations–the Wolfowitz and Riza tale is one of Washington insiderism, a story in which a powerful player was able to guarantee that his companion would make hundreds of thousands of dollars a year and be entitled to a lucrative pension while working at a fledgling foundation with a friend of his. This is not how most public servants in Washington live.
After Wolfowitz, a former deputy defense secretary who was a prime architect of the Iraq war, assumed the Bank’s presidency, he was faced with what he has called “a potential conflict of interest.” He would be the boss (albeit not the direct boss) of his girlfriend, who was a communications officer in the Middle East section. He subsequently worked out a deal under which Riza would remain a Bank employee but be reassigned out of the Bank. What has caused the fuss is that this arrangement included a 36 percent pay hike–which raised her annual salary from $132,660 to $180,000–and guaranteed yearly pay increases of 8 percent. (She is now pulling in $193,000 a year.)
Wolfowitz has justified the initial compensation boost by arguing that when he arrived at the Bank Riza was short-listed for a promotion to communications adviser to the vice president of the Middle East region. Such a promotion would entail a jump in pay grade. The office of the vice president of the region had placed Riza’s name on a short list of nine candidates, but, according to an official familiar with the deliberations of the human resources committee overseeing this job opening, Riza’s position on the short list was not initially approved by the committee–a necessary step for her to receive the job. That did not end the matter. “It became clear the board was under strong pressure from upstairs to keep her on the short list,” this official says.