Oh my, another one

Remember the World Bank-Wolfowitz scandal when the man who tried to clear out the corruption of that organization (the Augean Stables had nothing on that problem) was forced to resign because of misdemeanours of which he was subsequently cleared by all enquiries?

Well, can we expect the same at the IMF where Dominique Strauss-Kahn "is under investigation for what he delicately calls an 'incident which occurred in my private life'. The 'incident' involves former senior IMF economist Piroska Nagy, with whom Mr. Strauss-Kahn had a brief sexual liaison earlier this year until Ms. Nagy's husband found out about it".

As Mr Strauss-Kahn is merely a French politician and not a supporter of the war in Iraq and is unlikely to want to look too closely into some of the curious deals transnational organizations do, the chances of him suffering Paul Wolfowitz's fate are slim.

Mr. Strauss-Kahn has apologized to the IMF staff while insisting that "at no time did I abuse my position" in his dealings with Ms. Nagy, and that might be true. Then again, the managing director seems to have kept his relationship a secret from most of his own board of directors, even after a formal investigation was begun at the behest of one board member in August. The final
judgment will rest with the full board once a report is delivered at the end of this month.

The judgment will tell us something about whether the IMF board -- particularly its nine European members -- will exhibit the same outrage toward Mr. Strauss-Kahn as their World Bank counterparts did last year during the staff coup that ousted former president Paul Wolfowitz. We won't hold our breath, even though Mr. Wolfowitz's purported offenses pale next to what we already know about l'affaire Strauss-Kahn.

Unlike Mr. Strauss-Kahn, Mr. Wolfowitz disclosed his personal relationship with a staff member prior to becoming Bank president and sought to recuse himself from making any decision regarding her next job assignment. A misnamed Ethics Committee nevertheless foisted that decision upon him but later disavowed its own ruling when it became politically convenient to do so. The Bank's European board members then sought to run Mr. Wolfowitz out of the bank
in kangaroo-court proceedings while piously claiming to be safeguarding the institution's reputation.

Mr. Wolfowitz's real sins had everything to do with his tough-on-corruption policies, as well as his previous role in the Bush Administration as deputy secretary of defense. In its report Sunday on Mr. Strauss-Kahn, the New York Times noted that "Mr. Wolfowitz's ouster was fueled . . . also by a visceral dislike many at the agency felt for a major backer of the Iraq war." Now they tell us.

By contrast, Mr. Strauss-Kahn is a paladin of the European establishment, a former finance minister of France and a leader of its Socialist Party. Not surprisingly, he is also popular with the IMF staff. So we also won't hold our breath for a stream of invidious staff leaks about the managing director of the kind that were aimed at Mr. Wolfowitz, much less one-sided "news" from the European court stenographers at the Financial Times. We may hear, however, that the IMF can't afford to be "distracted" by some purely personal issue at this moment of global crisis.

This should be interesting, especially in the light of Supergordy Brown's proposal to give more powers to the IMF over the international financial and banking system. Incidentally, Irwin Stelzer says that anyone who believes the United States will agree to that harebrained scheme (my expression not his) should get in touch with him as he has a bridge to sell.