A neocon between the sheets
Two years ago, upon learning of President George W. Bush’s nomination of then-Deputy Defense Secretary Paul Wolfowitz to become the new president of the World Bank, I expressed relief (Chronicles, May 2005) that “at his new post Wolfowitz will not be able to do nearly as much damage as he has done at the Pentagon”:
“That damage has been considerable. Over the past four years, he has been the most influential proponent of neoconservatism both as an outlook and as a geopolitical project, within the Bush administration. The Weltanschauung is Shtetl-paranoid, Christophobic, and Straussian. The project is mastery of the world, a “benevolent global hegemony” that is as certain to end in ruin as it is likely to destroy the remaining vestiges of the American Republic.”
The relief has been justified: Wolfowitz is no longer able to engineer doomed foreign adventures that cost thousands of American lives and hundreds of billions of our dollars.
The fruits of his past labors are still with us, but at least he is no longer directly involved in foreign policy making. Other officials also make mistakes and blunders; but he is unique in being certain to make them all the time, and on a grand scale.
My implied warning that the infliction of damage would nevertheless continue has been equally justified. For the past two months Wolfowitz has been at the center of a classic corruption scandal that has brought discord and discredit to the World Bank—the kind of scandal that is more commonly associated with places like Lagos or Asunción, than with Washington D.C. What follows is a compilation of facts from open as well as reliable confidential sources.At the time his appointment was announced, it became known that Wolfowitz (b. 1943) was having an affair with a World Bank employee, Shaha Ali Riza. He admitted the existence of the relationship to the Bank officials in May 2005, just before he was confirmed in his new post.
Belying his unimpressive exterior, Dr. Wolfowitz has something of a reputation in Washington. He was separated from his wife, Clare Selgin-Wolfowitz, in late 2000 after allegations surfaced of his affair with a much younger employee at the School of Advanced International Studies at Johns Hopkins University, where he was dean for seven years. Dr. Selgin-Wolfowitz was so upset that she reportedly wrote to then president-elect George W. Bush, warning him that the affair could pose a national security risk if “Paul” were to be given a senior appointment in the new administration. 

Described by her colleagues as “an Arab feminist,” Shaha Ali Riza was in early 2005 the World Bank’s “gender coordinator” and communications specialist for the Middle East and North Africa regional office (MENA). She was born in 1953 in Tripoli (Libya) to a Libyan father and Syrian-Saudi mother, and grew up in Tunisia, Saudi Arabia, and England, where she obtained a British passport in addition to her Arab one. She moved to the United States in the late 1980s after marrying Bulent Ali Riza, a Turkish-Cypriot with whom she has a son who is now in his early 20s. She kept her former husband’s last name after their divorce and tried to be discrete about the affair with Wolfowitz, but her neighbors—unhappy about late-night presence of his security detail in their quiet residential street, and angry with Wolfowitz for his role in starting the Iraq war—did not cooperate.
Even before Wolfowitz’s appointment was confirmed in June 2005, senior executives at the World Bank were commenting that “unless Riza gives up her job, this situation will present an impossible conflict of interest.” The Bank’s staff association was swamped with complaints from employees about what they regarded as an “untenable” situation, because World Bank ethics rules clearly preclude simultaneous employment of couples (married or not) if one reports to the other—whether directly or indirectly, through a chain of supervision.
Wolfowitz’s only comment on the growing controversy was a statement issued through a Pentagon spokesman: “Needless to say if a personal relationship presents a potential conflict of interest, I will comply with bank policies to resolve the issue.” His position was that Riza should be allowed to keep her job at the bank if he recused himself from all personnel actions or decisions that involved her. The Bank’s Ethics Committee responded that recusal was not enough and that Riza would have to be reassigned outside the sphere of his management.
Wolfowitz “resolved the issue”—as we now know—by instructing Xavier Coll, World Bank’s VP for human resources, to send Mrs. Ali Riza on a secondment to the State Department and to raise her salary by a half to $180,000, tax-free. Coll was additionally instructed to grant Riza automatic annual pay increases of 8 percent, and to ensure her eventual promotion to the highest position of any civil servant at the Bank. She was on track to make $245,000, tax-free, by 2010.
Soon thereafter Dr. Wolfowitz negotiated a pay raise to $400,000 for him personally—equal to that of President Bush, only tax-free. He then brought over two Bush aides, Robin Cleveland and Kevin Kellems, from the White House, installed them in senior positions and rewarded them with open-ended contracts and quarter-million-dollar, tax-free salaries, despite their lack of training or experience related to the World Bank’s activities.
Let it be added that, upon joining the World Bank, Dr. Wolfowitz named the struggle against corruption as one of his primary tasks.