WASHINGTON (AFP) — International Monetary Fund chief Dominique Strauss-Kahn is being probed for abuse of power while involved in a sexual relationship with a subordinate, The Wall Street Journal said Saturday.
The newspaper said the law firm of Morgan, Lewis & Bockius LLP had been retained by the IMF to conduct the investigation which is expected to be completed by the end of the month.
According to the report, the investigation focuses on 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, said The Journal.
However, the emails were discovered by Nagy's husband, prominent Argentine-born economist Mario Blejer, who has worked at the IMF, the paper said.
The Journal quotes Strauss-Kahn as saying in a statement that he has cooperated and continues to cooperate with outside counsel to the fund concerning this matter.
The "incident which occurred in my private life" took place in January 2008, the director is quoted as saying. "At no time did I abuse my position as the fund's managing director."
Nagy resigned from the IMF in August as part of a personnel cutback and is now working as an economist at the European Bank for Reconstruction and Development in London, according to the report.
The investigators are looking into whether Strauss-Kahn showed favoritism to Nagy at the IMF, or, on the contrary, sought retribution, the paper said.
They also would like to know if Nagy's severance package was excessive for a person of her position and tenure.
Robert Litt, the attorney for Nagy, said she had not been pressured to leave the IMF and took a buyout package that was available to others of her pay grade and seniority, The Journal reported.
The probe was sought by Shakour Shaalan, who represents Egypt and other Arab countries on the IMB governing board, with advice from the representatives of Russia and the United States, according to the report.
The probe comes 15 months after former World Bank president Paul Wolfowitz was forced to quit because of alleged favoritism to junior with whom he had a long-standing relationship.
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