- The Washington Times - Monday, April 30, 2007

World Bank President Paul Wolfowitz decried what he called a “smear campaign” against him yesterday and told a bank panel he had acted in good faith in securing a promotion and pay raise for his girlfriend.

He said he had no plans to resign, and President Bush gave him a fresh endorsement.

In a statement prepared for the panel, Mr. Wolfowitz said the institution’s ethics committee had access to all the details surrounding the arrangement involving bank employee Shaha Riza “if they wanted it.”

Mr. Wolfowitz told the panel, “I acted transparently, sought and received guidance from the bank’s ethics committee and conducted myself in good faith in accordance with that guidance.”

The special bank panel is investigating Mr. Wolfowitz’s handling of the 2005 promotion and pay package of Miss Riza, who was assigned to duties at the State Department to avoid a conflict of interest.

Miss Riza, who appeared before the panel late in the day, said she didn’t want to move in the first place and wasn’t satisfied with the arrangement.

“I continue to believe that I should not have been asked to leave and that I was unjustly treated for reasons that I had no control over and still do not understand,” she told the panel. She also defended her pay.

“I should not be singled out for isolated finger-pointing when my salary level is within the same range as staff in my grade level who were not forced to leave their jobs,” she said. She said the “media circus” over the issue has done “significant harm to my career, my personal well-being and my prospects to continue the work I love.”

The controversy has led to calls for the resignation of Mr. Wolfowitz, who was an architect of the Iraq war in his previous job at the Pentagon. The bank’s 24-member board is expected to make a decision this week.

Mr. Bush, meanwhile, said Mr. Wolfowitz “ought to stay. He ought to be given a fair hearing.”

Mr. Wolfowitz contended that the controversy over the pay package was part of an effort to oust him from the office, which he has held for nearly two years. The institution’s mission is to fight global poverty.

“The goal of this smear campaign, I believe, is to create a self-fulfilling prophecy that I am an ineffective leader and must step down for that reason alone, even if the ethics charges are unwarranted,” Mr. Wolfowitz said.

“I will not resign in the face of a plainly bogus charge of conflict of interest,” he said.

As part of his defense, Mr. Wolfowitz cited a Feb. 28, 2006, letter that he characterized as showing that bank’s ethics committee had looked at the arrangement.

The panel’s chairman, Ad Melkert, said in the letter that an accusation 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 Mr. Wolfowitz or Miss Riza. However, Mr. Wolfowitz pointed to it as proof that ethics officials were aware of Miss Riza’s compensation package.

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

“The ethics committee was not consulted, nor did it approve the specific terms and conditions including the large initial pay increase, the stipulation for subsequent annual increases and the stipulations for subsequent promotions,” said Mr. Melkert, who has moved to a post at the United Nations.

Miss Riza was working at the bank when Mr. Wolfowitz arrived in 2005 and had earned close to $133,000 a year as a communications adviser in the bank’s Middle East department. She was reassigned at the State Department to avoid a conflict of interest but remained on the bank’s payroll. Her pay then rose to $180,000 and eventually to $193,590..

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