Only a few years ago, Shaha Riza was what is known in journalistic parlance as a flack. She was a media relations person, in other words—and a fairly junior one—whose job it was to reach out to reporters like me so that we would write about various World Bank activities. As recently as mid-2004, Riza was faxing and e-mailing PR releases to reporters around town, requesting that we contact her about exciting new Bank initiatives like a “$38 million investment loan to help the Government of Jordan develop efficient transport and logistics services,” or the “$359 million in loans for two projects aimed at helping the government of Iran improve housing conditions for poor and middle-income urban neighborhoods as well as expand access to clean water and coverage of sanitation services.” At the bottom of each missive she listed her number (202 458 1592) and her e-mail (firstname.lastname@example.org). Guess what? Many of us never called.
Now we’re calling and calling, and Shaha Riza just won’t pick up. The Libyan native has been quietly dating Paul Wolfowitz since at least 2000, says a longtime friend of the couple who would only speak about them anonymously. The two shared not just a mutual attraction but also a passionate cause: transforming the Arab world, ousting Saddam, and promoting democracy and rights for women. In recent weeks, this little-known relationship has exploded into public view. It is at the center of a titanic scandal that has pitted Wolfowitz, Riza and their high-powered Washington lawyers, Bob Bennett (for him) and Victoria Toensing (for her) against many European governments who serve on the Bank’s board. The Europeans have made their distaste for Wolfowitz—and their eagerness to see him go—very well known, and what began as minor brush fire that Wolfowitz tried to sweep aside is now engulfing him. The immediate issue is whether Wolfowitz committed an ethical breach by setting Riza up in a high-paying job outside the bank—as he admits he did—when he took over the presidency in 2005. But what’s really going on, says Bennett, is a power play by Europeans to take control of the bank, and to rid themselves once and for all of a top Bush administration hawk whom they hold responsible for the Iraq War.
Wolfowitz, however, may not go as soon as they had hoped. Bennett, in an interview with NEWSWEEK on Thursday, said that his client will refuse to step down even if, as expected, a special committee created to investigate Wolfowitz’s actions regarding Riza’s post concludes that he was acting unethically. “If their conclusion is he should resign, he is not going to resign, and we’re going to fight this,” said Bennett. “This is just a bogus case being used as vehicle for other reasons to diminish the power of the United States and try to smear Mr. Wolfowitz.” While Bennett refused to say so, it is believed that he is now trying to enlist the White House’s support by appealing to George W. Bush’s well-known skepticism about European motivations. “I’m leaving no stone unturned,” Bennett said.
As part of their new offensive, Bennett and Wolfowitz are also threatening to reveal the salaries and family perks—like subsidized private schooling—of World Bank executives. This is to retaliate for what they regard as the sanctimony of Bank employees who say Riza didn’t deserve the hefty salary (tax-free) she was receiving, given her junior status ($193,590 annually, considerably more than the $183,500 paid to Secretary of State Condoleezza Rice). “The question you should ask over there,” Bennett told me, helpfully suggesting a story line, “is how much money in the World Bank budget is attributable to board salaries and expenses. I understand the number is staggering for a 24-member board. I have heard two numbers between $50 million and $100 million.” (That could not be immediately confirmed.) But European governments are also digging in, and Wolfowitz may find himself hamstrung when he tries to raise badly needed new funding. "There will be increasing pressure to get him to quit," says one European diplomat who spoke on condition of anonymity.
All this enmity is quite a contrast to a couple of weeks ago, when Wolfowitz meekly suggested he would abide by whatever the special committee decided. And the irony is that Wolfowitz—a soft-spoken intellectual who is not without high-profile defenders, including some Democrats—may have been only trying to do right by his companion, Shaha Riza, who by most accounts is anything but a meek flack. The real story, pieced together from conversations with Bennett and colleagues and friends of the couple, is that the strong-willed Riza was deeply angered when, in early 2005, the bank’s ethics committee decided that it was a conflict of interest for the Bank president’s romantic interest to continue her eight-year career at the institution. Instead, she shoud be “seconded” to another institution, like the State Department, so that she would not be working for Wolfowitz. As Riza said herself, in a statement to the special committee this week, she fought hard against being “banished” from the Bank, and she was not shy about enlisting the help of her boyfriend, who had been aware of the ethical dilemma and initially sought to recuse himself from dealings with her at the Bank.
It was Riza herself who pressed Wolfowitz to impose the generous terms of her new posting, according to Bennett. “She said she worked up the numbers, not Mr. Wolfowitz. She was outraged that she had to leave,” says Bennett. And the ethics committee members who recently have criticized the World Bank president agreed to let Wolfowitz dictate terms because Riza herself was not going quietly, Bennett said. “They thought Mr. Wolfowitz could get a result with her. They didn’t want any part of if it.” (The former chairman of the ethics committee, Ad Melkert, denies having discussed specific terms with Wolfowitz.)
Riza was born in Tripoli, Libya, and grew up in Tunisia, Saudi Arabia and the United Kingdom. She hold degrees from the London School of Economics and Oxford University, where she met her husband, Bulent Ali Riza, a Turkish Cypriot who now works at the Center for Strategic Studies in Washington. The two had a son and later divorced. (Wolfowitz is also divorced.) Riza has long campaigned for women’s rights in the Arab world, and has worked for various think tanks and foundations—including the National Endowment for Democracy, created by former President Ronald Reagan in 1983. For much of her time at the World Bank, she was a senior gender coordinator for the Middle East and North Africa. Riza, says the longtime friend of the couple, is “very temperamental, very self-righteous, and very critical of the bank. It was amusing at first; then, it got aggravating after a while. You walk in the door admiring this Islamic woman who is very smart, and who was against the worst practices of the religious Islamic world. She had everything going for her. But I found her greedy in terms of power.”
Riza herself is still not talking. She has instructed even her attorney, Victoria Toensing, not to speak to the media either (quite a contrast to the voluble Bennett-and an unusual stance for Toensing, a high-profile Washington lawyer who frequently appears on TV). I made various efforts to speak to Riza this week—twice stopping by the small office she occupies at Washington’s Stimson Center think tank, the temporary home of the Foundation for the Future pro-democracy project she is directing. But she never came out or called back. If only I had phoned her about that logistics loan to Jordan a few years ago.