Contractor says was told to hire Wolfowitz friend

WASHINGTON (Reuters) - The U.S. Defense Department ordered a contractor to hire a World Bank employee and girlfriend of then-Pentagon No. 2 Paul Wolfowitz in 2003 for work related to Iraq, the contractor said on Tuesday.

A spokeswoman for Science Applications International Corp., or SAIC, said the Defense Department's policy office directed the company to enter a subcontract with Shaha Riza, under which she spent a month studying ways to form a government in Iraq.

Wolfowitz, a key Iraq war architect who left the Pentagon in 2005 to become president of the World Bank, is already under fire for overseeing a high-paying promotion for Riza after he took the helm of the poverty-fighting global lender.

Senior Democratic congressmen and other critics have pressed demands for his resignation, saying his actions have undermined the campaign against corruption in the developing world that has been a hallmark of his World Bank tenure.

SAIC said Riza's subcontract lasted from April 25 to May 31, 2003. She was paid expenses but no salary during her trip to Iraq, at her request, according to the contractor.

Melissa Koskovich, a spokeswoman for SAIC, said the contractor "had no role in the selection of the personnel who comprised the Iraq Governance Group under this contract."

Defense sources said the Pentagon was reviewing the matter.

The World Bank's board is examining Wolfowitz's role in helping to arrange Riza's promotion and the bank's staff association has called for his resignation.

The controversy hung over spring meetings of the World Bank and International Monetary Fund last weekend, attended by top finance and development officials from around the globe.