10 April 2007
Apparently yes, if you’re Paul Wolfowitz. The embattled World Bank President has come under new fire for the inappropriate salary adjustments his girlfriend Shaha Ali Riza received shortly after his assuming leadership of the institution in 2006.
Find background information and regular updates about Paul Wolfowitz's controversial tenure as President of the World Bank on BIC's Wolfowitz Watch webpage.
Ms. Riza reportedly made almost $200,000 working for Dick Cheney’s daughter at the State Department – more than Condolezza Rice.
Riza was transferred to the State Department in September 2005 to avoid a ‘conflict of interest’ with her then-boyfriend Paul Wolfowitz. The concerning details: she was promoted to the level of “GH” in blatant violation of relevant procedures; her promotion was nearly double that acceptable under World Bank Staff Rules; and she has received annual salary increases of approximately double what would be appropriate.
The Bank’s Staff Association has called on management to explain why the rules were bent in Riza’s case. “This case sends the message to staff that the rules apply to everyone except those associated with the most senior levels of management. It also sends the message to managers that they may flout the Staff Rules with impunity,” Staff Association Chair Allison Cave remarked.
Wolfowitz has responded that he acted in consultation with the Board’s Ethics Committee, and that he will cooperate with investigation into Riza’s sudden rise up the professional ladder. Riza has reportedly left her position with the State Department to work for the Foundation for the Future. Reports have also surfaced that Wolfowitz and Riza have in fact recently ended their relationship.
World Bank staff and the public are rightly concerned about management’s apparently subjective application of internal procedures, which in turn signal greater problems with staff trust and morale within the institution. This is particularly ironic given the upcoming discussions over governance at the World Bank and IMF during the institutions’ Spring Meetings, set to commence this coming weekend.
The details
Six months after Paul Wolfowitz took over the reins of the World Bank in 2006, his partner Shaha Riza was transferred from the organization's Middle East and North Africa Department's communications team to the State Department.
Shortly before leaving the World Bank, Riza was promoted to a managerial level position. Instead of being awarded the highest raise possible by World Bank standards--$20,000--she received a $47,340 raise. Not long after settling in at the State Department, Riza was awarded another raise--while still on the World Bank payroll--which puts her income at $193,590.
Staff Association Email
April 3, 2007
"Dear Colleagues,
Since publication of the March 28, 2007 “In the Loop” column in the Washington Post, the Staff Association has been inundated with messages from staff expressing concern, dismay and outrage. The Staff Association has looked into the concerns and would like to inform staff of what we have found. At the same time, we call on Senior Management and the Board to clarify what appear to be violations of Staff Rules in favor of a staff member closely associated with the President.
Bending the Staff Rules
At issue are the terms of external assignment for Ms. Shaha Ali Riza, formerly a Senior Communications Officer in the Middle East and North Africa Region (MNA). According to the Post and a subsequent New Yorker article, the Board’s Ethics Committee determined that Ms. Riza, who was linked romantically with Mr. Wolfowitz, should be placed on external assignment so as to avoid what Staff Rules define as a de factoconflict of interest, when one partner supervises another. Accordingly, Ms. Riza went on external assignment, with pay, on September 19, 2005. The Staff Association has not been able to determine who drew up and approved the terms of the external assignment. However, we have been able to verify that they are grossly out of line with the Staff Rules.
Promotion: Despite the “complement control” that limits the number of staff at grades GH and GI, Ms. Riza was given a non-competitive promotion to level GH on the day that she left on external assignment. Promotion from GG to GH is supposed to be competitive, vetted and approved by the relevant sector board and is supposed to be against a specific position (Staff Rule 5.05). This promotion clearly does not conform to the procedures.
Promotion Increase: Staff Rule 6.03 stipulates that salary increases upon promotion should be the greater of (a) 3-12% of the Market Reference Point (MRP) of the new grade, or (b) the amount necessary to bring the salary to the minimum of the new grade. Ms. Riza’s promotion increase should have been determined by the former calculation. However, she was given a promotion increase of 28% of the MRP – more than double the amount allowed by the Staff Rules.
Annual Increase: Since the performance of staff members on external assignment cannot be assessed and compared to that of their colleagues, Staff Rule 6.05 directs that their annual salary increases be set at the average percentage applied to adjust the MRPs for grades GA – GI. For FY07, the average percentage was 3.7%; Ms. Riza's annual increase this FY amounted to 7.5%.
Leak or Whistleblowing?
In general, the Staff Association defends a staff member’s right to have the Bank Group preserve the confidentiality of certain information—and we deplore this leak of a staff member’s confidential salary information. However, in this case, the information shared with the press reveals a violation of the Staff Rules and therefore seems to us a clear case of whistleblowing. We call upon Senior Management and the Board to address this issue: explain how/why the Staff Rules were bent in this case, take steps to ensure compliance with the Staff Rules with regard to Ms. Riza and set in place a system that will ensure (and allow verification) that Staff Rules are consistently applied. If everything is above board, it reduces the impetus to "leak" information and the need to blow the whistle.
Effects on Staff Trust and Morale
The 2005 Staff Survey revealed the low level of staff trust in our Human Resource processes – largely because the rules are either ignored or are applied unevenly. This case sends the message to staff that the rules apply to everyone except those associated with the most senior levels of management. It also sends the message to managers that they may flout the Staff Rules with impunity. It is extraordinarily discouraging to staff who have been denied promotions and/or who receive a minimal salary increase despite a stellar performance evaluation – and to hardworking GA-GD staff whose entire annual salaries are less than Ms. Riza’s promotion increase. This is not the first instance of such Staff Rule violations by the current World Bank Group Management, and the Staff Association calls upon them to abide by and uphold the Staff Rules that govern all of us.
Senior Management has put forward a call for good governance, both within the Bank and among our partner countries. Good governance is founded in a respect for rule of law, transparency and accountability. In order to be credible, Senior Management must model the behavior it espouses.
World Bank Group staff await the answers to these questions.
Alison Cave
Chair, Staff Association"
Wolfowitz's Response
The World Bank
Washington, D.C. 20433
U.S.A
PAUL WOLFOWITZ
President 04/09/2007
10:13:30 AM
To: All Bank Group Staff
Subject: Statement of the President
Dear Colleagues,
Over the past few weeks, information regarding the external assignment of a World Bank staff member has raised concerns among some of you about upholding Bank Group rules regarding the rights, obligations, and fair treatment of all employees.
I would like to assure the staff that I have always acted to uphold these rules to the best of my ability, and I will continue to do so.
The case of the staff member mentioned prompted me to seek the advice of the Board of Executive Directors upon my arrival at the Bank. I subsequently acted on the advice of the Board’s Ethics Committee to work out an agreement that balanced the interests of the institution and the rights of the staff member in an exceptional and unprecedented situation. Just as one example, a normal external assignment is voluntary and for a maximum of three years, but this one was involuntary and for the length of my service.
As President of this institution, I accept full responsibility for the actions taken in this case.
I have already indicated to the Board my intention to cooperate fully in their review of the details of the case. In particular, I will ensure that the Board has access to the facts in this case, in a manner that also respects the Bank’s rules concerning the right of every staff member to the confidentiality of his or her records.
What remains of the utmost importance to me is the protection of the interests of this institution as a whole, and our need to remain focused on our agenda of helping the world’s poor.
Paul Wolfowitz
Staff Reactions and Comments
Some comments posted anonymously by World Bank staff regarding the situation:
- “I fully support the idea of coordinating a quite [sic] and peaceful walk out this week after lunch as a way to show that the staff are demanding that the Board of governors and executive directors hold those responsible for this accountable”
- “Maybe Wolfowitz wouldn’t have so many holes in his socks if he stopped shooting himself in the foot”
- “If [Ana] Palacio really did ask the Board to side with management, then she should resign—an absolutely egregious trampling of an issue that warrants an investigation not a cover-up”
- “It is particularly discouraging to hear this news when staff in MNA [Middle East/North Africa division of World Bank where Shaha Riza worked] have had minuscule increases over the past years and been told by management that there would be no promotions (over the last 2 years) due to lack of funds.”
Press
- Neocons and nepotism? Sex, money & the fall of Wolfowitz, by Rupert Cornwell, April 11, 2007, the Independent (Independent website)
- Wolfowitz email backfires, by Suzanne Goldenberg, April 11, 2007, the Guardian (Guardian website)
- Wolfowitz to co-operate in Riza inquiry, by Krishna Guha, April 10, 2007 (Financial Times website)
- New Questions Emerge About Wolfowitz's Influence, by Emad Mekay, April 9, 2007 (IPS News website)
- Wolfowitz Says He'll Cooperate in Probe of Promotion, by William McQuillen and Christopher Swann, April 9, 2007 (Bloomberg website)
- Wolfowitz asked to explain promotion, by Lesley Wroughton, April 6, 2007 (Reuters website)
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'Outrage' at World Bank Over Colleague's Generous Salary, by Al Kamen, April 6, 2007 (Washington Post website)
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Wolfowitz partner's pay rise sparks protest, by Krishna Guha, April 5, 2007 (MSNBC website)
Additional Resources