Ex-official says Wolfowitz was misleading

A World Bank official who helped negotiate the terms of Paul D. Wolfowitz’s job as bank president two years ago said Wolfowitz failed to resolve a conflict of interest involving his girlfriend, a bank employee.

Moreover, said Roberto Danino, who has since resigned as the bank’s general counsel, Wolfowitz relied on a series of half-truths and false statements, apparently designed to mislead the bank’s executive board.

Danino, whose testimony was released late Monday, was among the witnesses who met with a committee of the board in closed session as officials consider the conflict-of-interest charges against Wolfowitz and decide whether to take action against him.

The 24-member board apparently hopes Wolfowitz will resign, sparing it a bruising effort to oust him. But Wolfowitz, represented by Robert S. Bennett, a high-profile Washington lawyer, remained defiant Monday in a meeting with the board’s investigative committee.

Throughout his weeks-long struggle to retain his job, Wolfowitz has insisted that he sought to recuse himself from all personnel matters involving Shaha Ali Riza, a member of the bank’s staff with whom Wolfowitz has a close personal relationship.

“In order to avoid even the appearance of a conflict of interest, I proposed that I be recused from any and all personnel matters involving her,” Wolfowitz said in his meeting with the bank committee.

However, Danino told the investigative committee that Wolfowitz insisted on retaining “professional contact” with Riza, a demand Danino said he considered unacceptable under board rules. The bank’s ethics committee, which negotiated on behalf of the bank, also rejected the arrangement proposed by Wolfowitz, Danino said.

Wolfowitz, in explanations he has offered, has omitted any mention of his intent to continue professional contact with Riza.

“The omission thus presents a half-truth that misleads the reader and hides [Wolfowitz’s] wish not to comply with bank rules,” Danino said.

Wolfowitz went on to help Riza negotiate a 36% pay raise, from $132,600 to $180,000, a salary she collected from the bank even after she left there for a job with the State Department. That raise has generated most of the controversy that has jeopardized Wolfowitz’s job.

“I believe that [Wolfowitz] made serious substantive errors in providing unauthorized benefits to a person with whom he had a conflict of interest,” Danino said. “I also believe he may have tried to deceive the board, the staff and the general public.”

Ad Melkert, the ethics committee chairman, also testified to the investigative committee and supported Danino’s version of events.

Melkert, in a prepared statement Tuesday, told the committee that the ethics panel advised Wolfowitz that he had to avoid professional contacts with Riza as well as recuse himself from personnel matters involving her.

“It is completely incomprehensible that subsequently Mr. Wolfowitz did exactly what he originally had proposed not to do: to engage directly in personnel matters involving his partner,” Melkert said.

Bea Edwards, director of international programs for the Government Accountability Project, a private whistle-blower protection organization, said the statements of Danino and Melkert showed that Wolfowitz’s offer to stay out of personnel decisions on Riza was “a sham.”

joel.havemann@latimes.com