Strauss-Kahn faces fresh allegations

FT.com – May 16, 2011

Dominique Srauss-Kahn is facing a possible second investigation into claims of sex crimes after a lawyer acting for a French woman said his client was likely to make a complaint over an alleged sexual assault by the International Monetary Fund chief in 2002.

Tristane Banon, a 31-year-old novelist, “envisages lodging a complaint” with the police, her lawyer David Koubbi told Agence France Presse on Monday.

Ms Banon alleges the head of the International Monetary Fund attacked her during an interview in an empty apartment in 2002. She was dissuaded from reporting the incident by her mother, a Socialist councillor in the Normandy region, Mr Koubbi said.

Mr Strauss-Kahn is expected to be arraigned at the New York Criminal Court later on Monday after he allegedly attacked a 32-year-old maid at a luxury hotel in Manhattan on Saturday. Mr Strauss-Kahn was charged by police on Saturday with a criminal sex act, attempted rape and unlawful imprisonment of the maid.

Police said on Sunday night that the maid had picked Mr Strauss-Kahn out of a line-up. Mr Strauss-Kahn denies wrongdoing.

French media, citing Mr Strauss-Kahn’s lawyers, on Monday said the IMF chief had checked out of the hotel at around 12.28, an hour before the alleged assault and had lunch with his daughter in a New York restaurant.

The allegations against Mr Strauss-Kahn have sent shockwaves through the French establishment, where his bid for the Socialist party’s presidential nomination was widely expected next month. His presidential ambitions now appear to be over whatever the outcome of the charges against him.

His political allies on Monday were reeling at the images of a handcuffed IMF chief led in for police questioning the previous evening. Manuel Valls, a leading socialist lawmaker, said the images of him under police escort were of an “unbearable brutality”.

Ms Banon’s allegations were first made openly in 2007, in a late night televised debate programme called 93, Faubourg Saint-Honoré. Mr Strauss-Kahn’s name was cut out of the broadcast and the story was never followed up by French media.

On the programme, Ms Banon described an interview with a well-known politician who arranged to meet her in an empty apartment and proceeded to molest her.

According to Mr Koubbi, Ms Banon had felt under pressure not to reveal the alleged assault and in subsequent reports of the incident Mr Strauss-Kahn’s name was withheld. “It is a bit terrifying to take on someone like DSK and his entourage,” Mr Koubbi said.

Ms Banon says she did see a lawyer but decide to go no further. “I did not dare take it all the way,” she said in the 2007 broadcast. “I did not want to be labelled for the rest of my life as the girl who had a problem with a politician.

The detention of Mr Strauss-Kahn has complicated talks on the Greek sovereign debt crisis and also the 2012 French presidential race.

In Brussels, the European Commission sought to play down any disruption that the charges against Mr Strauss-Kahn might pose for dealing with the EU’s ongoing debt crisis.

“We continue to rest assured that there will be full continuity – not only in operations, but in decision-making – at the IMF,’ said Amadeo Altafaj, a spokesman for Olli Rehn, the EU’s top economic official.

Mr Altafaj also praised Mr Strauss-Kahn’s interim replacement, John Lipsky as “a skilful man” with “a very good knowledge of Europe”.

European finance ministers were due to gather in Brussels this afternoon to discuss the crisis, and are expected to give their approval to a €78bn ($110bn) bail-out package for Portugal.

Greece is not on the agenda, although it is widely expected that officials will discuss in the margins whether the country requires further assistance, or an adjustment to the terms of the €110bn bail-out it accepted last year.

Although Mr Strauss-Kahn had become the subject of the day, diplomats also emphasised the need to maintain some sense of continuity.

“I don’t think it’s in anyone’s interest to allow what’s happened in New York to throw a spanner into the works on the work being done to protect Portugal and the euro,” one diplomat said. “So on that front, I think it’s business as usual.”

His relationships with European leaders and ability to push through IMF support made him a crucial figure in arranging bail-outs for Greece, Ireland and Portugal.

“He showed himself to be a good manager of the IMF during the financial crisis by winning backing for his convictions and getting people to agree,” said one European official involved in the talks on Greece. “This is not at all a trivial affair.”

Nemat Shafik, deputy managing director, will represent the IMF at meetings of eurozone finance ministers in Brussels in Mr Strauss-Kahn’s absence.

No crunch negotiations on the eurozone are currently under way. The terms of a €78bn joint EU-IMF bail-out for Portugal have already been agreed and it is likely to be some weeks before officials must decide whether or not to adjust the Greek loan terms.

In 2008, Mr Strauss-Kahn was reprimanded by the IMF’s executive board for a “serious error of judgment” after he had an affair with a colleague.

Reporting by Barney Jopson in New York, Robin Harding, Alan Beattie in Washington, Peggy Hollinger in Paris and Ben Hall in London

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