A Wolf in Trouble

Wolfowitz Backed Friend for Iraq Contract in '03
By Thom Shanker and Steven R. Weisman
The New York Times

Friday 20 April 2007

Washington - Paul D. Wolfowitz, while serving as deputy secretary of defense, personally recommended that his companion, Shaha Ali Riza, 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 Mr. Wolfowitz's role in the hiring of Ms. Riza by the Science Applications International Corporation, a Pentagon contractor, because Ms. Riza had the expertise required to advise on the role of women in Islamic countries.

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

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

The disclosure of Mr. Wolfowitz's role in Ms. 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 large salary increase, a promotion and a transfer for Ms. Riza when he came to the bank in 2005.

The disclosure also came on a day of swirling pressure at the bank, where the 24-member executive board met into the evening to discuss the situation amid mounting calls for Mr. 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 the rift between employees and the president 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," one official said. "No one is doing any work at all. This genie can never go back to the bottle."

As the board met, officials said a separate review was being conducted by the vice presidents, who oversee specific countries, regions and subject matters, and who were polling their staffs. The overwhelming sentiment, officials said, was that Mr. 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 Mr. Wolfowitz had lost his ability to lead the institution, not so much because of the issue of Ms. Riza but because of other policy disputes over the last two years.

The meeting of the 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 Mr. Deutscher gave a speech on Thursday to a German foundation offering a strong though oblique criticism of Mr. Wolfowitz.

"The World Bank needs a strong leadership with compassion, integrity and vision," Mr. 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 Mr. Deutscher, who has worked closely with Mr. Wolfowitz on developing the bank's anticorruption policies, now favors having him step down, a consensus already reached by Britain, France, the Netherlands and the Nordic countries.

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

"For the moment, the view among the Europeans is, 'Let's continue the discussions, and it is up to the dean to express what the concern is,' " this official said, speaking about Mr. Deutscher. "It is in everybody's interest to avoid bringing this to a head."

On the matter of the contract for Ms. Riza in 2003, the Pentagon inspector general's office opened a review 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.

The Pentagon official who disclosed details of the inquiry agreed to answer questions on the condition of anonymity because it involved the role of senior officials in recommending individuals.

The official said the relatively small contract came under scrutiny only when a Pentagon investigator noticed Ms. Riza's name and recalled that she was romantically linked to Mr. Wolfowitz.

The investigator deemed the matter was worth opening an inquiry, because the type of contract called specifically for it to be assigned to Ms. Riza. But a more formal investigation was not instigated, he said, because "it was determined that Ms. Riza was uniquely qualified to fill the contract requirements."

Investigators also determined that "the recommendation of individuals does not constitute any misuse of office," the official said in describing the findings of the inspector general. "Nobody violated or misused their office." Nevertheless, the inquiry found that Ms. Riza "was recommended by Wolfowitz as well as others, in verbal form," the official said.

It was not clear how Mr. Wolfowitz's verbal recommendation was relayed through the Pentagon hierarchy and nascent occupation authority and then to the contractor, which is known as SAIC.

Earlier this week, a spokeswoman for SAIC said the company was told to contract with Ms. Riza by an official in the office of the under secretary of defense for policy, then headed by Douglas J. Feith.

But on Thursday, Pentagon officials, clarifying the source of the contract, said it was managed through the Office of Reconstruction and Humanitarian Assistance, then headed by Jay Garner, a retired Army three-star general. General Garner said in an interview that he did not remember Ms. Riza's playing any role in advising the American-led occupation.

The World Bank board is also examining the contract to see if it complied with bank rules requiring employees to get permission for outside consulting work when it might conflict with their duties at the bank. At the time of the contract, it was against bank policy to have dealings with Iraq, on the ground that it was a country under foreign military occupation.

source:
http://www.truthout.org/docs_2006/042107D.shtml