Wolfowitz decries ‘smear campaign’
Wolfowitz decries ‘smear campaign’
By Krishna Guha in Washington
Copyright The Financial Times Limited 2007
Published: April 30 2007 21:09 | Last updated: April 30 2007 21:09
A defiant Paul Wolfowitz on Monday told a committee looking into whether he broke ethical and other rules in a pay-and-promotion deal for his girlfriend, said he had done nothing wrong and had no intention of stepping down as World Bank president.
Mr Wolfowitz – who appeared with his two attorneys – told the panel of bank directors “I will not resign in the face of a plainly bogus charge of conflict of interest.”
His comments were apparently also aimed at US political opinion. During testimony, Mr Wolfowitz lashed out against what he called a “smear campaign” that aimed “to create a self-fulfilling prophecy that I am an ineffective leader and must step down for that reason alone.”
The Bank president said that if he was forced out it would deter potential future candidates from taking the job and “send a terrible message that the Bank does not care about reform.”
Mr Wolfowitz is under fire for directing the Bank’s senior human resources officer to grant a large pay rise and other benefits to Shaha Riza, his partner, as part of a secondment package.
The investigating committee is expected to release its findings as to whether his conduct broke Bank rules or ethics codes in a matter of days.
Mr Wolfowitz insisted that he – and the ethics committee at the time – “acted in good faith.” He said “for the directors now to declare my actions to be improper and to criticise me would be unjust and frankly hypocritical.”
The core of the case against Mr Wolfowitz is that he went beyond the advice of the committee in awarding pay and other benefits to Ms Riza.
On July 27 2005 the committee proposed that she be seconded outside the Bank to satisfy bank conflict of interest rules and be given a (one step) promotion to compensate for the potential disruption to her career.
On August 11, Mr Wolfowitz instructed the Bank’s human resources chief to offer her a promotion plus a pay rise in excess of the normal maximum associated with such a promotion. The Bank chief also guaranteed 8 per cent per annum pay rises thereafter, and a presumption of promotions by one or two more ranks on her return to the Bank, subject to review by a committee whose membership she could veto.
The detailed submission by Mr Wolfowitz’s lawyers did not contain any dramatic new evidence.
However, his lawyers argued that he was simply trying to implement the ethics committee’s advice in complex and unfamiliar circumstances.
The lawyers claim – without providing any supporting evidence - that Ms Riza’s secondment was “in line with other World Bank settlement agreements.” They said it did not include everything Ms Riza asked for. The lawyers admitted that it was not approved by Roberto Danino, the Bank’s own general counsel, but said it was reviewed by an outside lawyer.
That lawyer said a “limited review” suggested it was “reasonable” in part to avoid the risk of legal proceedings. Mr Danino told the board that there was no serious risk of a successful lawsuit against the Bank, which enjoys quasi-diplomatic status.
Mr Wolfowitz’s stressed that the ethics committee considered an initial anonymous complaint about Ms Riza’s pay in early 2006 and decided that the complaint “did not contain new information warranting any further review.”
Mr Wolfowitz’s supporters argue that to revisit the issue now is akin to being tried twice for the same offence; critics say the board is entitled to reopen the issue and conduct a more detailed review.
A spokesman for Ad Melkert, the-then head of the ethics committee, released a statement on Monday stating “it was entirely Mr Wolfowitz’s decision to do exactly what he originally proposed not to do: to engage directly in personnel matters regarding his partner.”
He added “the ethics committee was not consulted, nor did it approve, the specific terms of the external placement including the large initial pay increase, the stipulation for subsequent annual increases, the stipulation for subsequent promotions.”
Refering to recent press reports, the Melkert aide said “Mr Melkert is extremely concerned that spokespeople for Mr Wolfowitz continue to misrepresent key facts, including the role of the ethics committee.”
By Krishna Guha in Washington
Copyright The Financial Times Limited 2007
Published: April 30 2007 21:09 | Last updated: April 30 2007 21:09
A defiant Paul Wolfowitz on Monday told a committee looking into whether he broke ethical and other rules in a pay-and-promotion deal for his girlfriend, said he had done nothing wrong and had no intention of stepping down as World Bank president.
Mr Wolfowitz – who appeared with his two attorneys – told the panel of bank directors “I will not resign in the face of a plainly bogus charge of conflict of interest.”
His comments were apparently also aimed at US political opinion. During testimony, Mr Wolfowitz lashed out against what he called a “smear campaign” that aimed “to create a self-fulfilling prophecy that I am an ineffective leader and must step down for that reason alone.”
The Bank president said that if he was forced out it would deter potential future candidates from taking the job and “send a terrible message that the Bank does not care about reform.”
Mr Wolfowitz is under fire for directing the Bank’s senior human resources officer to grant a large pay rise and other benefits to Shaha Riza, his partner, as part of a secondment package.
The investigating committee is expected to release its findings as to whether his conduct broke Bank rules or ethics codes in a matter of days.
Mr Wolfowitz insisted that he – and the ethics committee at the time – “acted in good faith.” He said “for the directors now to declare my actions to be improper and to criticise me would be unjust and frankly hypocritical.”
The core of the case against Mr Wolfowitz is that he went beyond the advice of the committee in awarding pay and other benefits to Ms Riza.
On July 27 2005 the committee proposed that she be seconded outside the Bank to satisfy bank conflict of interest rules and be given a (one step) promotion to compensate for the potential disruption to her career.
On August 11, Mr Wolfowitz instructed the Bank’s human resources chief to offer her a promotion plus a pay rise in excess of the normal maximum associated with such a promotion. The Bank chief also guaranteed 8 per cent per annum pay rises thereafter, and a presumption of promotions by one or two more ranks on her return to the Bank, subject to review by a committee whose membership she could veto.
The detailed submission by Mr Wolfowitz’s lawyers did not contain any dramatic new evidence.
However, his lawyers argued that he was simply trying to implement the ethics committee’s advice in complex and unfamiliar circumstances.
The lawyers claim – without providing any supporting evidence - that Ms Riza’s secondment was “in line with other World Bank settlement agreements.” They said it did not include everything Ms Riza asked for. The lawyers admitted that it was not approved by Roberto Danino, the Bank’s own general counsel, but said it was reviewed by an outside lawyer.
That lawyer said a “limited review” suggested it was “reasonable” in part to avoid the risk of legal proceedings. Mr Danino told the board that there was no serious risk of a successful lawsuit against the Bank, which enjoys quasi-diplomatic status.
Mr Wolfowitz’s stressed that the ethics committee considered an initial anonymous complaint about Ms Riza’s pay in early 2006 and decided that the complaint “did not contain new information warranting any further review.”
Mr Wolfowitz’s supporters argue that to revisit the issue now is akin to being tried twice for the same offence; critics say the board is entitled to reopen the issue and conduct a more detailed review.
A spokesman for Ad Melkert, the-then head of the ethics committee, released a statement on Monday stating “it was entirely Mr Wolfowitz’s decision to do exactly what he originally proposed not to do: to engage directly in personnel matters regarding his partner.”
He added “the ethics committee was not consulted, nor did it approve, the specific terms of the external placement including the large initial pay increase, the stipulation for subsequent annual increases, the stipulation for subsequent promotions.”
Refering to recent press reports, the Melkert aide said “Mr Melkert is extremely concerned that spokespeople for Mr Wolfowitz continue to misrepresent key facts, including the role of the ethics committee.”
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