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DOMINIQUE STRAUSS-KAHN

DSK to pay Manhattan maid $6 million: report

Disgraced former IMF chief and would-be French president Dominique Strauss-Kahn will pay a hefty sum to settle out of court with a Manhattan maid who accused him of sexual assault, ending a sordid 18-month legal saga, reports say.

Published: 30 November 2012 14:16 CET
DSK to pay Manhattan maid $6 million: report
Photo: Guillaume Paumier

Le Monde is reporting that the 63-year-old French politician will pay hotel maid Nafissatou Diallo a whopping $6 million to settle her lawsuit.

The newspaper says in its Saturday edition that Strauss-Kahn has told friends he will pay that amount to bring the affair to an end.

This follows a report from the New York Times, quoting unidentified sources "with knowledge of the matter," that the pair have "quietly reached an agreement to settle" her lawsuit.

The newspaper added that "no settlement had yet been signed."

NBC television also reported the possible deal, confirming that it had yet to be completed.

Judge Douglas McKeon, who is presiding over the civil case, told AFP "there may be a court session as early as next week," but declined to comment on the reports of a settlement.

Diallo's lawyers did not immediately respond to an interview request, while a spokeswoman for Strauss-Kahn's legal team declined to comment.

Strauss-Kahn, who had been widely touted as a likely challenger to then president Nicolas Sarkozy, suffered a stunning fall from grace following his arrest at a New York hotel last year on sex assault charges.

He then faced a string of separate sex-related investigations in France.

Diallo had sued Strauss-Kahn in New York civil court after prosecutors threw out assault charges filed against the globe-trotting politician, saying the maid's sex assault case would not stand up before a jury.

Although Strauss-Kahn has since been mired in legal troubles and brought low by the repeated tarnishing of his once stellar reputation, that initial downfall at a posh Manhattan hotel in May 2011 came as a shocking surprise.

At the time, Strauss-Kahn was jetting between world capitals as head of the International Monetary Fund and was expected to announce what would have been a formidable candidacy for the French presidency.

Diallo, a maid at the Sofitel hotel, shattered that trajectory when she alleged the powerful politician had leapt on her in his room, naked, and
forced her to perform oral sex on him.

Strauss-Kahn was arrested as he was about to take a flight back to Europe.

He later conceded that there had been a sexual encounter in the hotel room with the cleaner, but insisted that it had been consensual.

The subsequent court proceedings and a brief spell in New York's tough Rikers Island detention center publicly humiliated Strauss-Kahn.

Then it was the turn of the Manhattan District Attorney's office to face embarrassment as they admitted that their case was falling part, with Diallo having been caught lying over several points.

Charges were dropped and Strauss-Kahn left hurriedly for France, where his new bout of legal problems was about to begin.

His lawyers have repeatedly said they would not agree to a deal to pay off Diallo, branding her a gold-digger.

Diallo's lawyers have equally often insisted that they only want their day in court to confront Strauss-Kahn.

Already having left US territory, Strauss-Kahn tried to get off the hook by claiming diplomatic immunity in the civil case.

However a judge rejected that move in May.

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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).

Published: 9 September 2018 14:08 CEST
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