DOMINIQUE STRAUSS-KAHN, managing director of the International Monetary Fund and, until this weekend, a possible president of France, sits in a New York City jail, accused of sexually assaulting a hotel worker. Mr. Strauss-Kahn is innocent until proven guilty. But the incident, along with other accusations it is bringing to the surface, may well spell the end of Mr. Strauss-Kahn’s political career, and a sooner-than-planned conclusion to his five-year IMF term.
What should the IMF do? The Fund is enmeshed in negotiations over rescuing Greece, Portugal and other troubled European economies, but Mr. Strauss-Kahn’s subordinates can probably handle those relatively technical matters on an interim basis. The next step is likely to be finding a new managing director, with many advocating a candidate not drawn from the traditional source, Europe’s technocrats: It may be time to give an Asian, Latin American or African a chance. But that discussion, too, is premature.
Before it looks ahead, the IMF should take a look back — to its handling of sex-related charges in relation to Mr. Strauss-Kahn mere months after he took over as managing director in November 2007. At the time, both the IMF and the world economy were facing huge challenges. Yet Mr. Strauss-Kahn also busied himself with the sexual pursuit of Piroska Nagy, a female senior economist at the Fund, complete with racy e-mails, initiated by Mr. Strauss-Kahn but eventually reciprocated. This led to a “relationship” in January 2008 — as well as to consternation within the IMF staff, when the woman, who, like Mr. Strauss-Kahn, was married, left the Fund with a severance package shortly thereafter.
Subsequent investigation by U.S. lawyers hired by the IMF found no overt threats or favoritism by Mr. Strauss-Kahn. After considering Ms. Nagy’s responses to Mr. Strauss-Kahn’s e-mails, and the fact that both she and he tried to cover up the affair, the lawyers ruled it “consensual.” At the end of October 2008, having determined that the managing director was guilty of “a serious error in judgment” but nothing worse, the IMF board let Mr. Strauss-Kahn off with an apology and a promise to behave better.
The nine-page report on the investigation gives no hint that the IMF board considered sexual advances by a boss toward his subordinate inappropriate per se — that power as well as judgment is involved in such matters, and that sexual harassment can exist even if there is no explicit quid pro quo. Yet Ms. Nagy’s letter to investigators, as reported by the Wall Street Journal, makes this plain: “Despite my long professional life,” she wrote, “I was unprepared for the advances of the Managing Director of the IMF. I did not know how to handle this; as I told you I felt ‘I was damned if I did and damned if I didn’t.’ ” What sort of man would put a colleague in that predicament in the first place?
In October 2008, the world economy was melting down. But it’s fair to ask whether IMF leaders paid enough attention when she wrote: “I fear that he is a man with a problem that may make him ill-equipped to lead an institution where women work under his command.”