All Things Whistleblower: A GAP Blog

Judgment Day?

As anyone who’s reading this blog probably knows, today is the big day that Wolfowitz is presenting his case to the World Bank Board (NYT, AP, Reuters, FT). The story being kicked around in the press is that Wolfowitz and his lawyer (according to him) are “looking forward to a fair hearing and to show that Mr. Wolfowitz acted in complete good faith.”

Really? Complete good faith? Wasn’t it just a few weeks ago that Wolfowitz sent out an email to staff suggesting that his actions involving Riza’s promotion were done on the Board’s recommendations? And didn’t he later (by a couple of days) apologize for how he (himself!) handled the promotion, a blatant contradiction of what he stated earlier that week? Seems like if you apologize for something, you’re admitting some degree of guilt.

Oh, and please, let’s not narrow the focus on that one solitary issue. To be completely fair, it would only be right to include the other actions that have occurred at the Bank just this year under Wolfowitz. Take for example, your choice of the following:

That Riza received a questionable consulting position with a defense contractor in 2003 at his direction; that a Wolfowitz-hired Bank Vice President attempted to remove references and funding for “family planning” in Bank projects; that Wolfowitz’ office was responsible for watering down “climate change” in Bank environmental strategies; that Bank Senior Management was slow or did not report to Bank staff about a fellow staffer being shot in Iraq; that World Bank lending to Africa in the Fiscal Year of 2007 has plummeted; or that Wolfowitz was trying to bring Bank projects into Iraq.

Last, but certainly not least, there is a great editorial in today’s Los Angeles Times by Sarah Whalen attacking a previous editorial in that outlet defending Wolfowitz. That one was written by Ruth Wedgewood, whose connections to both Wolfowitz and the Bush administration Whalen easily exposes. Among many other incorrect claims, Wedgewood stated that this scandal was “manufactured,” and there exist “authors of this acrid affair.” Obviously, not everyone likes GAP.

-- Dylan Blaylock

Wolfowitz and Cleveland Misrepresent Riza Assignment to World Bank Board

On April 13, the World Bank Board made public numerous documents provided by President Paul Wolfowitz concerning the arrangements he and his office made with the U.S. State Department for his companion, Shaha Riza. Sources inside the Bank have told GAP that when the documents were provided to the Board, Wolfowitz’ office did not anticipate that they would be circulated beyond the Board and subjected to legal scrutiny.

GAP’s examination of the memos, e-mails and letters shows that, although the Ethics Committee of the Board directed Wolfowitz to detail Riza to a post outside the Bank and beyond his supervision, in fact, he apparently never actually did this.

Document 13 shows an August 31 letter Wolfowitz received from Douglas Cox of Gibson, Dunn and Crutcher, apparently reviewing the terms of Riza’s secondment. Cox expressed reservations about the arrangement citing possible violations of U.S. appropriations law:

    In addition, we understand that the State Department is separately reviewing the contract and will conclusively opine that the detail described therein is consistent with all applicable laws, including any appropriation law restrictions on the State Department’s ability to accept the detail.

Approximately one week later, Robin Cleveland, Wolfowitz’ aide, wrote in a curious ‘draft’ e-mail (Document 12) that Cox had fully approved the arrangement, despite his explicit reservation.

    They [Gibson, Dunn and Crutcher, L.L.P – Lawyers] provide a concluding opinion that the agreement was a reasonable resolution of the perceived conflict of interest which,     among other things, avoided protracted legal proceedings.

Finally, on October 5, 2005, Scott Carpenter wrote (Document 17) to Xavier Coll, Vice President for Human Resources at the Bank:

    For our part, I would like to take this opportunity to note that we do not view Ms. Riza as detailed or seconded to the U.S. Government.

State Department sources have informed GAP that a secondment refers to a U.S. Government (USG) – International Organization arrangement (U.N., Organization for Security and Cooperation in Europe). A secondment is usually paid by the sending host government. It constitutes, in effect, a budget contribution from the sending government.

This is why Riza could not be seconded – her work would be a budget contribution from an international organization to the Department of State. The USG can second someone to the World Bank and the cost of doing so is attributed to the USG contribution to the Bank. However, U.S. appropriations law does not permit an international organization like the World Bank to make an operating contribution to the budget of the Department of State.

This arrangement was highly improper for both the World Bank and the State Department. At State, USG policy work was given to an international organization employee, and the international organization paid for that activity in the form of its employee’s salary. At the World Bank, rules prohibit Bank staff from working on the political affairs of shareholder governments.

Matters became more complicated when the State Department issued Riza a building pass for unescorted access, without a State Department security clearance. Sources at State say that this is highly irregular and improper.

GAP’s sources state there are no Human Resources records for Shaha Riza at the State Department.

-- Bea Edwards

The Last Couple Days

Just to catch up, Wolfowitz’ lawyer was rejected by the Board from making a presentation regarding the Riza affair matter. This is because it is the institution’s practice to bar attorneys from representing employees at misconduct hearing misconduct.

Then, the European Parliament (the European Union’s legislature) joined the bandwagon in calling for Wolfowitz’ resignation.

Now, Wolfowitz is saying he’s being treated “shabbily and unfairly” by the World Bank Board, and has appealed for more time to make his case.

-- Dylan Blaylock

Shaha Riza Not Seconded To World Bank

Mixed in the wealth of documents released last week by the World Bank, it is evident that Shaha Riza, the pivotal partner figure in the Paul Wolfowitz scandal, appears to have never been seconded to the State Department. The memo released by the Board dated October 5, 2005, from J. Scott Carpenter, a State Department official, to Xavier Cole, World Bank Human Resources, reads as follows:

“I would like to take this opportunity to note that we [State] do not view Ms. Riza as detailed or seconded to the U.S. Government.”

Bea Edwards, GAP International Director, commented: “World Bank staff members are prohibited from doing political work for shareholding governments. Shaha Riza was assigned by the Bank to promote an overtly political U.S. agenda in the Middle East while still on staff. Wolfowitz does not appear ever to have understood that the World Bank is not a franchise of the Bush administration, and that is the root of his problems there.”

This revelation adds more questions to the Riza-SAIC contract, of which GAP has called on numerous questions to be answered (see post below).

GAP Poses Questions Regarding Riza-SAIC Deal

Allegations concerning the personal/professional relationship between World Bank President Paul Wolfowitz and Shaha Riza, his companion and former World Bank staffer, now extend to their work together at the U.S. Department of Defense (DoD). In 2003, the Defense Department awarded Science Applications International Corporation (SAIC) eight contracts that were subsequently reviewed by the DoD Inspector General (IG). A convergence of unusual facts about the contract issued to Shaha Riza by SAIC raises red flags about the propriety of the arrangement, and questions remain that GAP feels should be clarified by SAIC and DoD. Some background for our questions:

• According to the DOD IG report issued in March 2004, the SAIC contracts reviewed were sole-sourced (no competitive bidding).[1]
• According to the same report, the DOD office responsible for these contracts, the Office of Reconstruction and Humanitarian Assistance (ORHA) “neither followed nor tried to learn the acquisitions process.” In inquiring about how the specified “subject matter experts” (SMEs) can be hired, one DOD contract specialist told another, “Perhaps you can check with SAIC to see if they already have these guys on their list, or any other info.”[2] “On their list” is U.S. government-speak for having a security clearance, sources have pointed out.
• Paul Wolfowitz, then-Deputy Secretary of Defense, personally recommended that his companion, Shaha Riza, be hired through a sole-sourced contract to SAIC for a post-invasion mission to Iraq, while she was a staff member at the World Bank.[3] As a non-U.S. national employed at an international organization, it would have been extremely unlikely that Riza had a security clearance.
• DoD awarded a contract to SAIC (DASW01-03-F-0537) for the amount of $235,231.28 to cover the fees and expenses of three “subject matter experts” (SMEs), one of whom was Shaha Riza.
• Under SAIC contract DASW01-03-F-0537, if Riza was the SME paid the least, she appears to have earned $17,100.56, plus expenses, for her Iraq mission.[4]
• Riza was compensated for services performed from April 25 – May 31, 2003.[5]
• Through her attorney, Victoria Toensing, Riza has denied being paid anything other than expenses for her travel to Iraq for SAIC. SAIC, however, has said only that Riza was not paid a salary “while in Iraq.”[6]
• A subsequent Pentagon inquiry, opened in 2005 into Riza’s 2003 contract with SAIC, found that Wolfowitz did nothing improper in directing SAIC to hire Riza. According to the New York Times, the “…contract called specifically for it to be assigned to Ms. Riza.” DoD did not open a more formal investigation, however, because the initial inquiry found that “Ms. Riza was uniquely qualified to fill the contract requirements.”[7]
• When reviewing the SAIC contracts in question in 2004, however, the DoD IG Acquisition Report found that the SMEs were first identified by DoD, and SAIC was charged with writing statements of work to fit them.[8]

In straightforward terms, GAP believes that the facts behind Shaha Riza’s 2003 SAIC contract appear to suggest wrongdoing and need clarification. Wolfowitz, as Deputy Secretary, directed SAIC to hire Riza and, when issued a Defense Department contract, SAIC wrote terms of reference to fit her. For 30 days worth of work, Riza was apparently paid $17,100 by SAIC when she returned to Washington, D.C. in June 2003.

Questions that need clarification:

1. What were the terms under which Riza was paid by SAIC? 

2. Did Riza have a security clearance for this contract? If so, how did she acquire it so quickly, given that she was not a U.S. national?

3. Did the appropriate authorities at the World Bank know that Riza was simultaneously a Bank employee and a consultant for a defense contractor? 

4. Why did the Pentagon inquiry into Riza’s SAIC contract, which found her to be “uniquely qualified”, not reference the DoD IG’s report of March ’04, which determined that her contract had been written to fit her skills?

5. How did Paul Wolfowitz communicate to SAIC that Riza should be hired as a subject matter expert? 

6. Will there be a new DoD inquiry into the propriety of Wolfowitz’ role in SAIC’s hiring of Shaha Riza in 2003?

7. Who at the World Bank approved her leave and under what circumstances? 
   

---

[1] DoD IG Acquisition Report, March, 2004, p. 5.

[2] Ibid. p. 8.

[3] “Wolfowitz Backed Friend For Iraq Contract in ’03,” Steven Weisman, New York Times, April 20, 2007.

[4] “SAIC Contract indicates Shaha Riza Paid,” www.whistleblower.org, April 17, 2007.

[5] “Unusual Trip to Iraq in ’03 for Wol;fowitz Companion,” Steven Weisman, New York Times, April 17, 2007.

[6] “Contractor says Pentagon Directed it to Hire Wolfowitz’ Companion in 2003,” Steven Weisman and David Sanger, International Herald Tribune, April 17^th, 2007.

[7] “Wolfowitz Backed Friend…”

[8] “The DCMA (Defense Contracting Management Agency) specialist who was involved with the contracts explained that ORHA (Office of Reconstruction and Humanitarian Assistance of the DoD) officials would contact and inform him that a specific person needed to be put on contract. The statement of work was then developed based on a brief statement from ORHA officials and the skill level of that specific person. The DCMA specialist felt that a requirements validation process needed to be put in place.

To illustrate the attitude of ORHA personnel who were generating requirements the specialist stated that he was told:

….these are the people we need to bring on board, and here is going to be the minimum requirements for their job, and make the rest of it happen. 

DoD IG Acquisition Report, p. 7 and 8.

Growing Number of Calls for Action

Over forty former senior Bank officials signed a letter to the editor of the Financial Times urging Wolfowitz to step aside in the interests of the Bank itself. They declared that the World Bank can no longer carry out its mission with any moral authority so long as Wolfowitz remains its President.

At the same time, the Director General of the Independent Evaluation Group, a unit charged with assessing the effectiveness of World Bank projects, delivered a strongly worded message to the Bank’s Board of Directors. The memo expressed concern about the damage Wolfowitz has done to the Bank and the danger that his continued tenure will do more. The statement called on the Board to find a “proper and quick resolution” to numerous problems and ended with an acknowledgement that it is now time to reassess the entire governance structure of the World Bank and address its deficiencies.

Oh, and Wolfowitz has hired a prominent lawyer.

--Dylan Blaylock

New GAP Report on GNEP and Nuclear Safety

Today, GAP released a report, Radioactive Wastes and the Global Nuclear Energy Partnership, with the Institute for Policy Studies (IPS) and Friends of the Earth. The report examines the Department of Energy’s (DOE) Global Nuclear Energy Partnership (GNEP), a program that expands nuclear energy usage worldwide. The report questions whether the plan ensures the safe management and disposal of radioactive wastes stemming from the GNEP process. For a quickie version, click on the fact sheet.

-- Dylan Blaylock

Until Monday...

The Bank's board of directors has put off judgment of Wolfowitz until next week.

-- Dylan Blaylock

The Latest...

Late last night, the Bank board ordered an ad hoc group to discuss the fate of President Wolfowitz.

The London Times is reporting that the White House is writing up a Wolfowitz replacement list. The Washington Post’s In the Loop column, crucial in bringing about this entire Wolfowitz fiasco, takes a humorous look at replacements.

The New York Times confirmed that it was Wolfowitz who recommended Riza for the SAIC job.

The Daboub/family planning aspect of this story is also picking up more steam. Morning Edition reported on it today (which featured Bea Edwards), along with the Economist yesterday.

And last, but not least, someone made a parody of “The Office” called “The Bank,” focusing on Wolfowitz and Riza.

Lots of action.

-- Dylan Blaylock

Our Apologies...

…for not updating the blog as regularly as we would like to. Things are moving at a mile a minute at our offices with the Wolfowitz issue.

The Board of Directors will meet today to discuss the matter. On the media front, a slew of articles have come out in the last few days regarding several different major issues the Bank is taking into consideration.

The Los Angeles Times ran a great report about the “family planning” funding for African countries and other countries disappearing, on the order of a Bank Managing Director handpicked by Wolfowitz. In speaking with sources, Bank employees are furious about this matter.

The SAIC angle to this story that Riza worked as a consultant to a defense contractor while working for the Bank in 2003 has also received a fair amount of attention. (FT, WP, NYT). In fact, the Pentagon will review her contract.

Oh, and one of Wolfowitz’ top deputies has told him that he should resign for the good of the Bank.

It’s going to be an interesting end to the week.

--Dylan Blaylock