Interim IMF Chief Says Strauss-Kahn's '08 Affair Was 'Serious Breach'

Since Dominique Strauss-Kahn was arrested last weekend for an alleged sexual assault on a Manhattan hotel maid, there's been attention paid to the culture at the International Monetary Fund, which he headed.

Today's New York Times includes this headline: "At I.M.F., Men On Prowl And Women On Guard."

"Some women avoid wearing skirts for fear of attracting unwanted attention," the Times reported. "Others trade whispered tips about overly forward bosses. A 2008 internal review found few restraints on the conduct of senior managers, concluding that 'the absence of public ethics scandals seems to be more a consequence of luck than good planning and action.' "

In a conversation taped for today's All Things Considered, host Robert Siegel asked acting IMF Managing Director John Lipsky about the culture at the IMF and about its handling of an affair that Strauss-Kahn had with a subordinate.

"The idea that somehow it's OK for a relationship between a supervisor and subordinate to carry on is just simply, absolutely not the case," Lipsky said.

But Strauss-Kahn was only reprimanded in 2008, not dismissed, Robert noted. Did that indicate his actions were OK?

"I don't think it was decided as OK," Lipsky said. "It was [deemed] a serious breach of judgment."

John Lipsky on the IMF culture

During the interview, Robert also talked with Lipsky about the search for a new IMF managing director. Lipsky said there will be an "open" process as the search continues, and that he understands that means candidates from outside Europe — which by tradition has been the source for IMF chiefs — will be seriously considered.

Reuters reports that European leaders are pushing for French Economy Minister Christine Lagarde to get the job.

Lipsky and Robert also discussed global economic conditions. According to Lipsky, "global growth ... in the past year was about 5 percent at an annual rate. That's relatively strong."

But, he added, "the advanced economies grew on average 2.5 percent. That's just not fast enough to make a big dent in ... unemployment." Emerging economies, meanwhile, grew about 6.5 percent and many have "inflation pressures."

"We hope the recovery can be strengthened through a cooperative set of policy adjustments," he said, in which the emerging economies "shift the source of their growth" from exports to "domestic demand," while the U.S. and other major economic powers focus more on exports.

John Lipsky on the economy

Much more from their conversation is due on today's All Things Considered. Click here to find an NPR station that broadcasts or streams the show. Later, we'll add the as-broadcast version of the interview to the top of this post.

Update at 3:15 p.m. ET. The Times reports that Strauss-Kahn "must find another place to stay when he leaves his Rikers Island jail cell because the Upper East Side building where his wife had rented an apartment will not accept him, a court official said on Friday."

He is to be released to "house detention" and after posting $1 million bail.



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