IMF’s Strauss-Kahn Charged With Attempted Rape in New York

May 15, 2011, 1:23 PM EDT By Karen Freifeld and Sandrine Rastello

(Adds IMF comment in the 11th paragraph.)

May 15 (Bloomberg) -- Dominique Strauss-Kahn, head of the International Monetary Fund and a potential candidate for the French presidency, was charged with attempted rape and a criminal sex act on a New York hotel maid, police said.

The attack allegedly occurred yesterday against a 32- year-old female at a Sofitel hotel in midtown Manhattan, according to an e-mailed statement by the New York Police Department. Strauss-Kahn, who was taken into custody aboard an Air France flight at John F. Kennedy International Airport, also was charged with unlawful imprisonment.

Strauss-Kahn, 62, denied the charges and will plead not guilty, his lawyer Benjamin Brafman said in an e-mailed statement. He is expected to appear in a Manhattan court later today.

The alleged victim is a maid at the hotel, New York Police Deputy Commissioner Paul Browne said. The assault occurred about 1 p.m. yesterday when the woman entered the $3,000-a-night suite -- Room 2806 -- Strauss-Kahn had checked into on May 13, Browne said in a telephone interview. Strauss-Kahn is alleged to have emerged from a bathroom naked and made two attempts to forcibly have sex with the maid, Browne said.

She managed to escape from the room and notified colleagues who called the police, Browne said. When officers arrived, Strauss-Kahn wasn’t there and his mobile phone had been left behind, he said.

East Harlem Cell

Strauss-Kahn was in the first-class section of an Air France flight when it was minutes from departing. He spent the night in a cell in an East Harlem police station, where the Special Victims Unit which handles sexual crimes is located, Browne said.

Strauss-Kahn had been scheduled to attend a meeting of euro area finance ministers in Brussels tomorrow. The meeting will take place as officials discuss the possible increase of a 110- billion euro ($155-billion) loan package to Greece amid concerns the country may be unable to return to markets to finance its debt next year.

“For the fund, this is terrible news at a time when its leadership needs to portray stability, wisdom, and confidence,” Bessma Momani, a professor in the department of political science at the University of Waterloo in Canada, who specializes in the IMF and its policies, said in an e-mail.

IMF ‘Fully Functioning’

The IMF “remains fully functioning and operational” following Strauss-Kahn’s arrest, the Washington-based organization said in a statement on its website today.

“Mr. Strauss-Kahn has retained legal counsel, and the IMF has no comment on the case; all inquiries will be referred to his personal lawyer and to the local authorities,” Caroline Atkinson, the director of external relations at the IMF, said in the statement.

John Lipsky, the first deputy managing director at the IMF, is in Washington and serving as acting managing director, IMF spokesman William Murray said today. The board will meet today to discuss the situation, Murray said.

New York police said Strauss-Kahn doesn’t have diplomatic immunity. The French Foreign Ministry in Paris said the IMF will have to examine what immunity Strauss-Kahn may have. A French consul visited Strauss-Kahn in detention late yesterday, ministry spokesman Bernard Valero said in a phone interview.

French Presidency

Strauss-Kahn, a former French finance minister and member of France’s opposition Socialist Party, has consistently been among the most popular possible candidates to contest France’s 2012 presidential election, opinion polls show.

President Nicolas Sarkozy would have trailed Strauss-Kahn by 5 percentage points in the first round of the presidential voting if the election had been held at the end of last month, a CSA poll for 20 Minutes newspaper, BFM Television and RMC radio showed April 28.

Strauss-Kahn, whose term at the IMF expires next year, has in the past several months declined to say whether he was planning to run for office. The vote will be held in April and May 2012.

Any prospect of getting elected has now has vanished, said Laurent Dubois of the Paris Political Studies Institute. “It’s a tsunami,” Dubois said in a phone interview. “There is no way he can recover from this and run for president.”

Wife’s Support

This is the second time since he took the helm of the IMF in November 2007 that Strauss-Kahn has faced allegations of misconduct.

In 2008, he had a relationship with Piroska Nagy, a female economist at the IMF, who quit in August of that year. An investigation by the IMF board, released in October 2008, concluded that while he had made a “serious error of judgment,” he shouldn’t be fired.

Strauss-Kahn apologized to his staff and family, which includes his third wife, French television journalist Anne Sinclair, and four children from his previous marriages.

Sinclair today said she doesn’t “for a second” believe the accusations against her husband, Agence France-Presse reported, citing a statement from her.

Last month, officials from the Group of 24, which includes Brazil, China and Mexico, repeated a call for “an open, transparent, merit-based process” for choosing the heads of the World Bank and IMF, “without regard to nationality.” The IMF job is traditionally held by a European, while an American leads the World Bank.

Financial Crisis

Strauss-Kahn took the helm of the IMF in November 2007, following his loss in the primaries of the French Socialist Party ahead of the 2007 presidential elections.

Strauss-Kahn, who succeeded Spain’s Rodrigo Rato, has helped reshape the agency’s mission and restore its relevance. When he arrived, its emergency lending dropped to $58.7 million in 2006 from $66.4 billion in 2002. Among his first moves there was to cut about 400 jobs.

The global financial panic triggered by the bankruptcy of Lehman Brothers Holdings Inc. in September 2008 restored the Washington-based IMF’s relevance as its emergency loans soared to a record of $91.7 billion last year from $1.1 billion in 2007.

Strauss-Kahn gained backing from the Group of 20 to triple the IMF’s resources, and the group has over the past two years given the agency a host of new missions to help avoid another crisis. The IMF is helping the G-20 single out countries whose policies threaten global growth, and has also submitted proposals to fortify the international monetary system.

European Debt Crisis

More recently, he played a key role in efforts to stem the European debt crisis which started last year in Greece, with a pledge to contribute about a third of future bailouts in the region by the European Union. The IMF has co-funded aid packages to Greece and Ireland. He was due to meet with German Chancellor Angela Merkel today.

Under Strauss-Kahn, the IMF also approved a plan that will make China the third-strongest voice in the 187-member organization, founded in 1945, while weakening Europe’s influence to make room for emerging countries.

Strauss-Kahn has juggled careers as an economics professor, lawyer and Socialist politician. He holds a law degree and a doctorate in economics from the University of Paris.

In 1986, he was elected to the National Assembly and served as industry minister from 1991 to 1993. He returned to office as finance minister under Premier Lionel Jospin in 1997. He cut France’s budget deficit to below 3 percent in 1999, the level required for euro membership.

In November 1999, he resigned as finance minister after magistrates began an investigation into financial irregularities at MNEF, a French student insurance group. The probe covered an allegation that the company had paid him about $100,000 from 1994 to 1996 for legal work on a property deal that he never performed. Strauss-Kahn denied wrongdoing and was cleared by a Paris court in November 2001.

--With assistance from Albertina Torsoli, Helene Fouquet, Vidya Root and James Hertling in Paris. Editors: Sylvia Wier, David E. Rovella

To contact the reporters on this story: Karen Freifeld in Manhattan Criminal Court at kfreifeld@bloomberg.net; Sandrine Rastello in Washington at srastello@bloomberg.net

To contact the editor responsible for this story: Mike Hytha at mhytha@bloomberg.net; Christopher Wellisz at cwellisz@bloomberg.net

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