Rice Deputy Quits
After Query
Over Escort Service
By Glenn Kessler,
washingtonpost.com from the Web, April 28, 2007
Washington, DC -- Randall L.
Tobias, the deputy secretary of state responsible for U.S. foreign aid, abruptly
resigned yesterday after he was asked about an upscale escort service allegedly
involved in prostitution, U.S. government sources said.
Tobias resigned after ABC News contacted him with questions about the escort
service, the sources said. ABC News released a statement last night saying
Tobias acknowledged Thursday that he had used the service to provide massages,
not sex.
Tobias has been Secretary of State Condoleezza Rice's point man in an ambitious
effort to overhaul how the U.S. government manages foreign aid, a key part of
her "transformational diplomacy" agenda. Just two days ago, President Bush
lauded Tobias for his work in the administration leading "America's monumental
effort to confront and deal with the HIV/AIDS epidemic on the continent of
Africa."
In an unusual statement issued at 5 p.m., State Department spokesman Sean
McCormack said Tobias informed Rice "today that he must step down as Director of
U.S. Foreign Assistance and U.S. Agency for International Development
Administrator effective immediately. He is returning to private life for
personal reasons."
Contacted last night at his home in the District, Tobias, a former chief
executive of pharmaceutical giant Eli Lilly & Co., declined to discuss the
circumstances of his resignation, saying he would "stick with the statement the
State Department released today."
According to ABC News, Tobias said he contacted the escort service "to have gals
come over to the condo to give me a massage" and that there had been "no sex"
involved.
In a memo yesterday to the USAID staff, James R. Kunder, acting deputy USAID
administrator, called the resignation "shocking news" and urged workers not to
be "distracted from our developmental and emergency work."
Within minutes of McCormack's announcement, Tobias's biography was removed from
the USAID Web site.
State Department officials declined to comment further on the reasons for
Tobias's resignation.
"I'm sad today," said one person close to Tobias. "The president loves him
and Condi absolutely loves him."
White House officials said Rice briefed Bush on the matter early yesterday
before he met with Japanese Prime Minister Shinzo Abe. The president "was
saddened and disappointed and wished Dr. Tobias and his family well,"
spokeswoman Dana Perino said.
Deborah Jeane Palfrey, who operated the escort service, was indicted on federal
racketeering charges in February and has threatened to expose her high-profile
client list.
Palfrey has contended that her escort service provided clients with
college-educated women who engaged in legal, sexual game-playing for $275 per
90-minute session in their homes or hotel rooms. Prosecutors allege she
ran a prostitution ring.
Palfrey's attorney, Montgomery Blair Sibley, said yesterday that he has been
contacted in the past few days by five lawyers asking whether their client's
phone numbers are on Palfrey's list of 10,000 to 15,000 customers from 2002 to
2006. Some have also asked about whether an accommodation can be made to
avoid identifying their clients, which Sibley said he is not able to promise.
ABC's "20/20" is mining that database of phone numbers, Sibley said, for a news
report on the more notable of Palfrey's customers.
"I presume '20/20' crews running around with cameras has led to this flurry of
activity," Sibley said. "That may cause some people to worry."
ABC reporters interviewed Palfrey last week, Sibley said, and asked her about
specific customers by name. Sibley declined to identity them or speculate
about Palfrey's clients whose identities may be revealed in coming days.
He said that in many cases, he and Palfrey did not have the investigative
resources to identify them from their phone numbers, but that ABC did.
ABC is grappling with the question of whether to air a report or identify some
of those on the list. "We can't comment on ongoing reporting," ABC News
spokesman Jeffrey Schneider said.
After a long career in the corporate world, including stints not only at Eli
Lilly but also as AT&T vice chairman, Tobias joined the administration in 2003
to be the first global AIDS coordinator, with the rank of ambassador. He
was responsible for a start-up program designed to spend $15 billion over five
years, with the largest share going to 12 African and two Caribbean countries
that account for roughly half the world population with HIV/AIDS.
Last year, Rice tapped Tobias to be the first director of U.S. foreign
assistance, with the rank of deputy secretary, giving him the task of both
running USAID and coordinating all foreign aid so that the delivery of aid would
more closely follow the administration's policy goals. Under Tobias, for
the first time, the State Department produced documents showing exactly how much
aid was going to each country. He has proven so essential to Rice's plans
that she had refused to let him leave even though officials said he had wanted
to resign from the high-pressure job for at least six months.
The ambitious effort has been controversial on Capitol Hill, where Tobias's
style and performance have come under attack. At a hearing last month,
Rep. Tom Lantos (D-Calif.), chairman of the House Foreign Affairs Committee,
accused Tobias of "tycoonitis," which he described as "people who come from the
top of the corporate ladder who consider congressional suggestions, requests for
information and participation in decision-making as intruding on their turf."
Staff writers Michael Abramowitz, John Solomon, Carol D.
Leonnig, Howard Kurtz and Martin Weil and researcher Julie Tate contributed to
this report.
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