May 18, 2022

I.M.F. Names Replacement as Chief Is Picked Out of Lineup

Mr. Lipsky, the I.M.F.’s first deputy managing director, is a former U.S. Treasury executive and onetime banker at JP Morgan. William Murray, an I.M.F. spokesman, said that Mr. Lipsky, who has been overseeing the logistics of the bailout of the Greek economy, would meet with members of the I.M.F. board in Washington later in the day, according to Reuters.

“In line with standard I.M.F. procedures, John Lipsky, first deputy managing director, is acting managing director while the M.D. is not in D.C.,” Mr. Murray said in a statement. “Mr. Lipsky will chair the informal Board session today.”

Mr. Strauss-Kahn, 62, was awaiting arraignment on Sunday evening in Manhattan. The New York Police Department formally arrested him at 2:15 that morning “on charges of criminal sexual act, attempted rape, and an unlawful imprisonment in connection with a sexual assault on a 32-year-old chambermaid in the luxury suite of a Midtown Manhattan hotel yesterday” about 1 p.m., Deputy Commissioner Paul J. Browne, the department’s chief spokesman, said.

Meanwhile, the woman who told the police she was sexually attacked by Mr. Strauss-Kahn picked him out of a police lineup Sunday. After making the identification, she left in a police van amid a gaggle of reporters.

Reached by telephone, Benjamin Brafman, a lawyer, said he would be representing Mr. Strauss-Kahn with William Taylor, a lawyer in Washington.

Early Sunday morning, Mr. Brafman said that his client “will plead not guilty.”

Mr. Strauss-Kahn was widely expected to become the Socialist candidate for the French presidency, was apprehended by detectives of the Port Authority of New York and New Jersey in the first-class section of the jetliner, and immediately turned over to detectives from the Midtown South Precinct, officials said.

Mr. Strauss-Kahn, a former French finance minister, had been expected to declare his candidacy soon, after three and a half years as the leader of the fund, which is based in Washington. He was considered by many to have done a good job in a period of intense global economic strain, when the institution itself had become vital to the smooth running of the world and the European economy.

His apprehension came at about 4:40 p.m. at Kennedy Airport, when two detectives of the Port Authority suddenly boarded Air France Flight 23, as the plane idled at the departure gate, said John P. L. Kelly, a spokesman for the agency.

“It was 10 minutes before its scheduled departure,” Mr. Kelly said. “They were just about to close the doors.”

Mr. Kelly said that Mr. Strauss-Kahn was traveling alone and that he was not handcuffed during the apprehension.

“He complied with the detectives’ directions,” Mr. Kelly said.

The Port Authority officers were acting on information from the Police Department, whose detectives had been investigating the assault of a female employee of Sofitel New York, at 45 West 44th Street, near Times Square. Working quickly, the city detectives learned he had boarded a flight at Kennedy Airport to leave the country.

Though Mr. Strauss-Kahn received generally high marks for his stewardship of the fund, his reputation was tarnished in 2008 by an affair with a Hungarian economist who was a subordinate there. The fund decided to stand by him despite concluding that he had shown poor judgment in the affair. Mr. Strauss-Kahn issued an apology to I.M.F. employees and to his wife, Anne Sinclair, an American-born French journalist.

In his statement then, Mr. Strauss-Kahn said, “I am grateful that the board has confirmed that there was no abuse of authority on my part, but I accept that this incident represents a serious error of judgment.” The economist, Piroska Nagy, left the fund as part of a buyout of nearly 600 employees instituted by Mr. Strauss-Kahn to cut costs.

In the New York case, Mr. Browne said that it was about 1 p.m. on Saturday when the maid, a 32-year-old woman, entered Mr. Strauss-Kahn’s suite — Room 2806 — believing it was unoccupied. Mr. Browne said that the suite, which cost $3,000 a night, had a foyer, a conference room, a living room and a bedroom, and that Mr. Strauss-Khan had checked in on Friday.

As she was in the foyer, “he came out of the bathroom, fully naked, and attempted to sexually assault her,” Mr. Browne said, adding, “He grabs her, according to her account, and pulls her into the bedroom and onto the bed.” He locked the door to the suite, Mr. Browne said.

“She fights him off, and he then drags her down the hallway to the bathroom, where he sexually assaults her a second time,” Mr. Browne added.

At some point during the assault, the woman broke free, Mr. Browne said, and “she fled, reported it to other hotel personnel, who called 911.” He added, “When the police arrived, he was not there.” Mr. Browne said Mr. Strauss-Kahn appeared to have left in a hurry. In the room, investigators found his cellphone, which he had left behind, and one law enforcement official said that the investigation uncovered forensic evidence that would contain DNA.

William K. Rashbaum and Colin Moynihan contributed reporting.

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I.M.F. Talks in Greek Crisis at Key Juncture

After last year’s rescue of Greece, I.M.F. and European officials have now, for the most part, accepted that Greece will require another 60 billion euros in aid in order to see it through 2012 and 2013.

Dominique Strauss-Kahn, the I.M.F. managing director, who was taken off an airplane destined for Paris and charged with attempted rape, had been reportedly due to meet on Sunday with the German chancellor, Angela Merkel, and to attend meetings in Brussels on Monday with European finance ministers ostensibly to discuss Portugal’s economic crisis.

With the interest rates on Greek bonds continuing to soar, pressure has been building on Europe and Greece to announce a new program within the next week or so.

As of early Sunday, the I.M.F. board had yet to meet, and board members were still digesting the shock of Saturday’s news. One board member who spoke on the condition of anonymity said that it was way too early to consider who might succeed Mr. Strauss-Kahn, if he were to resign. He added that for the time being, the fund’s business would be run as it always is when the managing director is out of town — by its No. 2 executive, John Lipsky, a former U.S. Treasury executive and onetime banker at JP Morgan who has been overseeing the logistics of the Greek program. As first deputy managing director, Mr. Lipsky might assume Mr. Strauss-Kahn’s responsibilities during the criminal investigation.

But the Washington rumor mill has already begun to churn out names of candidates from non-European countries, including Kemal Dervis, a senior official at the Brookings Institute and a former Turkish finance minister, and Mohamed A. El-Erian, the chief executive office of PIMCO, the bond fund giant. 

For the past week, the I.M.F.’s senior executive in charge of Greece, Poul M. Thomsen has been meeting, along with executives from the European Union and the European Central bank, with government officials in Greece. The fund also has two technical experts who have been working for the past year within the Greek finance ministry.

But any cooperation has been spotty at best, say people briefed on the situation, as Greek bureaucrats tend to view the I.M.F. as “spies” working for Brussels and Washington. Some of those briefed on the discussions described them as “tense” and “edgy.”

The Greek public has also been looking with more disdain toward Prime Minister George Papandreou and his association with the I.M.F. Reports in Greek newspapers that Mr. Papandreou and Mr. Strauss-Kahn had engaged in private discussion months before the 110 billion euro rescue last year have just added to the view that I.M.F. technocrats are responsible for Greece’s economic problems.

Fund experts, meanwhile, are frustrated that Greek politicians are delaying key reforms such as more privatization, cuts in public sector employment and more flexibility for private sector employers to hire and fire workers. The Greeks contend that they can do only so much and that to push any faster on austerity measures would make the recession even worse. 

Nevertheless, it is also true that many Greeks also understand that radical changes must be undertaken and that while Europe’s and the I.M.F.’s demands are painful, Greece has little choice.

“This could not come at a worse time,” said Yannis Stournaras, an economist and head of an economic consulting group in Athens. “It affects the image of the I.M.F. — but most Greeks still believe that without the I.M.F. and Europe, Greece would be doomed.”

People familiar with the I.M.F.’s internal workings say that while Mr. Strauss-Kahn has been the public voice from the fund on Greece, internally it has been Mr. Lipsky. But Mr. Lipsky’s term is up in August, and pressure will be on the fund’s board to find a replacement.  Mr. Devis and Mr. El-Erian were again considered possible successors.

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