Former IMF chief Dominique Strauss-Kahn is to be quizzed as a suspect about involvement in an alleged illegal prostitution ring, a source familiar with the case said at the weekend.

"/> Former IMF chief Dominique Strauss-Kahn is to be quizzed as a suspect about involvement in an alleged illegal prostitution ring, a source familiar with the case said at the weekend.

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DOMINIQUE STRAUSS-KAHN

DSK to be quizzed on prostitution ring: source

Former IMF chief Dominique Strauss-Kahn is to be quizzed as a suspect about involvement in an alleged illegal prostitution ring, a source familiar with the case said at the weekend.

DSK to be quizzed on prostitution ring: source
WTO

He has been summoned for questioning on Tuesday in connection with a police probe into the organisation of sex parties in restaurants and swingers’ clubs in Paris, Washington, Madrid, Vienna and Ghent, Belgium.

Strauss-Kahn could face charges if magistrates deem he was aware the women who took part were prostitutes and the funds to pay them were fraudulently obtained, as is being alleged against other suspects, the source said.

While theoretically he could be held for up to 96 hours the interrogation is not expected to last more than 48 and he can be accompanied by a lawyer.

A police source said it was not ruled out that Strauss-Kahn would be charged then taken before a judge to decide whether he should be remanded in custody.

Strauss-Kahn, 62, resigned as director of the International Monetary Fund in May after he was accused of raping a chambermaid in a New York hotel. He returned to France in August after the US case collapsed, only to face new allegations.

First, a 32-year-old writer accused him of attempting to rape her in 2003 but, while prosecutors said there was prima facie evidence of sexual assault, the case was too old to pursue.

Then he was implicated in an entirely separate investigation into the alleged prostitution ring said to have operated out of luxury hotels in the northern French city of Lille.

Magistrates have already charged several leading local figures with organising the ring and there are suspicions that a construction company executive used his firm’s money to entertain guests at sex parties.

Strauss-Kahn is also expected to be asked if he gave anything in return for the parties organised and funded by businessmen Fabrice Paszkowski and David Roquet, who have already been charged.

Lawyers for Paskowski, head of a medical equipment firm, and Roquet, former director of a subsidiary of public works group Eiffage, have denied any quid pro quo.

Others charged in the case include three hotel bosses, a lawyer and a local police chief.

Strauss-Kahn had demanded to be questioned by judges leading the inquiry, hoping to halt what his lawyers brand a “media lynching.”

A book published in December quoted him as admitting to having an uninhibited sex life, including attending swingers’ parties, but he denied knowing that any of the participants were prostitutes.

The last party he attended took place from May 11th to 13th in Washington, just before the incident with chambermaid Nafissatou Diallo in New York.

Once seen as the favourite to oust Nicolas Sarkozy and win April’s French presidential election, Strauss-Kahn is now an embarrassment to his Socialist Party, shunned by the campaign and former close allies.

He still faces a civil suit from the New York hotel maid, Nafissatou Diallo.

Strauss-Kahn’s journalist wife Anne Sinclair, 63, who stood by the disgraced former IMF chief during the New York scandal, was named editor of the French edition of the Huffington Post Internet newspaper last month.

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ECONOMY

World unprepared for next financial crisis: ex-IMF chief Strauss-Kahn

The world is less well equipped to manage a major financial crisis today than it was a decade ago, according to Dominique Strauss-Kahn, a former chief of the International Monetary Fund (IMF).

World unprepared for next financial crisis: ex-IMF chief Strauss-Kahn
Former French Economy Minister and former managing director of the International Monetary Fund (IMF) Dominique Strauss-Kahn , poses during a photo session in Paris on Thursday. Photo: JOEL SAGET / AFP
In an interview with AFP, the now-disgraced Strauss-Kahn — who ran the fund at the height of the 2008 financial meltdown — also said rising populism across the world is a direct result of the crisis. 
 
Strauss-Kahn resigned as head of the IMF in 2011 after being accused of attempted rape in New York, although the charges were later dropped. He settled a subsequent civil suit, reportedly with more than $1.5 million.
 
Q: When did you become aware that a big crisis was brewing?
 
A: When I joined the IMF on Nov 1, 2007, it became clear quite quickly that things were not going well. That is why in January 2008, in Davos, I made a statement that made a bit of noise, asking for a global stimulus package worth two percent of each country's GDP. In April 2008, during the IMF's spring meetings, we released the figure of $1,000 billion that banks needed for their recapitalisation.
 
Q: Did the Bush administration grasp the danger of Lehman Brothers going bankrupt?
 
A: No, and that is why Treasury Secretary Henry Paulson decided not to save Lehman, because he wanted to make an example of it in the name of moral hazard. Like everybody else, he considerably underestimated the consequences. Allowing Lehman to go under was a serious mistake. Especially because only a week later they were forced to save the insurer AIG, which was much bigger.
 
Q: Ten years on, are we better equipped to deal with a crisis of such a magnitude?
 
A: No. We have made some progress, particularly in the area of banks' capital adequacy ratios. But that is not nearly enough. Imagine Deutsche Bank suddenly finding itself in difficulty. The eight percent of capital it has at its disposal are not going to be enough to solve the problem. The truth is that we are less well prepared now. Regulations are insufficient.
 
Q: How so?
 
A: After 2012-2013 we stopped talking about the need to regulate the economy, for example concerning the size of banks, or concerning rating agencies. We backtracked, which is why I am pessimistic about our preparedness. We have a non-thinking attitude towards globalisation and that does not yield positive results.
 
Q: Do we still have international coordination?
 
A: Coordination is mostly gone. Nobody plays that role anymore. Not the IMF and not the EU, and the United States president's policies are not helping. As a result, the mechanism that was created at the G20, which was very helpful because it involved emerging countries, has fallen apart. Ten years ago, governments accepted leaving that role to the IMF. I'm not sure it is able to play it today, but the future will tell.
 
Q: Do you believe that Donald Trump's election is a consequence of the crisis?
 
A: I believe so. I'm not saying that there was a single reason for Trump's election, but today's political situation is not unconnected to the crisis we lived through, both in the US with Trump and in Europe.
 
Q: Connected how?
 
A: One of the consequences of the crisis has been completely underestimated, in my opinion: the populism that is appearing everywhere is the direct outcome of the crisis and of the way that it was handled after 2011/2012, by favouring solutions that were going to increase inequalities.
 
Quantitative easing (by which central banks inject liquidity into the banking system) was useful and welcome. But it is a policy that is basically designed to bail out the financial system, and therefore serves the richest people on the planet.
 
When there's a fire, firemen intervene and there is water everywhere. But then you need to mop up, which we didn't do. And because this water flowed into the pockets of some, and not of everyone, there was a surge in inequality.
 
By AFP's Antonio Rodriguez