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Former IMF chief to leave jail

Text by News Wires

Latest update : 2011-05-20

Former IMF head Dominique Strauss-Kahn leaves jail Friday after a Manhattan court granted him bail for $1 million cash and a $5 million bond. He will be monitored electronically under 24-hour home detention until his arraignment June 6.

REUTERS - Former IMF chief Dominique Strauss-Kahn will leave jail on bail on Friday under the shadow of sexual assault charges as another French official, Christine Lagarde, builds support to succeed him.

Strauss-Kahn, a global high-flier seen as having a strong shot at the French presidency until his arrest over the weekend, spent the last of four nights at New York’s notorious Rikers Island jail on Thursday.

The package of conditions set by a judge on Thursday to let him leave jail -- $1 million cash bail, a $5 million insurance bond and house arrest at a New York apartment under armed guard and electronic monitoring—was due to be signed on Friday.

In his letter resigning as the International Monetary Fund chief, Strauss-Kahn vowed to fight charges he tried to rape a hotel maid and committed other sexual offenses against her.

Once out of the Rikers cell and in the apartment, he will have unlimited access to his lawyers to prepare his defense and will be joined by his wife and daughter.

Strauss-Kahn’s resignation intensified a race for global finance’s top job at a critical time for the IMF as it helps euro-zone states such as Greece, Ireland and Portugal deal with massive debt problems.

The managing director post has traditionally gone to a European for 65 years but is now in the sights of fast-growing developing economies who argue it is time for a change.

John Lipsky, the IMF’s American No. 2 who is now the acting chief, said on Thursday members agreed “the process of selection of the managing director should be open, transparent and merit-based.”

But a sense of inevitability was growing that Europe would retain the post. Lagarde, France’s finance minister, was seen as the most likely choice.

While U.S. Treasury Secretary Timothy Geithner called for an “open process that leads to a prompt succession,” sources in Washington said the United States, the IMF’s biggest financial contributor, would back a European.

The issue will probably be discussed at a summit of Group of Eight leaders in France next week. Together, the United States and European nations hold more than half of the IMF’s voting power, giving them a big say over who leads it.

The IMF board was due to hold a regular meeting on Friday to approve its part of a 78 billion euro bailout for Portugal but it was unclear whether it would discuss the process for choosing a new managing director.


Testing tradition

The case marks a spectacular fall for Strauss-Kahn, who was highly regarded for his part in tackling the global financial crisis of 2007-09 and the key role he was playing in efforts to manage Europe’s debt crisis.

His lawyer Benjamin Brafman said at a hearing on Monday the evidence “will not be consistent with a forcible encounter.”

The lawyers: key players in the DSK case

But prosecutor John McConnell said the maid who accuses Strauss-Kahn of trying to rape her, a 32-year-old immigrant from Guinea, had told a “compelling and unwavering story.”

An arraignment hearing is set for June 6, when Strauss-Kahn will formally answer the charges, but a trial may be six months or more away. If convicted, he could face 25 years in prison.

“I deny with the greatest possible firmness all of the allegations that have been made against me,” Strauss-Kahn wrote in his resignation letter.

A Reuters poll of economists showed 32 of 56 thought Lagarde was most likely to succeed Strauss-Kahn.

Lagarde declined to say whether she was interested in the post but told reporters: “Any candidacy, whichever it is, must come from Europeans jointly, all together.”

A head of the U.S. law firm Baker & McKenzie in Chicago before she joined the French government in 2005, Lagarde is a fluent English speaker and has experience balancing the demands of rich and developing countries.

But she is also under scrutiny.

Judges at a special French court are expected to decide in mid-June whether to order an inquiry after a public prosecutor recommended Lagarde be investigated over an arbitration case involving businessman and former politician Bernard Tapie.

The prime ministers of Italy and Luxembourg publicly backed Lagarde on Thursday. Diplomats in Europe and Washington said she also had support from France, Germany and Britain—the three biggest European economies.

China and Japan called for a transparent process to choose a successor on merit.

Russia and other ex-Soviet states backed the Kazakh central bank chief, Grigory Marchenko. Another possible candidate could be former Turkish Economy Minister Kemal Dervis, an economist with IMF experience.

But it was not clear whether emerging countries could unite behind a rival candidate.
 

Date created : 2011-05-20

  • JUSTICE

    Strauss-Kahn requests release from New York jail

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  • FINANCE

    French minister favoured as Europe bids to keep IMF head

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