Federal Official Resigns in Escort Service Inquiry (our tax dollars at work)

Published: April 28, 2007

WASHINGTON, April 27 — The head of the Agency for International Development, Randall L. Tobias, resigned abruptly on Friday for what he said were “personal reasons,” but an administration official said Mr. Tobias’s name had come up in an investigation of a suspected Washington prostitution ring.

On Friday night, ABC News said Mr. Tobias had confirmed on Thursday that he was a customer of an escort service.

A woman from Vallejo, Calif., Deborah J. Palfrey, has pleaded not guilty to charges that she operated a call-girl service in Washington, and has threatened on her Web site to sell her client list to raise money for her defense. ABC News reported that Ms. Palfrey had given the network thousands of phone numbers of clients.

In court papers filed on April 11 in Federal District Court here, she identified an adviser to the Pentagon as “one of the regular customers” of her service. She posted the man’s photo from his own Web site and tax records on a house he owns in Washington.

On her Web site, Ms. Palfrey asserted that her service, doing business as Pamela Martin and Associates, “functioned as a high-end adult fantasy firm which offered legal sexual and erotic services across the spectrum of adult sexual behavior.”

Mr. Tobias told ABC that he used the service for massages, not sex, according to the network’s Web site.

The State Department referred all questions to Mr. Tobias’s personal office in Indianapolis. There was no reply to a message left there on Friday night. At his Washington apartment building, the concierge said Mr. Tobias was not in.

Mr. Tobias, 65, is a former chairman and chief executive of Eli Lilly & Company and of AT&T International. He served as the chairman of the board of Duke University from 1997 to 2000. He was also a major donor to various Republican campaigns.

President Bush nominated him in July 2003 to lead a $15 billion program to fight AIDS worldwide.

At the time, some AIDS experts said Mr. Tobias did not have much experience with AIDS or Africa.

Then, as director of United States Foreign Assistance, he held the rank of ambassador.

In January 2006, Mr. Bush said he would nominate Mr. Tobias to be the administrator of the Agency for International Development. That position gave him the rank of deputy secretary of state.

The White House did not confirm the circumstances of the resignation. Dana Perino, a White House spokeswoman, said the president expressed “sadness and disappointment” that Mr. Tobias was resigning. Mr. Bush expressed appreciation for Mr. Tobias’s work here and around the world, Ms. Perino said, and “wished his family well in the future.”

Jim Rutenberg contributed reporting.

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