Sex scandal at the IMF?

KAREN BLEIER/AFP/Getty Images Is this what we really need right now? The world economy fell off the fence, and just as finance ministers, the World Bank, and the International Monetary Fund (IMF) start trying to put it back together again… a sex scandal threatens to debilitate the managing director of the IMF. Late last week, ...

By , International Crisis Group’s senior analyst for Colombia.
591980_081020_strausskahn2.jpg
591980_081020_strausskahn2.jpg

KAREN BLEIER/AFP/Getty Images

Is this what we really need right now? The world economy fell off the fence, and just as finance ministers, the World Bank, and the International Monetary Fund (IMF) start trying to put it back together again... a sex scandal threatens to debilitate the managing director of the IMF.

Late last week, the Wall Street Journal began looking into an affair that has rocked the (usually dry) halls of one of the world's most important financial institutions. IMF chief Dominique Strauss-Kahn is being accused of abusing his power as director of the fund in a sexual relationship with colleague Piroska Nagy, the wife of a former Argentinian central banker, Mario Blejer. According to Bloomberg news, an official IMF inquiry "will seek to determine whether the relationship involved any conflict of interest, harassment or favoritism."

KAREN BLEIER/AFP/Getty Images

Is this what we really need right now? The world economy fell off the fence, and just as finance ministers, the World Bank, and the International Monetary Fund (IMF) start trying to put it back together again… a sex scandal threatens to debilitate the managing director of the IMF.

Late last week, the Wall Street Journal began looking into an affair that has rocked the (usually dry) halls of one of the world’s most important financial institutions. IMF chief Dominique Strauss-Kahn is being accused of abusing his power as director of the fund in a sexual relationship with colleague Piroska Nagy, the wife of a former Argentinian central banker, Mario Blejer. According to Bloomberg news, an official IMF inquiry “will seek to determine whether the relationship involved any conflict of interest, harassment or favoritism.”

Strauss-Kahn denies misusing his position. His wife, Anne Sinclair, writes on her blog, “Everyone knows these are things that can happen in the lives of any couple. To me, this one-night stand is behind us. We have turned the page” (my translation from the French).

Unfortunately for Ms. Sinclair, journalists around the world are just starting to write the page.

That’s particularly true in France, where some commentators have worried that the public disclosure of the IMF’s investigation is a move to discredit French-led efforts to stem the financial crisis. President Nicolas Sarkozy seems to be among the angry, irked that his frantic efforts to organize an economic rescue might be discredited. 

Quel dommage! At least among some French commentators, the mood is forgiving. Asked by Le Figaro newspaper if such an affair would produce a media scandal in France, Christophe Deloire (author of Sexus Politicus) responded (my translation): 

Certainly not. There are things that one can do in Paris but not in Washington… in France, such an affair… would never have seen the light of day…

I hope that the purely private affaire will not become an incident for Dominique Strauss-Kahn… [Politicians] always feel obligated to make the public believe that they have a stable private life… the last presidential compaign is a very good example: the difficulties between the couple of Nicolas Sarkozy on the one hand and Ségolène Royal on the other hand stayed secret. It wasn’t until after the scrutiny that the two couples separated…”

The greatest sin, it seems, wasn’t the affair, but the fact that Strauss-Kahn got caught, and French credibility will go down in the fallout. Alors, c’est la vie!

Elizabeth Dickinson is International Crisis Group’s senior analyst for Colombia.

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