May 27, 2024

Atop I.M.F., Contradiction and Energy

Considered the Socialist party’s leading candidate for president of France, Mr. Strauss-Kahn identified three threats to his aspirations in an interview with the newspaper Libération, held on April 28 but published only this week. “Money, women and my Jewishness,” he said. “Yes, I like women,” he went on. “So what?”

Mr. Strauss-Kahn added, “For years they’ve been talking about photos of giant orgies, but I’ve never seen anything come out.”

Today, Mr. Strauss-Kahn sits in a jail cell on Rikers Island in New York, his reputation — and any political ambitions — perhaps irreparably tarnished by his arrest on charges of attempted rape of a hotel maid in Manhattan last weekend.

It is a humbling comedown for Mr. Strauss-Kahn, whose rise on the world stage has been marked by contradictions.

As managing director of the International Monetary Fund in Washington since late 2007, Mr. Strauss-Kahn has returned the agency to relevance by helping engineer a $1 trillion bailout for Europe — but only after an initial humiliation when he was reprimanded for a brief affair in 2008 with a subordinate.

A prominent Socialist, he has held powerful positions in previous French governments despite his wealth, lavish lifestyle and his reputation as a womanizer.

A man with an impressive intellect, great charm and restless energy, his flaws have been accepted because of his accomplishments. “Even the chatter about women was discounted enormously by everyone around him,” said Steven C. Clemons, director of the American Strategy program at the New America Foundation who first met Mr. Strauss-Kahn in 1998 and was impressed by his forceful personality.

“I don’t think there was a conspiracy of silence,” Mr. Clemons said. “The discussion I always heard about him was he’s one of the titans, that he’s such an extraordinarily different person, that rules don’t apply to him in the same way.”

One former I.M.F. official said that, had Mr. Strauss-Kahn been a less senior person, he might been fired or at least “sent to Siberia” because of the affair with his underling. He survived an investigation, in part, this person said, because the culture at the I.M.F. dictated “no rules” for the managing director and because there was little appetite to rid the agency of a charismatic and effective leader when an international financial crisis looming.

Mr. Strauss-Kahn arrived at the I.M.F. at what would be an opportune time for him and the agency, which had become an international organization with little clout since the Southeast Asia financial crisis in the mid 1990s. A former finance minister for France in the late 1990s, he had a deep knowledge of international economics and was on a first-name basis with most of Europe’s top leadership.

He played a pivotal role as Europe’s debt crisis deepened last May, and leaders were deadlocked over what to do. In midnight phone calls, Mr. Strauss-Kahn pressed them to take action. Quickly, he urged, before things got worse. His insistence helped overcome their hesitance, and they agreed to a set up a $1 trillion rescue package to help Greece and other troubled countries, with the I.M.F. contributing to the bailout fund. And as countries like Germany pushed for harder austerity terms, he was consistently vocal in saying that could backfire by slowing economic growth too much — which seems to be the case in Greece today.

“The only real strength of the I.M.F. is the ruthlessness of truth-telling,” Mr. Strauss-Kahn said at the time.

“Early on, the Europeans were in complete denial. I think his main accomplishment will go down as persuading them that they had to deal with Greece before it was too late. And he did that not by bullying them, not by banging the table, but much more by coaxing and persuading them,” said Simon Johnson, who was the I.M.F.’s chief economist from March 2007 to August 2008.

It was a seminal triumph for the I.M.F. and a moment to savor for Mr. Strauss-Kahn, who was already winning plaudits after the inauspicious start resulting from the affair.

Sheryl Gay Stolberg, Graham Bowley and Binyamin Appelbaum contributed reporting.

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