IMF Chief Charged With Assaulting Hotel Maid

International Monetary Fund Director Dominique Strauss-Kahn was denied bail Monday after an appearance in a New York City courtroom on sexual assault charges. His lawyers argued he was not a flight risk, but prosecutors said Strauss-Kahn had little motivation to return to court to answer the charges. The IMF issued a statement saying the incident won't have any impact on bailout decisions that need to be made in coming days.

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The head of the International Monetary Fund will have to stay in jail at least until Friday. Dominique Strauss-Kahn, one of France's most powerful politicians, was arrested over the weekend and charged with sexually assaulting a maid at a Manhattan hotel. Strauss-Kahn's lawyers denied the charges. And today, a New York judge refused to give Strauss-Kahn bail. The arrest throws the presidential race in France into disarray.

And as NPR Jim Zarroli reports, it raises questions about the IMF's efforts to resolve Europe's ongoing financial crisis.

JIM ZARROLI: Prosecutors had argued that Strauss-Kahn should be kept in jail, because they said if he fled the country they would have virtually no way of forcing him to return, and the judge agreed. Afterwards, Strauss-Kahn's lawyer, Benjamin Brafman, told the crowd of reporters outside the courthouse that he would review the judge's move. And he reminded reporters that Strauss-Kahn was still innocent until proven guilty.

Mr. BENJAMIN BRAFMAN (Attorney for Dominique Strauss-Kahn): And I would ask all of you to please allow him the presumption of innocence, so we can hopefully still get a fair trial when that happens.

ZARROLI: Police arrested Strauss-Kahn on Saturday afternoon, while he was sitting on a plane preparing to take off for Paris. The crime he's accused of allegedly took place hours earlier at a hotel near Times Square. Police say Strauss-Kahn sexually assaulted a hotel maid who had come to his suite to clean. The maid has been identified as a 32-year-old immigrant from Guinea and a mother of two.

Today, Strauss-Kahn's troubles seemed to multiply. A journalist in France said she may file a complaint against Strauss-Kahn for attempting to assault her a decade ago. Tristane Banon talked about the incident on French TV a few years ago, but the station bleeped out Strauss-Kahn's name.

(Soundbite of an interview)

Ms. TRISTANE BANON: (French language spoken)

ZARROLI: Banon said she had gone to an apartment to interview Strauss-Kahn when he began trying to remove her clothes, but she was able to fight him off. Banon - whose mother is, like Strauss-Kahn, a Socialist party official - decided not to press charges at the time. But she said the incident in New York had freed her to talk about the assault.

Strauss-Kahn is widely considered to be a top candidate for the presidency of France next year. He is the country's former finance minister and a frequent commentator on economic matters. Here he is in a TV interview from last year.

Dr. DOMINIQUE STRAUSS-KAHN (Managing Director, IMF): Of course, there is a cost to go on with the stimulus too long. And we have to take care about debt sustainability that has increased in most countries and...

ZARROLI: Strauss-Kahn became head of the IMF at one of its most challenging times. The organization has played a lead role in helping to bail out Greece and other struggling European countries.

Eswar Prasad of Cornell University says Strauss-Kahn has negotiated with European officials and persuaded them to back the bailouts.

Professor ESWAR PRASAD (Cornell University): Among senior international policymakers, like finance ministers and central bank governors, Dominique Strauss-Kahn really had the status of a rock star. Unlike previous managing directors, he was really seen as the first among equals, as somebody who had the stature to essentially bring them all together.

ZARROLI: The IMF issued a statement this weekend saying it remained fully functioning and operational. And Prasad, who is himself a former IMF official, said he had no doubt that was true.

Prof. PRASAD: Most of the work the fund does, including its lending operations, are mostly technical matters. And for all those technical matters, the staff are perfectly equipped to do this on their own. But the big question is what happens when decisions have to be taken that have more than an economic element to them, and that have a very large political element to them.

ZARROLI: For the time being, Strauss-Kahn will be succeeded by his number two man, American John Lipsky. But Lipsky has said he plans to leave the agency this summer. Strauss-Kahn's arrest on Saturday has come at a bad time for the agency he heads.

Jim Zarroli, NPR News.

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