By AFP,
Washington : International Monetary Fund head Dominique Strauss-Kahn was cleared Saturday of abuse of power accusations stemming from an affair he had with an IMF economist but was faulted by the fund’s board for “a serious error of judgment.”
Based on an independent external inquiry, the board said in a statement it “has concluded that there was no harassment, favoritism, or any other abuse of authority by the managing director.
“Nevertheless, the executive board noted that the incident was regrettable and reflected a serious error of judgment,” it said.
In a teleconference with the press, IMF executive director Shakour Shaalan said that the board had unanimously accepted Strauss-Kahn’s apologies and that it would continue to work with him.
“The mood of the board was very, very positive,” he said after it met Saturday on the case.
“Our conclusion was that this in no way affects the effectiveness of the managing director.” “The managing director is very competent in carrying out his job. This was an unfortunate incident; the board has accepted his apologies.” Shaalan acknowledged that many in the IMF staff, especially women, “are not at all happy” with Strauss-Kahn’s behavior.
“The managing director has expressed his regrets, I don’t think that we can ask him to do more at this time,” he said. “We will continue to work with him. If there is some confidence that has been lost, he will regain it very soon.” Strauss-Kahn, 59, considered one of the preeminent European political figures on economic matters, was appointed in September 2007 to head the IMF and help reform the institution.
The French former political star earlier admitted he had an extramarital affair with Hungarian-born economist Piroska Nagy, but denied that he had harassed her and rejected suggestions she was given a more generous severance package than merited when she left the IMF in August.
But the sex scandal cast doubt within and outside the key global institution on Strauss-Kahn’s judgment, breaking just as the IMF confronts the world’s deepest financial meltdown since the Great Depression of the 1930s. In a statement Saturday Strauss-Kahn said he had apologized to the board, IMF staff and his family for his behavior.
“I agree with the statement made by the executive board today in concluding its inquiry,” Strauss-Kahn said. “I very much regret the incident and I accept responsibility for it,” he said.
He added that he is “committed, going forward, to uphold the high standards that are expected of this position.” According to the outside inquiry into the affair, which involved 28 interviews including with the key people involved, he engaged in “a consensual physical relationship of short duration” with Nagy in January 2008.
The inquiry, by Washington law firm Morgan, Lewis & Bockius, found no evidence either that Strauss-Kahn had offered or arranged for work-related benefits for Nagy, or that he had threatened her in any way.
It said Nagy, who left the IMF in August to join the European Bank for Reconstruction and Development, had insisted that she made the decision to leave on her own and left as a part of the IMF’s ongoing voluntary separation program.
The fund slashed about 600 positions at the time.
It also said that Strauss-Kahn played no part in arranging her remuneration package in the separation program.