IMF director Strauss-Kahn under investigation
Agence France-Presse
Published: Saturday October 18, 2008

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WASHINGTON (AFP) The International Monetary Fund has launched an investigation of its director, Frenchman Dominique Strauss-Kahn, for abuse of power while involved in a relationship with a subordinate, an IMF official said Saturday.

The probe was set in motion at the intitiative of a long-serving member of the institution's governing board, Shakour Shaalan of Egypt.

Shaalan "has asked external counsel to conduct an independent investigation and determine the validity of the allegations," an IMF spokesman told AFP.

"All allegations -- particularly those involving senior management -- are taken extremely seriously," he added.

The Wall Street Journal reported that the law firm of Morgan, Lewis & Bockius LLP had been retained by the IMF to conduct the investigation expected to be completed by the end of the month.

According to the report, the investigation focuses on the former French finance minister's relationship with Hungarian-born Piroska Nagy, a married former senior official in the IMF's Africa department.

The two are said to have exchanged emails about a possible intimate relationship, which apparently began early this year during a conference in Europe, according to The Journal.

The IMF and Strauss-Kahn have been in the spotlight in the past weeks as governments grapple with the extent of the worst global financial meltdown since the Great Depression of the 1930s.

In an interview published Friday, the IMF chief said the fund was ready to help developing economies stung by financial turmoil.

In a statement, Strauss-Kahn said: "The IMF is examining an incident which occured in my private life in January 2008.

"I have cooperated and am continuing to cooperate with outside counsel to the Fund concerning this matter," he said.

"At no time did I abuse my position as the Fund's managing director."