Wolfowitz knew he would not be greeted in the World Bank as, well, a liberator. "Dr. Wolfowitz told us," the Pentagon investigators wrote in April 2005, that "strong opposition to the war was prevalent within the World Bank." New to the institution's polished, Eurocentric culture and eager to establish his credibility with the bank's largely foreign, overwhelmingly anti-Bush management class, Wolfowitz strove to play by the rules.
He had his attorney, Bob Barnett of Williams & Connolly, notify bank leaders that the incoming president and Riza had had, in the decidedly unromantic parlance of the HR world, a "preexisting relationship." Unwilling to sign a contract until the potential conflict was resolved, Wolfowitz suggested through Barnett that the bank's ethics committee guide the parties' actions. The bank agreed, and soon its general counsel, Roberto Dañino, a jowly, white-haired Peruvian, sent Barnett an e-mail saying, "We will arrange for the ethics committee to deal with this matter as soon as possible."
Wolfowitz proposed a solution of recusal, some formal agreement to limit his professional dealings with his girlfriend (or companion, as Riza preferred to be called). When Dañino sought to clarify whether Wolfowitz had proposed severing himself "from all personnel matters and professional contact related to" Riza, Barnett e-mailed back that Wolfowitz's remedy "WOULD NOT -- I REPEAT, NOT -- INVOLVE RECUSAL FROM PROFESSIONAL CONTACT." The next day, having disabled his CAPS LOCK key, Barnett e-mailed Dañino to explain that the president-elect intended only to recuse himself from "personnel actions or decisions" concerning Riza, a formulation that enabled the two to maintain contact at the World Bank.
In staking out this position, Wolfowitz was likely envisioning a relationship similar to the one Riza had had with the bank's previous president, James Wolfensohn; separated by multiple levels of bureaucracy, the two had interacted only "a handful of times," Riza later testified. More important, Wolfowitz was likely signaling to the executive board that he and Riza knew all about certain other "situations" at the bank. Two women had been permitted to continue working there while their husbands served in senior management positions. As managing director, Shengman Zhang was Wolfensohn's number two man, overseeing worldwide operations for five years. Zhang's wife, Lingzhi Xu, who began her World Bank career as a D-grade procurement assistant earning an annual salary in the range of $52,000, received a series of impressive promotions and ultimately secured a senior specialist position with an average annual salary of $123,000. Dañino later admitted that Xu "ended up being in the same unit Zhang was heading." The conflict ended only when Zhang left for Citigroup. A bank employee later told The Wall Street Journal that Xu's ascent was fraught with "question marks."
Then there was Maritta R. von Bieberstein Koch-Weser, an anthropologist who held several management positions at the bank, including the (characteristically pithy) title of "director for environmentally and socially sustainable development for the Latin America and Caribbean region." Meanwhile, her husband, Caio Koch-Weser, a handsome German economist -- John Forsythe in banker's pinstripes -- enjoyed a 26-year career at the bank, which catapulted him, too, to the level of managing director. "Neither wife was asked to leave the institution," Riza later testified. "If [either Zhang or Koch-Weser] was the sole managing director and he had no conflict of interest, why would I have any conflict of interest?... I was wondering, maybe because they're married, [the ethics committee members] are seeing that their relationships are asexual. But because I'm dating, there must be sex there."
For that argument Dañino had a ready retort. In the World Bank's dreary Hammurabic code of professional conduct, Staff Rule 3.01 stipulates that "a sexual relationship between a staff member and his/her direct report or direct or indirect manager or supervisor is considered a de facto conflict of interest." Coll and the bank's HR mandarins considered Wolfowitz, as president, to possess "a reporting line to anybody in the institution." Conversely, Staff Rule 4.01 sets forth the byzantine though theoretically practicable circumstances under which spouses may carry on working relationships.
The bank stood on shakier ground in the question of whether the Zhang and Koch-Weser cases would look bad in the event Riza sued the bank. All parties dryly termed this extreme fear of adverse publicity the bank's "reputational risk." The phrase recurred throughout the Wolfowitz-Riza case, an invisible MacGuffin and spoken mantra, shorthand for catastrophe. "There was reputational risk of this blowing up," an employee testified, "and us looking like we treated women like chattel." Dañino judged Riza's chances of prevailing at trial "very remote," but he too acknowledged the "implicit reputational risk" the case posed and that he was "constantly aware" of it. Coll privately assessed the bank's legal jeopardy, solved for the elusive X of reputational risk, with far less sanguinity. "We are in a very difficult situation -- with no precedents at the bank -- and it has enormous potential to damage the bank's reputation," the HR vice president wrote in an August 2005 memo, adding "there is a great risk to the bank if we cannot come to a workable agreement in a few days."
A Riza v. World Bank lawsuit had begun to loom as a real prospect the month before, when ethics committee chairman Ad Melkert, a Dutch Labor Party politician -- another in the bank's seemingly endless supply of balding white men in stylish European eyeglasses -- icily informed Wolfowitz that "the ethics committee does not consider recusal sufficient." Moreover, Melkert said, the ethics committee "advises [Riza] be relocated to a position beyond (potential) supervising influence by the president" -- meaning out of the bank altogether, with the banishment to last the duration of Wolfowitz's tenure.
For Riza, the "ballbuster" whose chief sin was to have fallen in love with Paul Wolfowitz, the options were suddenly cruelly limited to three choices: immediate termination with or without compensation, nasty litigation or "secondment," a transfer to an equivalent job, with equivalent benefits, at a place like the State Department. "I felt under attack," Riza testified. "I was 51 years old and being asked to remove myself from a career path to employment limbo for five if not 10 years. Why should I resign just because he became president? This is my world. This is my life."
At a farewell party for Wolfensohn, Riza ambushed Coll and unleashed a torrent of indignation and threatening allusions to workplace unpleasantness, adverse publicity and litigation -- reputational risk in all its monstrous, Hydra-headed forms. "I told him that this is absolutely unacceptable," she later testified. "'I'm not going to leave this place, and there is nothing that you can do about it.... If you think I'm not going to take this all the way up just because you have Paul Wolfowitz as president, you must be joking, because I'm going to relish it even more if he's there.'"
"She was extremely unpleasant," an employee recalled.
Thus the stage was set for the rocky meeting in Riza's office, where she and Coll, according to Riza's testimony, both forswore the desire to "fuck" each other. Coll attempted to explain -- "I suppose to give me a sweet," Riza said -- that in view of the disruption to her career, her compensation would include immediate promotion to H level. But Riza, as an acting manager, was already short-listed for an H. Coll tried to sound conciliatory ("We need to be discussing this further"); Riza did not ("I will be coming in with my lawyer"). The two had another bruising encounter three days later, on August 11. Coll coolly opened with a lump-sum offer. Riza, who acknowledged growing "emotional at parts" of their talk, angrily demanded automatic I and J promotions.
Riza's testimony about this meeting exposed the emotional strain the controversy was inflicting on her, as well as the heavy toll it was taking on her relationship with Wolfowitz: She was disgusted that he did nothing to oppose her tormentors. "You're not going to buy me out," she recalled sneering at Coll. "And you can go back and tell your boss, the president, that he's not going to buy me out either."
"Why is it the woman is always the one who has to leave?" she asked at her deposition. "I was fighting for that [principle]. I'm a single mother. I am the one who takes care of my son. I don't have a man taking care of me." Asked if she discussed Coll's offer with Wolfowitz, she replied, "If you think I'm angry now, you should see me angry there. I thought he should have fought the decision by the ethics committee. He became them, you, the bank, and I had to fend for myself."
