Former IMF chief Dominique Strauss-Kahn has been freed from French police custody after two days of questioning about an alleged prostitution ring but faces a further grilling next month.

"/> Former IMF chief Dominique Strauss-Kahn has been freed from French police custody after two days of questioning about an alleged prostitution ring but faces a further grilling next month.

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DOMINIQUE STRAUSS-KAHN

Strauss-Kahn freed but faces new questions

Former IMF chief Dominique Strauss-Kahn has been freed from French police custody after two days of questioning about an alleged prostitution ring but faces a further grilling next month.

Strauss-Kahn freed but faces new questions
WTO

The disgraced French politician also heard on Wednesday that the first court hearing in a US civil case, brought by the New York hotel maid who alleges that he sexually assaulted her, will take place on March 15th.

DSK, as he is known in France, will thus face legal proceedings on both sides of the Atlantic next month.

A French judicial source said Strauss-Kahn, once considered a front-runner to become the next president of France, would be summoned to appear before investigating magistrates in Lille on March 28th on charges linked to prostitution and corruption.

The 62-year-old former Socialist minister was released after being detained for about 32 hours for questioning on the charges of “abetting aggravated pimping by an organised gang” and “misuse of company funds”.

He was swiftly whisked away in a car under a police motorcycle escort from the police station in the northern city of Lille, where dozens of journalists had gathered.

During his interrogation, Strauss-Kahn told investigators he did not suspect women he met at orgies were prostitutes, as they were introduced to him by senior police officers, a source close to the probe said.

“He explained himself fully about all the events he was questioned on,” Strauss-Kahn’s lawyer Frederique Baulieu said, but she declined to comment on his future summons.

He was also to be quizzed by France’s police internal affairs department, the IGPN, which is conducting a separate inquiry into a senior officer, Commissioner Jean-Christophe Lagarde, who has been charged with pimping.

Under French law, aggravated organised pimping carries a prison term of up to 20 years and profiting from embezzlement five years and a fine.

Investigating magistrates want to know whether he was aware that women who entertained him at parties in restaurants, hotels and swingers’ clubs in Paris and Washington were paid prostitutes.

They will also ask whether Strauss-Kahn knew the escorts were paid with funds allegedly fraudulently obtained from a public works company by his hosts.

Paying a prostitute is not illegal in France, but profiting from vice or embezzling company funds to pay for sex can lead to charges.

Lawyer Henri Leclerc has said his client may not have known he was with prostitutes as “in these parties, you’re not necessarily dressed. I defy you to tell the difference between a nude prostitute and a nude woman of quality.”

The former managing director of the International Monetary Fund acknowledges having an uninhibited sex life, but rejects any role in pimping or corruption and has indicated he will deny any criminal wrongdoing.

New York prosecutors abandoned a sex assault case against Strauss-Kahn last year, but his accuser, an immigrant hotel maid, lodged a civil suit.

The US hearing next month will air arguments on pre-trial motions and is not the start of the trial itself.

The Bronx Supreme Court announced the new stage in the saga with a brief statement saying “oral argument on the motions in the Diallo v Strauss-Kahn case pending in Bronx Supreme Court will be held on March 15th.”

Nafissatou Diallo says Strauss-Kahn attempted to rape her in his Manhattan Sofitel hotel room where she had gone to clean on May 14th last year. 

Strauss-Kahn was arrested later that day but insisted he was being framed and prosecutors later dropped charges, saying the maid had credibility problems.

The civil suit seeks unspecified damages from Strauss-Kahn, who is married to a wealthy French journalist.

Friends of Strauss-Kahn have claimed a conspiracy to bring him down, removing what had been seen as a viable challenge to French President Nicolas Sarkozy.

Two businessmen, Fabrice Paszkowski, a medical equipment tycoon with ties to Strauss-Kahn’s Socialist Party, and David Roquet, former director of a local subsidiary of building giant BTP Eiffage, have already been charged in the French prostitution case.

The pair are alleged to have links to a network of French and Belgian prostitutes centred on the Carlton Hotel in Lille, a well-known meeting place of the local business and political elite in a city run by the Socialist Party.

In all, eight people are facing trial in connection with the “Carlton affair”, including three executives from the luxury hotel itself, a leading lawyer and the police chief, Lagarde.

The last of the sex parties is said to have taken place during a trip by a group from Lille to Washington between May 11th and 13th last year.

One day later, on May 14th, Strauss-Kahn was arrested in New York.

Strauss-Kahn has also been accused by 32-year-old French writer Tristane Banon of attempting to rape her in 2003. Prosecutors decided there was prima facie evidence of a sexual assault, but ruled that the statute of limitations had passed.

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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