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Rice deputy quits after escort service query

Coordinated US foreign aid

Randall L. Tobias spoke with reporters at the Stockholm Conference for Lebanon's Early Recovery in this Aug. 31, 2006, file photo. He resigned, citing personal reasons. (ASSOCIATED PRESS)

WASHINGTON -- Randall L. Tobias, the deputy secretary of state responsible for US foreign aid, abruptly resigned yesterday after he was asked about an upscale escort service allegedly involved in prostitution, US 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 obtain massages, not sex.

Tobias has been Secretary of State Condoleezza Rice's point man in an ambitious effort to overhaul how the US government manages foreign aid. 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."

State Department spokesman Sean McCormack said Tobias informed Rice "today that he must step down as director of US Foreign Assistance and US Agency for International Development Administrator effective immediately. He is returning to private life for personal reasons."

Contacted last night at his home here in Washington, Tobias, a former chief executive of pharmaceutical company 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.

State Department officials declined to comment further on the reasons for Tobias's resignation.

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 US foreign assistance, with the rank of deputy secretary, giving him the task of running USAID and coordinating all foreign aid so that the delivery of aid would more closely follow the administration's policy goals.

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 lawyer, Montgomery Blair Sibley, said 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. 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.

Tobias attended a luncheon at the State Department on Wednesday with Undersecretary of State Karen Hughes and actress Angelina Jolie, who was in the capital to press for more US education aid for developing countries