Global lender IMF says it’s fully functional after MD arrested on rape charges

Global lender the International Monetary Fund says it remains fully functional and operational, despite its managing director and French presidential hopeful Dominique Strauss-Kahn being arrested on an attempted rape charge.

The 62-year-old has been charged with a criminal sexual act, unlawful imprisonment and attempted rape. Strauss-Kahn, who is reportedly set to plead not guilty to the charges, was pulled from a Paris-bound plane this weekend shortly before it left the US. It has been reported he left his mobile phone at the hotel where the assault is alleged to have occurred.

“She [the complainant] told detectives he came out of the bathroom naked, ran down a hallway to the foyer where she was, pulled her into a bedroom and began to sexually assault her, according to her account,” police spokesman Paul Browne has told Reuters.

“She pulled away from him and he dragged her down a hallway into the bathroom where he engaged in a criminal sexual act, according to her account to detectives. He tried to lock her into the hotel room,” Browne said.

The IMF said this morning it had no comment on the hotel worker’s allegations.

“Mr. Strauss-Kahn has retained legal counsel… all inquiries will be referred to his personal lawyer and to the local authorities,” the fund said.

IMF deputy John Lipky – who recently said he would not renew his term in August – has been named as acting chief. Strauss-Kahn’s five-year term at the IMF is scheduled to finish at the end of 2012.

The fund, which was founded at the end of World War II to build a framework for economic cooperation, provides policy members and financing to its 187 member-nations.

Dr Scott Burchill, senior lecturer in international relations at Deakin University, says the IMF is a crucial player in lending money to countries under threat, particularly Greece, Ireland, Portugal and Spain. Most recently, Strauss-Kahn has been involved in discussions for an IMF-EU bailout of Greece.

Burchill says the arrest is more likely to affect French domestic policies than the workings of the IMF. Strauss-Kahn, along with far-right leader Marine Le Pen, has outranked French president Nicolas Sarkozy in opinion polls, despite failing to declare his candidacy.

Burchill says the IMF, along with the World Bank, had a poor image up until the 1990s, but over the past decade or so had improved its public reputation, notwithstanding its inability to predict the GFC.

“There are still a lot of questions about its role, particularly given it failed to advise regulators on private operators creating instruments that would contribute to the GFC,” Burchill says.

“If they can’t get it right, who else can?” he says.

Burchill says the US tends to dominate the IMF and appoint the people who run it, because it is the fund’s major contributor.

“The policy of the fund won’t change,” Burchill predicts.

“It’s embarrassing, but it will be portrayed as his problem rather than one of the IMF,” Burchill says.