15 May 2011

IMF chief Strauss-Kahn charged over ‘sex attack’

International Monetary Fund Managing Director Dominique Strauss-Kahn is arrested at JFK Airport in New York in connection with an alleged sexual assault on a hotel maid.

Mr Strauss-Kahn was removed from an Air France plane on Saturday and taken into custody by two New York Port Authority detectives, 10 minutes before the flight for Paris was due to take off, according to New York Police Department spokesman Paul Browne.

A 32-year-old chambermaid had earlier filed a complaint against the banker after fleeing the scene of the alleged incident, a suite at New York’s Sofitel hotel in Times Square.

“The NYPD realised he had fled. He had left his cell phone behind,” Paul Browne said. “We learned he was on an Air France plane. They held the plane and he was taken off and is now being held in police custody for questioning.”

Brian Sessa, also of the NYPD, told reporters last night the anticipated charges were attempted rape, a criminal sex act, and unlawful imprisonment. Mr Strauss-Kahn does not enjoy diplomatic immunity (see video above).

Lawyer Benjamin Brafman, who says is will be representing the Frenchman, told the New York Times: “We have not yet been able to meet with our client, and we may have more to say tomorrow. Reuters has quoted an email from Mr Brafman in which the lawyer says his client “will plead not guilty”.

A less doctrinaire IMF

The big picture is probably much more impactful on French politics and President Sarkozy than on the global economy, writes Channel 4 News Economics Editor Faisal Islam.

He's a credible candidate from the Socialist Party to beat Sarkozy, and Sarkozy regularly manoeuvres to try to limit his popularity in France.

However, you did see his influence after the economic crisis. For example, after the Lehman Brothers crash, really for the first time the IMF talked about using fiscal policy to pump-prime the economy.

The IMF is also far less doctrinaire about what became known as the "Washington consensus" on economics - free markets, unrestricted capital markets, privatisations etcetera.

As countries like Brazil, India and China have asserted their financial power, Strauss-Kahn has adapted the modus operandi of the IMF away from its US Treasury roots.

If he had announced a bid for the French presidency, he was probably would have been a few months away from leaving the IMF in any events.

But it does focus minds on the debate over his succession, and it has been typical to carve up the IMF job for Europe whilst the World Bank President is an American. This arrangement is unsustainable, given the change in the balance of financial power.

Possible presidential candidate

Dominique Strauss-Kahn, who is 62, took over at the International Monetary Fund – the international institution that oversees the global financial system – in November 2007. Before that, he was a member of the French National Assembly and an economics professor at the Institut d’Etudes Politiques de Paris.

He was been considered a possible Socialist Party candidate in next April’s French presidential election. Polls in France have consistently shown him as a front-runner to defeat the presidential incumbent, Nicolas Sarkozy.

In 2006 he lost out to Socialist Party rival Segolene Royal in the contest to select an opposition candidate to stand against Mr Sarkozy in the 2007 presidential race.

In 2008, Mr Strauss-Kahn was investigated by the IMF over possible abuse of power after a brief affair with a female economist at the fund who was his subordinate. The inquiry cleared him of abusing power and harassment, and he subsequently apologised for a “serious error of judgement”.

His wife, the American-born Anne Sinclair, is famous in France as a radio and TV interviewer. Mr Strauss-Khan has been married three times.