Mr. Wolfowitz apologized at a morning news conference and at the atrium meeting after the staff association disclosed that it had found a dated memorandum from Mr. Wolfowitz to a vice president for human resources at the bank, apparently instructing him to agree to the terms of a raise and reassignment for Ms. Riza.
The transfer and a subsequent raise eventually took her to a pay of $193,590 from $132,660, tax-free because of her status as a diplomat, and exceeding the salaries of cabinet members. “In hindsight, I wish I had trusted my original instincts and kept myself out of the negotiations,” Mr. Wolfowitz said.
“I made a mistake, for which I am sorry,” he added, pleading for “some understanding” of the “painful personal dilemma” he faced when he left the Pentagon to become bank president. Mr. Wolfowitz said he had been seeking to avoid a conflict of interest by having Ms. Riza, with whom he had a personal relationship, transferred from his supervision.
What drove the anger at the bank was not that Mr. Wolfowitz had denied earlier that he had sought Ms. Riza’s transfer, but that he had been less than fully candid in discussing it until documents surfaced showing his direct role. His earlier insistence that he had consulted with ethics officials was disputed by some of them, who say they were not involved in the salary aspect of discussions.
Mr. Wolfowitz, who is divorced, has been close to Ms. Riza for several years, according to people who have worked with them. She was a communications officer in the Middle East and North Africa bureau of the bank when Mr. Wolfowitz arrived in 2005, and was transferred that September to the Middle East and North Africa bureau to help set up a semi-independent foundation to promote democracy in that region.
Her initial supervisor at the State Department was Elizabeth Cheney, whose father, Vice President Dick Cheney, has been a longtime associate of Mr. Wolfowitz. Ms. Riza now serves as a consultant to the foundation, the Foundation for the Future, while drawing her World Bank salary, the State Department said.
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