MercoPress. South Atlantic News Agency

IMF head publicly apologizes for “error of judgement”

Strauss-Kahn Monsieur "Le Seducteur"

International Monetary Fund Managing Director Dominique Strauss-Kahn on Monday publicly apologized for “an error of judgment” in an affair with a subordinate but denied he had abused his position.

In a memo e-mailed to staff after meeting with the fund's board, Strauss-Kahn apologized to IMF employees, the woman he had the affair with, Piroska Nagy, and his wife for the trouble it has caused. IMF officials dismissed speculation that he had resigned and said Strauss-Kahn had not quit. The scandal comes as the IMF is dealing with the worst financial crisis since the 1930s and emerging economists turn to it for advice and financing. It also follows the resignation of World Bank President Paul Wolfowitz, who was forced to resign 16 months ago amid a staff uproar over a high-paying promotion he authorized for his companion who worked at the bank. The IMF board of 24 member countries has ordered an investigation by an outside law firm into whether Strauss-Kahn gave senior economist Nagy preferential treatment before she took a general staff buyout offer in August. She is now working for the European Bank for Reconstruction and Development in London. "I apologized and said that I very much regret this incident," Strauss-Kahn said in the staff e-mail Second, while this incident constituted an error of judgment on my part, for which I take full responsibility, I firmly believe that I have not abused my position," he said, adding: "Third, I fully support the process that is underway and I will, of course, follow the board's guidance as to how best to resolve this matter." Strauss-Kahn, a former French finance minister, said the result of the investigation was expected by the end of the month and urged the IMF board to inform staff of the outcome as soon as possible. "I want to apologize to the staff member concerned for my error in initiating this relationship," Strauss-Kahn said. "She is a talented economist and consummate professional. I acknowledge and regret the difficult situation this has created for her. I also apologize to my wife and family," he added. Strauss-Kahn's wife, a high profile French television interviewer, Anne Sinclair, said on her blog on Sunday she did not want to talk about her private life but wanted to put an end to malicious rumors. "For my part, this one night stand is now behind us; we have turned the page," she said. Nagy's husband, Mario Blejer, a well-known international economist and former Argentine central bank governor and an advisor to the Bank of England, said he and Nagy had been separated for several years. Earlier in the day Mr. A. Shakour Shaalan, in his capacity as Dean of the International Monetary Fund's 24-member Executive Board said an outside counsel was contracted to establish the facts about the alleged incident. "During the summer, an enquiry was commenced at my behest, in my capacity as Dean of the Board, into claims by a third party of possibly improper personal behavior involving the Managing Director of the IMF, Dominique Strauss-Kahn. In consultation with a standing working group of Executive Directors that oversees the performance of the Managing Director, outside counsel was retained in order to establish the facts and report back concerning the validity of these claims". He added that the outside counsel is expected to complete the enquiry by the end of the month, and a further public statement will be issued at that time. "The Managing Director, who has been fully supportive of the enquiry, met today (Monday) with the Executive Directors to review the process underway. Both he and Directors agreed that it is in the best interests of the Fund and its 185-member countries for this enquiry to be thorough, independent and completed expeditiously."