In early 2001 the Bush Administration was preparing to nominate Wolfowitz to be Director of the CIA. Wolfowitz’s wife, Clare, wrote the President and detailed her husband’s extramarital affairs at SAIS and with Shaha Ali Riza, whom he had met while Dean at SAIS and Riza was at NED (before she joined the Bank as an employee in 1999). Clare pointed out that her husband had a sexual relationship with a non-American citizen and that he was seeking to keep these relationships "non-disclosed." Scooter Libby intercepted Clare’s letter which terminated the CIA appointment but the Administration then nominated him to be DOD Dep Sec. In retaliation, Wolfowitz unleashed his lawyers on his wife and forced her to sign a non-disclosure agreement or forego financial support.

Wolfowitz thought that he ought to be director of the CIA. But as soon as he advanced himself, his estranged wife, Clare, wrote a private letter to President-elect Bush saying that he could not be trusted.

This embittered letter remained a closely guarded secret, although a former high official of the CIA told me about it. Chris Nelson also reported it on April 16 in his widely respected, nonpartisan foreign policy newsletter: "A certain Ms. Riza was even then Wolfowitz's true love. The problem for the CIA wasn't just that she was a foreign national, although that was and is today an issue for anyone interested in CIA employment. The problem was that Wolfowitz was married to someone else, and that someone was really angry about it, and she found a way to bring her complaint directly to the President. So when we, with our characteristic innocence, put Wolfowitz on our short-list for CIA, we were instantly told, by a very, very, very senior Republican foreign policy operative, 'I don't think so.' It was then gently explained why, purely on background, of course. Why Wolfowitz's personal issues weren't also a disqualification for DOD we've never heard." The Daily Mail of London also reported on his wife's letter at the time that Wolfowitz was appointed president of the World Bank in 2005. Asked about it by the newspaper, Clare Wolfowitz did not deny it, saying, "That's very interesting but not something I can tell you about."

President-elect Bush summoned George Tenet, the holdover CIA director. "I guess this is the end," Tenet told a colleague as he headed out the door, that colleague told me. When he returned, a surprised Tenet said, "He wants me to stay until he can find someone better."

Cheney and Cheney's chief of staff, I. Lewis "Scooter" Libby, who had been Wolfowitz's Wolfowitz before he became Cheney's Cheney — his student when Wolfowitz taught at Yale and his assistant when Wolfowitz served under Cheney at the Pentagon — intervened. Cheney guided Wolfowitz to a safe harbor as deputy to Rumsfeld. But Rumsfeld was unenthusiastic and hesitated. Wolfowitz told him to decide on the spot or he would go to the United Nations, so Rumsfeld took him.

Wolfowitz and his cronies were fixated on overthrowing the government of Iraq. Richard Clarke detailed in his memoirs, Against All Enemies, how he had enormous difficulty in calling a meeting of high Bush administration officials to discuss the threat of al-Qaida in spring of 2001. When Clarke finally had the opportunity to make his case to them, Wolfowitz "fidgeted" and "scowled" and attempted to shoot him down. "I just don't understand," complained Wolfowitz, "why we are beginning by talking about this one man bin Laden." Clarke says he explained that he was talking about al-Qaida "because it and it alone poses an immediate and serious threat to the U.S."

Clarke alleges that Wolfowitz responded, "You give bin Laden too much credit," and insisted that bin Laden's success with operations such as the 1993 World Trade Center bombing would have been impossible without a "state sponsor." He added, "Just because FBI and CIA have failed to find the linkages does not mean they don't exist."

The theory that Saddam was actually behind almost all the terrorist attacks on the United States from 1993 forward had been laid out by wild-eyed crank and supposed Middle East expert Laurie Mylroie in her Study of Revenge: Saddam Hussein's Unfinished War Against America, which was published by the American Enterprise Institute (neocon central) in 2000. Peter Bergen has pointed out that the author thanks Wolfowitz and his then wife, Clare Selgin Wolfowitz, saying that Mrs. Wolfowitz had "fundamentally shaped the book," while Wolfowitz himself "provided crucial support."