Wolfowitz Faces Ethics Panel At World Bank

Washington, UNITED STATES: FILES - Picture taken 15 April, 2007 in Washington, DC, shows World Bank President Paul Wolfowitz participating in the Development Committee press conference at the IMF/World Bank Meetings.
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World Bank president Paul Wolfowitz is due to face a special panel Monday to defend himself against charges of favoritism.

CBS News correspondent Sharyl Attkisson reports on the latest in the tangled case that has everyone from foreign governments to his own bank staff calling upon him to resign.

As head of the World Bank, Paul Wolfowitz says his mission is to help the poor, but it's the help he gave his girlfriend that has him fighting for his job.

It all started in 2005 when President Bush chose Wolfowitz to become head of the World Bank. Wolfowitz's girlfriend Shaha Riza already worked there, so to avoid a conflict of interest, Riza was reassigned. But she got what some consider a "sweetheart deal," and it was Wolfowitz who helped seal it.

Internal documents show Riza was tasked to the State Department to start a new foundation to promote democracy. She got $56 million in funding, and a big raise.

"This was way out of line with anything that would've been done for anything that would've been done for any person under normal circumstances," said Bea Edwards of the Government Accountability Project.

Riza only got $18,000 in pay hikes over four years (from $109,280 July 2001 to $127,070 July 2005). But in just the first year after Wolfowitz came to the World Bank, Riza's pay jumped by $66-thousand (from $127,070 July 2005 to $193,590 July 2006).

( Click here to see the numbers at the Government Accountability Project Website.)

She now makes more than the Secretary of State, and like all World Bank employees, her paycheck – all $193,000 of it – is tax-free.

A Wolfowitz spokesman said it had all been approved by the Ethics Committee until the Bank's Directors said the Committee had not "commented on, reviewed, or approved" Riza's deal.

It was then that Wolfowitz apologized.

"I made a mistake for which I am sorry," Wolfowitz told reporters on April 12.

Bea Edwards, who's with a government watchdog group, says Wolfowitz can no longer be an effective leader of an organization that gets a billion U.S. tax dollars a year.

"The board can no longer trust him to present honestly other situations that they have to approve," Edwards said.

Neither Wolfowitz nor Riza would agree to an interview.

But their supporters have said Wolfowitz worked out an agreement that was fair to Riza, and didn't violate any bank rules or ethical standards.