Wolfowitz Apologizes For 'Mistake'

World Bank President Paul D. Wolfowitz addressed staffers until they began to chant for him to resign.
World Bank President Paul D. Wolfowitz addressed staffers until they began to chant for him to resign. (By Alex Wong -- Getty Images)
By Karen DeYoung and Al Kamen
Washington Post Staff Writers
Friday, April 13, 2007

World Bank President Paul D. Wolfowitz publicly apologized yesterday for the "mistake" of personally orchestrating a high-paying job and guaranteed promotions for a bank employee with whom he is romantically involved, as new details of his role in the arrangement emerged and staff members angrily demanded his resignation.

Wolfowitz attempted to address about 200 staffers gathered in the bank's central atrium but left after some began hissing, booing, and chanting "Resign. . . . Resign." He had approached the gathering after holding a news conference in which he said, "I made a mistake for which I am sorry."

Bank insiders confirmed reports from the bank's staff association that Wolfowitz directed personnel officials to give Shaha Riza, his longtime companion, an automatic "outstanding" rating and the highest possible pay raises during an indefinite posting at the State Department, as well as a promotion upon her return to the bank. The Financial Times reported portions of the agreement yesterday.

When he took over as bank president in June 2005, Wolfowitz insisted not only that Riza -- then a senior communications officer at the bank -- retain her job but also that he maintain "ongoing professional contact" with her, according to a knowledgeable source who spoke on the condition of anonymity because of the legal issues involved.

But the bank ethics committee, citing conflict of interest regulations, ruled that she had to leave the institution. It agreed to give her a pre-departure promotion to compensate for the career disruption. Until yesterday, Wolfowitz and his aides had insisted that "all arrangements concerning Shaha Riza were made at the direction of the bank's board of directors." Bank sources said, however, that neither the board nor the ethics committee was aware of the terms of the final agreement.

"I take full responsibility for the details of the agreement and did not attempt to hide my actions or to make anyone else responsible," Wolfowitz said yesterday. He said that he had found himself in a "painful personal dilemma . . . trying to navigate in uncharted waters."

Riza left the State Department last year for a position at the U.S. government-funded Foundation for the Future. She remains on the bank payroll with a net salary of $193,590. Although the relationship between Wolfowitz and Riza -- a Tunisian-born British citizen -- and her eventual State Department posting were publicly known in 2005, the current controversy arose late last month after The Washington Post reported on her compensation package.

During a meeting yesterday morning with the board, Wolfowitz said: "I proposed to them that they establish some mechanism to judge whether the agreement reached was a reasonable outcome. I will accept any remedies they propose."

After meeting with Wolfowitz, the board spent the day considering the report of a committee investigating his actions and considering his future. One bank source said that Ana Palacio, the former Spanish foreign minister Wolfowitz appointed as general counsel after her predecessor resigned in late 2005 over the Riza issue, was asked to leave the room during the panel's deliberations.

As its discussions continued last night, the board received a letter from Wolfowitz asking, "in the interest of transparency," for the "immediate public release of all documents related to the Board's current review of the case involving myself and Ms. Riza," according to a senior bank official. The official said Wolfowitz believes that the documents support his statement in yesterday's news conference that he was the one who first raised the conflict of interest issue on his arrival at the bank two years ago and that he had also asked to be recused from consideration of the issue.

Wolfowitz said he had presented the question to the ethics committee and then taken its advice to "promote and relocate Ms. Shaha Riza."

Although few bank insiders suggested that Wolfowitz's job is in jeopardy, several speculated that his future will depend largely on continued support from the bank's leading contributor, the United States.

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