Wolfowitz Affair Challenges Workplace Ethics

May 16, 2007 — -- The Bush administration has publicly lined up its support behind embattled World Bank President Paul Wolfowitz, arguing that he did nothing wrong in connection with his girlfriend's substantial pay package, but left his future open-ended.

Secretary of State Condoleezza Rice said: "It doesn't seem to be the kind of thing that you would want to see the dismissal of the World Bank president over."

White House spokesman Tony Snow said: "What we've said is, yeah, he made mistakes.That pretty much is obvious. On the other hand, it's not a firing offense."

Treasury Department spokeswoman Brookly McLaughlin: "Missteps occurred on all sides and communication may not have been clear enough."

Meanwhile, Wolfowitz made an emotional appeal to the World Bank board to allow him to continue as president. Also, in a response Tuesday, Wolfowitz appears to blame his girlfriend Shaha Riza for what has transpired.

For example, Wolfowitz writes: "Everyone acknowledges that Ms. Riza was extremely angry and upset…and felt very strongly that she was entitled to compensation," and that World Bank ethics committee members "did not want to deal directly with a very angry Ms. Riza."

A special bank panel has already concluded that Wolfowitz broke bank rules and that his involvement in Riza's salary "went beyond the informal advice" given by the ethics committee he consulted, and that he "engaged in de facto conflict of interest."

So why, as one colleague put it, is Wolfowitz seemingly selling his girlfriend down the river? Isn't it obvious that what he did was simply wrong? His own review group says he broke the rules that govern favoritism in the workplace.

While the World Bank's board listens to Wolfowitz's defense and determines what to do next, ethicists say all institutions, whether in the public or private sector, face this sort of "workplace nepotism and fraternization" on a daily basis and they all have some sort of policy that is supposed to keep it from happening.

Randy Cohen, who writes "The Ethicist," a weekly column for The New York Times Magazine, told ABCNEWS.com it's pretty easy to understand.