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[phantom22]

Pressure grows on Wolfowitz to resign
By Krishna Guha and Eoin Callan in Washington

Published: April 12 2007 19:03 | Last updated: April 13 2007 10:23

Paul Wolfowitz was under pressure to resign as president of the World Bank on Thursday after admitting he was personally involved in securing a large pay rise and promotion for a Bank official with whom he was romantically involved.

The Bank president issued a public apology, saying: “I made a mistake for which I am sorry”.

The apology came after the Financial Times revealed that Mr Wolfowitz ordered the World Bank’s head of human resources to offer Shaha Riza the pay rise and promotion as part of a secondment package.

The instructions were set out in a memorandum dated August 11 2005, according to two sources who have seen the document.

The Bank’s board of directors, who represent its shareholder governments, met late into the night in an emergency session to review the findings of their own investigation into the Riza assignment and decide on the next step.

The board adjourned the meeting early on Friday but said in a statement that it would act promptly.

”The executive directors will move expeditiously to reach a conclusion on possible actions to take,” the board said. ”In their consideration of the matter the executive directors will focus on all relevant governance implications for the bank,” it added.

The board also released the report of the ad hoc group that investigated the contract agreed with Ms Riza and also included communications between Mr Wolfowitz, the board and other bank officials.

Editorial comment:
Wolfowitz must be told to resign now
Pressed at the opening press conference of the Bank’s spring meeting on Thursday as to whether he would resign over his handling of the Riza case, Mr Wolfowitz said he would “accept any remedies” the board proposes.

He did not comment on the specifics of the memo.

Moments later, amid chaotic scenes in the lobby of the Bank’s headquarters in Washington, the Bank president made an impromptu address to staff who had gathered to call for his resignation.

Analysis:
How Wolfowitz fell foul of his own high standards
An emotional Mr Wolfowitz told staff the controversy had been “very painful” and apologised to them in person for his handling of the affair.

Alison Cave, the chair of the staff association, welcomed the apology but said Mr Wolfowitz must “act honourably and resign”.

Mr Wolfowitz said he acted as he did in order to shield the Bank from the threat of a lawsuit if Ms Riza was forced to leave because of staff rules that prohibit its employees from working for anyone with whom they are romantically involved.

He denied charges of an attempted cover-up, declaring: “I did not attempt to hide my actions nor make anyone else responsible.”

The Bank president made a plea for “understanding” saying he faced a “painful personal dilemma” at a time when he was new to the Bank and “trying to navigate in uncharted waters”.

Ms Cave said Mr Wolfowitz had “broken the staff’s trust on this and many other issues” and if the board failed to ask him to step down, the staff association would call a vote of no confidence in him.

In the August 11 2005 memorandum, two sources told the Financial Times, Mr Wolfowitz directed Xavier Coll, the Bank’s vice-president for human resources, to offer Ms Riza specific terms as part of a secondment package to the US State department.

These included a promotion, a pay rise above that normally associated with the promotion, and arrangements to ensure Ms Riza received exceptional annual pay increases. Only the promotion had been recommended by the board’s ethics committee, two sources told the FT.

The terms and conditions were not approved by the Bank’s ethics committee or its senior legal officer, then general counsel Roberto Danino.

A copy of the memorandum has been seen by the subcommittee of the bank’s board of executive directors who were charged with investigating the Riza assignment, two sources said.

Mr Wolfowitz went to the board on Thursday morning and proposed that it should “establish some mechanism to judge whether the agreement reached was a reasonable outcome.”

Copyright The Financial Times Limited 2007


Here is information on his concubine:

http://en.wikipedia....wiki/Shaha_Riza

Shaha Riza
Born
Tripoli, Libya
Other names Shaha Ali Riza
Salary 193,590 USD
Partner Paul Wolfowitz

Shaha Ali Riza worked for the World Bank.

She was born in Tripoli, Libya, to a Libyan father and Syrian-Saudi mother. She grew up in Tunisia, Saudi Arabia, and the United Kingdom. She moved to the United States after her marriage to Bulent Ali Riza in the late-1980s. Riza studied at the London School of Economics before taking a master's degree in International Relations from the University of Oxford, where she studied at St Antony's College.

She specializes in the Middle East and has carried out field research in a number of Arab countries. Immediately before joining the World Bank, she worked at the National Endowment for Democracy, where she set up and led the endowment’s Middle East programs. Since joining the World Bank in 1997, she has worked with the Middle East and North Africa Social and Economic Development Group as the senior gender and civil society coordinator in the Office of the MENA Chief Economist. In July 2002, she became the acting manager ( never confirmed in that position ) for external affairs and outreach for the World Bank’s MENA region.

She is presently working for Dick Cheney's daughter, Liz Cheney, in the State Department.

Promotion scandal
Riza has been romantically linked to the current head of the World Bank, Paul Wolfowitz, since the time when he was an undersecretary for defense in the Bush Administration.[1]

To avoid conflicts of interests from her relationship with Wolfowitz, Shaha Riza was placed on an external secondment. However, Wolfowitz personally directed that she should be promoted to management just before leaving (receiving a substantial pay raise) and that she has to have further salary increases at rates above the rate ceiling in the Bank.[2] This raised Riza's salary from $132,660 to $193,590 per year, tax-exempt.[3] The affair is currently under investigation from the World Bank's board of directors. On April 12, 2007, Wolfowitz apologized for what he called a "mistake", but would not comment about resigning as the World Bank's board of governors met to discuss the row: "I'm not going to preempt their deliberations. I will accept any remedies they propose."[4]


References
^ "World Bank meets over Wolfowitz", BBC NEWS, April 13, 2007.
^ Krishna Guha. "Wolfowitz partner’s pay rise sparks protest", Financial Times, April 5, 2007.
^ Al Kamen. "Where the Money Is", The Washington Post, March 28, 2007.
^ "Wolfowitz sorry for 'mistake'", Finance24, April 12, 2007.
A New York Times article (April 13, 2007, http://www.nytimes.c...fowitz.html?hp) says the State Department reports that Ms. Riza now serves as a consultant to the foundation, the Foundation for the Future, while drawing her World Bank salary. The Foundation For the Future was established with the mission to increase and diffuse knowledge concerning the long-term future of humanity. Ms. Riza's connection to the Foundation For the Future appears to be the Foundation's mission to "... contribute to an appropriate independent and specific funding mechanism for civil society activities to support democracy and reform, reflecting a commitment to the principles of civic engagement and democracy. The mechanism would provide technical and financial support for civil society programs, in the transitional or aspiring democracies in the whole of the BMENA [Broader Middle East North Africa] region . . . ." (--Final Declaration, Democracy Assistance Dialogue Workshop on Political Pluralism and Electoral Processes, Venice, Italy, July 23, 2005).

The Foundation For the Future's mission is described at the following State Department's: webpage http://bmena.state.gov/c16716.htm

The Foundation For the Future's own webpage is at: http://www.futurefoundation.org/

[yerevanforeigner6]

In my opinion the head of the World Bank need to resign due to this scandal. This is not fair to offer high pay rise to your lover working for such organization like this. Promotion can be recommended if it is based on performance but not on who you know...

[gamavor]

I don't get it!!! What romance has to do with promotion (i.e. money)? Isn't it the other way around? It seems to me that he was just trying to pay for expensive prostitute.