Woe was Wolfy! He had never signed up for a two-front war. At home, his girlfriend felt betrayed by his inaction. At the bank, pressure was mounting on him to do something, regain control of the situation, bring his girlfriend to heel -- act like a man. "You're sleeping with her; you solve it!" was the way one of his attorneys summed up the bank's message. To establish his authority at the bank, to meet the pressing timetable Melkert had abruptly imposed for action ("by the end of the week," he told Wolfowitz on Monday, August 8) and to salvage his "preexisting relationship" with the woman he loved, Wolfowitz on August 11 sent Coll a curt two-page memo ("Subject: Shaha Riza") laying down the law.
"I now direct you to agree to a proposal which includes the following terms and conditions," he wrote Coll. These included Riza's secondment to an outside institution of her choosing, immediate promotion to H at an annual midpoint salary of $180,000 (a raise of $47,340) and guarantees of I and J, depending on the length of Wolfowitz's term and whether Riza earned positive ratings from ad hoc review panels to be created specially for her. "Finally," Wolfowitz wrote, offering a last blast at the nervy Spaniard who had opened a fresh mouth to his beloved Shaha, "I wish to reiterate my deep unhappiness with the whole way of dealing with a situation that I still believe, and have been advised by experienced labor legal counsel, should have been resolved by my recusal." Twenty days later Riza and Coll jointly signed a letter of agreement that made her secondment to the State Department final.
"There is no further potential for conflict of interest," Wolfowitz promptly notified Melkert; the president withdrew his recusal offer and deemed the matter closed. For reasons unknown, it took 10 days for this memo to be hand-delivered to Melkert and another 63 days for Melkert to respond. "Because the outcome is consistent with the committee's findings and advice," Melkert wrote Wolfowitz on October 24, "the committee concurs with your view that this matter can be treated as closed." The next day Melkert told the bank's executive board he was pleased to report "the conflict of interest has been dealt with appropriately."
In the ensuing clamor for Wolfowitz's head, Melkert's correspondence was largely ignored, despite -- or perhaps because of -- its offering incontrovertible evidence that those World Bank officers paid to examine the conflict-of-interest resolutions and deem them kosher or not, gave, in this instance, their full seal of approval to the detestable warmonger and his ballbusting companion. Even more damning for Melkert -- who would later claim Wolfowitz "excluded" key personnel from the process and thereby prevented him and the other ethics-committee members from learning the terms of Riza's secondment -- was the handwritten "Dear Paul" note the committee chairman sent Wolfowitz the following month. Dated November 25, 2005, the letter is this case's smoking gun:
I would like to thank you for the very open and constructive spirit of our discussions, knowing in particular the sensitivity to Shaha, who I hope will be happy in her new assignment.
PS: Please let me know whether you could accept an invitation to you and Shaha at our place, probably joined by Bob and Beth.
Here was Melkert, shortly after the deal was done, praising Wolfowitz's conduct as "very open and constructive," expressing hope that Riza would enjoy her new assignment -- a far cry from wondering what the hell it was or questioning its ethicality -- and even inviting the lovers, in the cozy language of couples' cocktail chatter ("probably joined by Bob and Beth"), to Melkert's own home.
At deposition Melkert struggled to explain the inconsistency created by his contemporaneous correspondence and his later claims of ignorance of, and outrage over, the terms of Riza's transfer: "We had a discussion then, I remember, in the ethics committee, and we considered...that it would be better to accept that outcome rather than to have a protracted exchange of correspondence on the exact interpretation of the roles of the different actors in this."
"The impression this gives," one of Melkert's interrogators said, brandishing the October 24 letter, "is that the [ethics] committee felt that the advice had been followed the way it should have been followed." If not, the examiner continued, "maybe there was an opportunity there to exercise this [oversight] function and act upon this, don't you think?"
"No," Melkert shot back. Wolfowitz had gotten Riza to accept a position outside his line of authority, "and all other matters...were considered by us as in fact no longer relevant."
Melkert took a similarly disinterested view in January and February 2006 when an e-mailer, identifying himself only as John Smith, sent the bank's investigations hotline a pair of angry, highly detailed letters complaining about Riza's "egregious" compensation package. This time the numbers were plain for Melkert and his high priests of ethics to see: "Her salary went from around $130,000 (net) to $180,000 (net)," Smith accurately reported. Ignored for three weeks, Smith vowed to go public, even if it meant "a trial by the media that would not be fair to Paul Wolfowitz and would be detrimental to the reputation of the World Bank." The threat was clear: reputational risk.
On February 28 Melkert finally responded, sending Wolfowitz a letter marked CONFIDENTIAL and concluding that Smith's allegations did "not appear to pose ethical issues appropriate for further consideration by the committee" and "did not contain new information warranting any further review." Here then was a second instance when the World Bank's ethics cops, presented with highly detailed charges, looked at the Riza transfer and shrugged: Case closed. Melkert's last sentence later formed the cornerstone of Wolfowitz's defense: How could the chairman of the ethics committee have responded to Smith's dollar figures by saying they contained no "new information" and then go on to claim, as Melkert had at deposition, that Riza's "large initial pay increase" had somehow been hidden from him?
By that point, though, the pendulum had already swung. Called to action by the Chad episode, Wolfowitz's enemies -- most notably the leadership of the bank's staff association, which represents nearly half the institution's 10,000 employees -- felt emboldened by Smith's challenge to the new president's authority. Smelling blood, they lunged for the jugular. Had Wolfowitz been a beloved figure at the bank, the exculpatory conclusion Melkert and the ethics committee had reached -- twice -- would have ended the matter.
Instead, the leaks began. The first went to The Washington Post's Al Kamen, author of the gossipy In the Loop column, which broke the story on March 28, 2007. Kamen noted that after receiving another raise at the State Department, Riza was now earning $193,590 -- $7,000 more a year than Secretary of State Condoleezza Rice. Kamen correctly reported that World Bank staffers are, as a rule, "grossly overpaid" -- the bank's U.S. employees are reimbursed for their federal income tax payments, for example -- but he failed to mention that more than 1,000 bank staffers are at H level, some earning almost $230,000 a year, hundreds earning more than the secretary of state.
Critical pieces in the Financial Times and The New York Times swiftly followed, and soon the hunt was on, with all its glorious post-Watergate trappings: the special investigating committee stacked with unsympathetic umpires (what kind of eye would, say, Jiayi Zou, the executive director representing China, cast on Wolfowitz's and Riza's many insinuations against Shengman Zhang?), the East Coast editorials calling for resignation, the desertion of key aides, the increasing use of the adjective embattled and the predawn camera-crew stakeouts outside the embattled one's house in Chevy Chase, Maryland.
What even the couple's most implacable enemies didn't count on was the dreadfully impolitic way Wolfowitz and Riza went about defending themselves behind the scenes. The first battle Wolfowitz chose to wage in his campaign for survival was a reckoning with Coll. After an alarming inquiry from U.S. News & World Report, Wolfowitz summoned the HR executive for an angry confrontation in which, Coll testified, "he basically accused me of leaking the information.... He also told me...to tell friends, people like Shengman...to get out of his way and stop attacking him.... And he also stated very clearly that 'if these people fuck with me or Shaha, I have enough on them to fuck them, too.'"
At the same time, the stubborn lawyer inside Wolfowitz reared his ugly, spit-combed head. "Mr. Wolfowitz, and the White House itself, may have erred in pursuing a highly legalistic defense instead of a quieter political campaign," The Wall Street Journal reported on the morning of May 17, the very day Wolfowitz announced his resignation. Indeed, one of his first steps was to retain perhaps the era's most feared and loathed criminal defense attorney, Robert S. Bennett, the ruddy-faced vétéran de les guerres politiques best known for representing President Clinton in the Paula Jones litigation. "Mr. Wolfowitz...then showered the board with legal briefs complete with exhibits and appendixes," clucked the Journal.
The big guns -- Secretary Rice and President Bush -- never came out blazing. "My position is, is that he ought to stay," Bush said tepidly at a Rose Garden news conference on April 30, the day Wolfowitz's and Riza's depositions were taken. "And I appreciate the fact," Bush concluded, "that he has advanced -- he's helped the World Bank recognize that eradication of world poverty is an important priority for the bank." This was akin to complimenting Joe Torre for helping the Yankees recognize that winning ball games is an important priority for the team. And not until May 10 did a spokesman for Rice disclose that the secretary had been lobbying U.S. allies on Wolfowitz's behalf. Even so, Assistant Secretary Sean McCormack was careful to say the lobbying had occurred in "a couple of her conversations in the course of her ongoing conversations," in which she simply "mentioned her personal high regard for Paul Wolfowitz and the work that he's doing at the World Bank." Faint praise, indeed. A senior official at the Treasury Department, where the search was already under way for a successor to Wolfowitz, sighed to a Fox News reporter, "We're all, like, Why won't this end?"
