Wolfowitz endorsed friend for '03 contract

April 20, 2007|By New York Times News Service

WASHINGTON -- Paul D. Wolfowitz, while serving as deputy secretary of defense, personally recommended that Shaha Ali Riza, his female companion, be awarded a contract for travel to Iraq in 2003 to advise on setting up a new government, says a previously undisclosed inquiry by the Pentagon's inspector general.

The inquiry, as described by a senior Pentagon official, concluded that there was no wrongdoing in Wolfowitz's role in the hiring of Riza by Science Applications International Corp., a Pentagon contractor, because Riza had the expertise required to advise on the role of women in Islamic countries.

The investigators also found that Wolfowitz, now president of the World Bank, had not exerted improper influence in Riza's hiring. This week, Science Applications International Corp. had said that an unnamed Defense Department official had directed that she be hired. She had been a World Bank employee for five years at the time.

Wolfowitz's office said it could not provide a comment on the latest disclosure. Riza's lawyer, Victoria Toensing, did not respond to a request for a comment.

The disclosure of Wolfowitz's role in Riza's contract in 2003 provides a new indication of his involvement in her employment, at a time when the World Bank's board is investigating his role in arranging for a salary increase, promotion and transfer for Riza when he came to the bank in 2005.

The disclosure of another part of Wolfowitz's history with Riza came on a day of swirling pressure at the bank, where the 24-member executive board was meeting into the evening to discuss the situation amid mounting calls for Wolfowitz's resignation.

Bank officials, speaking on the condition of anonymity because they were divulging proceedings that were not supposed to be made public, reported that a rift between employees and Wolfowitz had become a major distraction from their work, with some employees wearing blue ribbons in a display of defiance against his leadership. "People feel paralyzed," said a bank official. "No one is doing any work at all. This genie can never go back to the bottle."

As the bank's executive board met, bank officials said that a separate review was being conducted by the board's vice presidents, who oversee specific countries, regions and subject matters, and who were polling their own staffs on Wolfowitz. The overwhelming sentiment, officials said, was that Wolfowitz should step down.

In another sign of crumbling support, bank officials and others said that a consensus had emerged among European officials involved with the bank that Wolfowitz had lost his ability to lead the institution, not so much because of the matter with Riza but because of other policy disputes over the past two years.

The meeting of the bank's executive board was called by the panel's most senior member, Eckhardt Deutscher of Germany. There was no sign of what the board would do, but Deutscher gave a speech yesterday to a German foundation offering a strong though oblique criticism of Wolfowitz.

"The World Bank needs a strong leadership with compassion, integrity and vision," Deutscher said in the speech to the Friedrich Naumann Foundation. "The governance structures need a fundamental reform. And lastly, the World Bank needs credibility, credibility, credibility."

Bank officials said that Deutscher, who has worked closely with Wolfowitz on developing the bank's anti-corruption policies, now favors the president stepping down voluntarily, a consensus already reached by Britain, France, the Netherlands and the Nordic countries.

A senior European official involved in the bank said Deutscher was "leading the charge" for a change in leadership and trying to assert the board's role, effectively wresting control of the bank from Wolfowitz.

On the matter of the contract for Riza in 2003, the Pentagon inspector general's office opened its review of it in March 2005, two years after the invasion of Iraq and one year after it began a sweeping investigation into contracting practices during the early, chaotic months of the war.

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