Probe clears IMF chief Strauss-Kahn in affair

The International Monetary Fund's board on Saturday cleared Managing Director Dominique Strauss-Kahn of harassment, favoritism and abuse of power following an inquiry into his affair with an IMF economist.

While the board stopped short of disciplinary action, its leader, Shakour Shaalan, acknowledged there was concern among female staff about Strauss-Kahn's behavior.

Shaalan said he personally warned Strauss-Kahn, a former French finance minister, against further improper conduct. He said the board had accepted Strauss-Kahn's apology.

"The executive board noted that the incident was regrettable and reflected a serious error of judgment on the part of the managing director," the IMF board, which represents the fund's 185 members, said in a statement.

"The personal conduct of the managing director sets an important tone for the institution and, as such, must be beyond reproach at all times," it added.

The investigation by an outside lawyer retained by the IMF board found Strauss-Kahn conducted a brief, consensual affair in January 2008 with Piroska Nagy, who worked in the IMF's Africa department as a senior economist until she took a staff buyout in August.

The inquiry began after a complaint by a third person.

The IMF board sought to deal with the investigation quickly so as not to distract the IMF from its role in dealing with the global financial crisis that has sent markets plunging on fears that the world economy is in for a long and deep recession.

Several emerging market economies have sought IMF advice and financing in recent weeks to help them through the crisis.

In a statement, Strauss-Kahn repeated an earlier apology to the board, blaming his actions on a serious error of judgment.

Agencies

(China Daily 10/27/2008 page8)