World Bank's Wolfowitz: Ethics Panel Knew of Pay Deal

Embattled World Bank President Paul Wolfowitz plans to argue that the institution's ethics committee knew of his involvement in securing a promotion and pay raise for his girlfriend.

Wolfowitz, an architect of the Iraq war in his preceding Pentagon job, will cite a February 28, 2006, letter that his attorney characterizes as showing that bank's ethics committee had looked at the arrangement.

The panel's chairman, Ad Melkert, said in the "Dear Paul" letter that an allegation relating to "a matter which had been previously considered by the committee did not contain new information warranting any further review."

The letter didn't specifically mention Wolfowitz or his girlfriend, Shaha Riza, by name. However, Wolfowitz's attorney, Robert Bennett, said the letter is proof that Melkert was aware of Wolfowitz' role in securing the compensation package. "There is no question that he knew," Bennett said Sunday.

The bank's executive directors, however, have said that the terms and conditions of the package had not been "commented on, reviewed or approved" by the ethics committee, Melkert or the bank's board.

Wolfowitz is scheduled to appear Monday before a special bank panel probing whether he violated bank rules in his handling of the 2005 promotion of bank employee Riza to a high-paying State Department job.

The controversy has prompted calls for Wolfowitz's resignation.

Riza already worked at the bank when Wolfowitz took the job. She was assigned duties outside the bank to avoid a conflict of interest, although she remained on the bank's payroll. Riza had earned close to $133,000 as a communications adviser in the bank's Middle East department. After the assignment change, she was getting paid $193,590.

Melkert's February 28, 2006, letter informed Wolfowitz that the ethic's committee had reviewed two e-mails sent from an anonymous whistleblower _ "John Smith" _ dated Jan. 21, 2006, and Feb. 15, 2006. The e-mails alleged ethical lapses by the World Bank's president. The January e-mail complains, among other things, about the size of Riza's pay raise. The February letter and the e-mails were contained in a package of documents released by the bank in mid-April.

Bennett, who will accompany Wolfowitz on Monday but won't be allowed to speak for him before the special committee, said: "We are very hopeful. We are looking forward to our appearing before the committee and trust they will be fair."

The World Bank's 24-member board will decide what action, if any, to take; a decision is expected this week. The board could ask him to resign, signal it does not have confidence in his leadership, reprimand him or take no action.

Materials Wolfowitz will submit to the committee will establish that "Mr. Wolfowitz did not want to get involved but they made him get involved," in Riza's promotion and pay package, Bennett said. The materials also will show that "the ethics committee approved what he did" and that Riza's compensation package was "well within the parameters" of the World Bank's salaries and benefits structure, he said.

Wolfowitz, who took over the bank on June 2005 has said he erred and has apologized for his handling of the Riza's pay package. He said he had asked to be recused from the matter, took the issue to the ethics committee and had followed the committee's advice to promote and relocate her. Prior to joining the World Bank, _ which fights global poverty _ Wolfowitz was deputy U.S. defense secretary.

The promotion and pay package has spurred allegations that Wolfowitz showed favoritism and has led to calls for his resignation from many of the bank's staff, the European Parliament, aid groups, former bank officials and some Democratic politicians. President Bush has repeatedly expressed confidence in Wolfowitz. The United States the bank's largest shareholder and the U.S. president traditionally selects the bank president.

Oxfam International, an aid group, said in an editorial to appear in Monday's Guardian newspaper that "Mr. Wolfowitz's continued presidency of the World Bank is untenable."

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