What Really Happened to Strauss-Kahn?

December 22, 2011
Edward Jay Epstein
http://media.nybooks.com/strauss.html

May 14, 2011, was a horrendous day for Dominique Strauss-Kahn, then head of the International Monetary Fund and leading contender to unseat Nicolas Sarkozy as president of France in the April 2012 elections. Waking up in the presidential suite of the Sofitel New York hotel that morning, he was supposed to be soon enroute to Paris and then to Berlin where he had a meeting the following day with German Chancellor Angela Merkel. He could not have known that by late afternoon he would, instead, be imprisoned in New York on a charge of sexual assault. He would then be indicted by a grand jury on seven counts of attempted rape, sexual assault, and unlawful imprisonment, placed under house arrest for over a month, and, two weeks before all the charges were dismissed by the prosecutor on August 23, 2011, sued for sexual abuse by the alleged victim.

He knew he had a serious problem with one of his BlackBerry cell phones—which he called his IMF BlackBerry. This was the phone he used to send and receive texts and e-mails—including for both personal and IMF business. According to several sources who are close to DSK, he had received a text message that morning from Paris from a woman friend temporarily working as a researcher at the Paris offices of the UMP, Sarkozy’s center-right political party. She warned DSK, who was then pulling ahead of Sarkozy in the polls, that at least one private e-mail he had recently sent from his BlackBerry to his wife, Anne Sinclair, had been read at the UMP offices in Paris.1 It is unclear how the UMP offices might have received this e-mail, but if it had come from his IMF BlackBerry, he had reason to suspect he might be under electronic surveillance in New York. He had already been warned by a friend in the French diplomatic corps that an effort would be made to embarrass him with a scandal. The warning that his BlackBerry might have been hacked was therefore all the more alarming.

At 10:07 AM he called his wife in Paris on his IMF BlackBerry, and in a conversation that lasted about six minutes told her he had a big problem. He asked her to contact a friend, Stéphane Fouks, who could come to his home on the Place des Vosges and who could arrange to have both his BlackBerry and iPad examined by an expert in such matters. He had no time to do anything about it that morning. He had scheduled an early lunch with his twenty-six-year-old daughter Camille, a graduate student at Columbia, who wanted to introduce him to her new boyfriend. After that, he had to get to JFK Airport in time to catch his 4:40 PM flight to Paris.

He had finished packing his suitcase just before noon, according to his own account, and then took a shower in the bathroom, which is connected to the bed in the suite by an interior corridor. According to the hotel’s electronic key records, which were provided to DSK’s lawyers, Nafissatou Diallo, a maid, had entered the presidential suite (room 2806) between 12:06 and 12:07 PM (such records are only accurate to the nearest minute).2 Ordinarily, cleaning personnel do not enter a room to clean when a guest is still in it. According to DSK’s account, his bags were visible in the foyer when he emerged naked from the bathroom into the interior corridor. At this point, according to his account, he encountered the maid in the corridor by the bathroom. (The maid, for her part, says she encountered him coming out of the bedroom.) Phone records show that by 12:13 PM he was speaking to his daughter Camille on his BlackBerry. The call lasted for forty seconds.

What took place between DSK and the maid in those six to seven intervening minutes is a matter of dispute. DNA evidence found outside the bathroom door showed her saliva mixed with his semen. The New York prosecutor concluded that a “hurried sexual encounter” took place and DSK’s lawyers have admitted as much, while claiming that what happened was consensual. The maid has brought a civil suit claiming he used force. It is not clear when she left the room since key card records do not show times of exit. What is known is that DSK called his daughter on his IMF BlackBerry at 12:13 to tell her he would be late.

After DSK completed his call, he dressed and put on his light black topcoat. He carried with him only one small overnight bag and a briefcase (which contained his iPad and several spare phones) and took the elevator to the lobby. At 12:28 PM the hotel security cameras show him departing. He had to go eight blocks to the McCormick & Schmick’s restaurant on Sixth Avenue between 51st and 52nd Street. He was delayed by heavy traffic on Sixth Avenue. The restaurant camera shows that he arrived at 12:54.

Camille was with her new boyfriend. They had a quick meal, and at 2:15 PM, according to the restaurant’s surveillance cameras, DSK got in another taxi to go to the airport. Almost immediately, he discovered that his IMF BlackBerry was missing. It was the phone he had arranged to have examined for bugs in Paris and it was the phone that contained the earlier text message warning him about the interception of his messages. At 2:16 PM he called Camille, who had also just left the restaurant, on his spare BlackBerry and had her go back to the restaurant to search for it. Camera footage at the restaurant shows her crawling under the table. At 2:28 PM she sent him a text message saying that she could not find it. So DSK continued on to the airport.

Back at the Sofitel, meanwhile, Nafissatou Diallo, the maid he had encountered in the presidential suite, had told hotel security that she had been sexually assaulted by a client in that suite. A thirty-two-year-old immigrant from Guinea, she had been working at the Sofitel for three years. At 2:30 PM she was shown a photograph of DSK by the hotel’s security people. According to the official bill of particulars—the statement of the basic facts of the case filed by the prosecutors—the police had apparently not yet fully taken over the case, even though the encounter between DSK and Diallo had occurred over two hours earlier.

Part of the delay in bringing in the police may have been the result of Diallo’s not immediately voicing her complaint. After she had left DSK in the presidential suite around 12:13 PM—the time of his call to Camille—she remained on the VIP floor. The hotel’s electronic key records indicate that at 12:26 PM she entered 2820, another VIP suite on the same floor that she had already entered several times earlier that morning. Then, one to two minutes later, she went back to the now empty presidential suite. A few minutes after that, she encountered another housekeeper, her supervisor, in the corridor. In the course of their conversation, Diallo asked the supervisor what would happen if a hotel guest took advantage of a hotel employee. Initially, Diallo told her that this was only a hypothetical question; but then, when pressed further, she said that she had been assaulted by the guest in the presidential suite. The supervisor then brought her to the head of housekeeping, Renata Markozani, who reentered the presidential suite with Diallo at 12:42, according to the key records, and notified the hotel’s security and management personnel. At 12:52 PM, Diallo is seen arriving at the hotel’s security office on the ground floor, located near the 45th Street entrance. She is wearing a beige uniform, and is accompanied by Renata Markozani, whom she towers over. (She is five feet ten inches tall.)

Shortly thereafter the hotel’s own security team was augmented by John Sheehan, a security expert who is identified on LinkedIn as “director of safety and security” at Accor, a part of the French-based Accor Group, which owns the Sofitel. Sheehan, who was at home in Washingtonville, New York, that morning, received a call from the Sofitel at 1:03 PM. He then rushed to the hotel. While en route, according to his cell phone records, he called a number with a 646 prefix in the United States. But from these records neither the name nor the location of the person he called can be determined. When I called the number a man with a heavy French accent answered and asked whom I wanted to speak with at Accor.3

The man I asked to talk to—and to whom I was not put through—was René-Georges Querry, Sheehan’s ultimate superior at Accor and a well-connected former chief of the French anti-gang brigades, who was now head of security for the Accor Group. Before joining Accor Group in 2003, he had worked closely in the police with Ange Mancini, who is now coordinator for intelligence for President Sarkozy. Querry, at the time that Sheehan was making his call to the 646 number, was arriving at a soccer match in Paris where he would be seated in the box of President Sarkozy. Querry denies receiving any information about the unfolding drama at the Sofitel until after DSK was taken into custody about four hours later.

Another person at the Accor Group whom Sheehan might have alerted was Xavier Graff, the duty officer at the Accor Group in Paris. Graff was responsible that weekend for handling emergencies at Accor Group hotels, including the Sofitel in New York. His name only emerged five weeks later when he sent a bizarre e-mail to his friend Colonel Thierry Bourret, the head of an environment and public health agency, claiming credit for “bringing down” DSK. After the e-mail was leaked to Le Figaro, Graff described it as a joke (it resulted, however, in his suspension as director of emergencies by the Accor Group). Even jokes can have a basis. In this case the joke was made by the person who was directly responsible for passing on information to his superiors, including the head of security at Accor, René-Georges Querry—information that, if acted on by informing the American authorities, could have helped destroy DSK’s career. But like Querry, Graff denied receiving any calls or messages from New York until later that evening, telling a French newspaper that the failure to inform him was an “incredible miss” (“loupé”).

By the time Sheehan was called by the hotel at 1:03 PM, Diallo was seated on a bench in the hotel’s ground floor service area, just off the service entrance on 45th Street. Behind her was a “Dutch door,” with the upper half opened, that led to the hotel’s security office. Surveillance camera footage shows her entering the area with a tall unidentified man at 12:52 PM. She remains there until 2:05 PM. At 12:56, she is joined there by Brian Yearwood, the large, heavy-set man who is the hotel’s chief engineer. Yearwood had just come down from the presidential suite on the twenty-eighth floor, which he had entered at 12:51, according to the key records. Yearwood remained close to Diallo as she spoke to Adrian Branch, the security chief for the hotel, who remained behind the half-shut door of the security office. She can be seen gesturing with her hands for about four minutes, pointing to different parts of her body over and over again, suggesting she was telling and retelling her story.

At 1:28, Sheehan, still on the way to the hotel, sent a text message to Yearwood. And then another text message to an unidentified recipient at 1:30. At 1:31—one hour after Diallo had first told a supervisor that she had been assaulted by the client in the presidential suite—Adrian Branch placed a 911 call to the police. Less than two minutes later, the footage from the two surveillance cameras shows Yearwood and an unidentified man walking from the security office to an adjacent area. This is the same unidentified man who had accompanied Diallo to the security office at 12:52 PM. There, the two men high-five each other, clap their hands, and do what looks like an extraordinary dance of celebration that lasts for three minutes. They are then shown standing by the service door leading to 45th Street—apparently waiting for the police to arrive—where they are joined at 2:04 PM by Florian Schutz, the hotel manager.

A minute later, at 2:05 PM, the footage shows two uniformed police officers arriving and then accompanying Diallo to an adjoining office. It is unclear if the police officially took over the case at this time or later. There is so far no explanation for why the security staff had delayed the call to the NYPD that would lead to a scandal involving the possible future president of France. What is clear is that they did so just three minutes after receiving a message from Sheehan. Nor is it clear why the two men were celebrating.

The police arrived, according to the hotel’s security camera footage, at 2:05 PM. They then can be seen escorting Diallo to a room across from the security office. There is an unexplained discrepancy here concerning the information in the bill of particulars, which says that at approximately 2:30 PM, “a photograph of the defendant was shown to the witness [i.e., Diallo] by hotel security without police involvement.” If so, even after leaving the bench (and video surveillance) and going to a room with the police, she remained in the custody of Sofitel security. I asked both Deputy Commissioner Paul Browne and Deputy Inspector Kim Royster why, according to the bill of particulars, the police were not officially involved at this point, but they declined to comment.

More than an hour later, at 3:28 PM, the police took her to St. Luke’s Hospital, where she was medically examined and they then formally interviewed her. She described to them a brutal and sustained sexual attack in which DSK locked the suite door, dragged her into the bedroom, and then dragged her down the inner corridor to a spot close to the bathroom door—a distance of about forty feet—and, after attempting to assault her both anally and vaginally, forced her twice to perform fellatio. After that, she fled the suite. As has been seen, according to the electronic key information, and to the record of DSK’s call to his daughter showing him speaking to her at 12:13, we can reasonably conclude that any such actions could have taken place only within a period of six or seven minutes, between 12:06–07 and 12:13, when he called his daughter.

At 3:01 PM, as DSK was approaching the airport, he was still attempting to find his missing phone. He attempted to call it from his spare but received no answer. What he did not know was that at 12:51, according to the records of the BlackBerry company, it had been somehow disabled. At 3:29 PM, evidently unaware of what was happening at the Sofitel, he called the hotel from the taxi, saying, according to the police transcript, “I am Dominique Strauss-Kahn, I was a guest. I left my phone behind.” He then said he was in room “2806.” He was asked to give a phone number, so that he could be called back, after 2806 was searched for his phone.

When he was called back thirteen minutes later, he spoke to a hotel employee who was in the presence of police detective John Mongiello. The hotel employee falsely told him that his phone had been found and asked where it could be delivered. DSK told him that he was at JFK Airport and that “I have a problem because my flight leaves at 4:26 PM.” He was reassured that someone could bring it to the airport in time. “OK, I am at the Air France Terminal, Gate 4, Flight 23,” DSK responded. So the police rushed to the airport. At 4:45 PM, police called DSK off the plane and took him into custody.

DSK was then jailed and indicted by a grand jury on seven counts, including attempted rape, sexual abuse, and unlawful imprisonment. The court eventually dropped all the charges against him because the prosecutors found that the complainant, Diallo, had proven to be an untruthful witness. They wrote in the motion for dismissal that “the nature and number of the complainant’s falsehoods leave us unable to credit her version of events beyond a reasonable doubt.” They said that she “has given irreconcilable accounts of what happened,” and had lied not only to the prosecutors but under oath to the grand jury about her whereabouts after the encounter. She stated that she had hid in the hall after leaving the presidential suite, and entered no other room on the twenty-eighth floor until she told another maid about the attack (which was approximately fifteen minutes later).

When asked why she had not used her pass key to go into another room, she said they all had “Do Not Disturb” signs on the door. After her grand jury testimony, prosecutors discovered that this was false when the hotel belatedly provided them with the electronic key records showing that Diallo had entered room 2820 at 12:26 PM, after her encounter with DSK. The same record also showed that she had also entered room 2820 prior to her encounter with DSK at a time when the occupant had not checked out and may have been in the room. Why she concealed visiting 2820 was “inexplicable” to the prosecutors, who noted in their motion for dismissal that if she had mentioned her visits to 2820, it would have been declared part of the crime scene and searched by the police. But she did not do so.

Nor were DSK’s lawyers able to find an explanation. When they attempted to learn the identity of the occupant of 2820, Sofitel refused to release it on grounds of privacy. Given Diallo’s conflicting accounts, all that we really know about what happened in the nearby room 2820 is that Diallo went there both before and after her encounter with DSK and then omitted the latter visit from her sworn testimony to the grand jury. We still do not know if there was anyone in 2820 when she entered it again following the encounter with DSK or if, prior to the police arriving, anyone influenced her to omit mention of room 2820.

The Sofitel electronic key record, which the hotel did not turn over to the prosecutors until the next week, contained another unexplained anomaly. Two individuals, not one, entered DSK’s suite between 12:05 and 12:06 PM while he was showering. Each used a different key card entry. The key card used at 12:06 belonged to Diallo; the key card used at 12:05 belonged to Syed Haque, a room service employee who, according to his account, came to pick up the breakfast dishes. If he did so, he would have turned left and gone to the dining room. But Haque has refused to be interviewed by DSK’s lawyers, so his precise movements have not been made public. Since the key cards do not register the time of exit, it cannot be determined from them if both parties were in the room at the same time or, for that matter, at the time of Diallo’s encounter with DSK.

DSK’s BlackBerry, with its messages, is still missing. Investigations by both the police and private investigators retained by DSK’s lawyers failed to find it. While DSK believed he had left it in the Sofitel, the records obtained from BlackBerry show that the missing phone’s GPS circuitry was disabled at 12:51. This stopped the phone from sending out signals identifying its location. Apart from the possibility of an accident, for a phone to be disabled in this way, according to a forensic expert, required technical knowledge about how the BlackBerry worked.

From electronic information that became available to investigators in November 2011, it appears the phone never left the Sofitel. If it was innocently lost, whoever found it never used it, raising the question of by whom and why it was disabled at 12:51. In any case, its absence made it impossible for DSK to check—as he had planned to do—to see if it had been compromised. Nor was it possible to verify from the phone itself the report he received on May 14 that his messages were being intercepted. So we cannot confirm the warning to DSK that he was under surveillance on that disastrous day.

One vexing mystery concerns the one-hour time gap in reporting the alleged attack on Diallo. After she said that she had been the victim of a brutal and sustained sexual assault, it is hard to understand how the security staff would have ruled out that she might require immediate medical attention. But as has been seen, until 1:31, several minutes after receiving a message from Sheehan, the security staff did not make the 911 call. She did not arrive at St. Luke’s Hospital until 3:57 PM, nearly four hours after the alleged attack. We do not know what decisions were made during that one-hour interval or how they influenced what was to later unfold with such dramatic impact.

By the time the 911 call was finally made, the hotel’s management was presumably aware of the political explosion and scandal DSK’s arrest would cause. DSK could no longer be a challenger to Sarkozy. Such considerations, and the opportunities they presented, may have had no part whatever in the hotel’s handling of the situation, but without knowing the content of any messages between the hotel managers in New York and the security staffs in New York or Paris, among others, we cannot be sure. Meanwhile, several mysteries remain. Was there anyone in room 2820 besides Diallo during and after the encounter with DSK? If so, who were they and what were they doing there; and why, in any case, did Diallo deny that she’d gone to the room? Because she denied it, the police, according to the prosecutor’s recommendation for dismissal, did not search 2820 or declare it a crime scene. And where, if it still exists, is the BlackBerry that DSK lost and feared was hacked?

All we know for sure is that someone, or possibly an accident, abruptly disabled it from signaling its location at 12:51 PM. DSK himself has not explained why he was so concerned about the possible interception of his messages on this BlackBerry and its disappearance. According to stories in Libération and other French journals on November 11, 2011, DSK sent text messages on a borrowed cell phone to at least one person named in the still-unfolding affair involving the Carlton Hotel in Lille, a scandal in which corporations allegedly provided high-class escort women to government officials. (DSK denies that he was connected to the prostitution ring.) If DSK sent these messages, may he also have received embarrassing messages back on his own BlackBerry that could have been damaging to his reputation and political ambitions? Or his concern could also have proceeded from other matters, such as the sensitive negotiations he was conducting for the IMF to stave off the euro crises. Whatever happened to his phone, and the content on it, his political prospects were effectively ended by the events of that day.

1 These statements, along with others in this article, were confirmed by sources who prefer to remain anonymous but are known to the author, who has shared his information with the editors.

2 For this article, along with court and other legal documents, I had access to Sofitel electronic key swipe records, time-stamped security camera videotapes, and records for a cell phone used on the day of May 14 by John Sheehan, a security employee of Accor, the company that owns the Sofitel hotel.

3 I had access to the record of only one cell phone used by the Accor Group's security man, John Sheehan. Neither Sheehan nor the hotel's security director, Adrian Branch, returned my calls. Through an assistant Brian Yearwood, the hotel's chief engineer, said he had no comment.

Strauss-Kahn Saga Exposes Flaws in Euro Debt-Crisis Management

July 11 (Bloomberg) -- Greece’s budget was unraveling, Germany and the European Central Bank were at odds over the fix, revelations of secret meetings and cover-ups were sapping confidence in Europe’s crisis management -- and then came the encounter between Dominique Strauss-Kahn and the maid.
Strauss-Kahn’s May 14 arrest on charges of sexual assault left a void atop the International Monetary Fund, busting the one thing that had gone consistently right in the handling of the euro-area debt crisis: cooperation between European leaders and the Washington-based IMF. The fund’s contribution to Greece’s next loan was no longer a sure thing, said two European officials with direct knowledge of the talks who declined to be identified because the deliberations were private.

Confusion over the IMF share was part of a catalogue of missteps and miscommunication by Europe’s political elite that has scarred their effort to prevent Greece from slipping into the financial abyss. With Athens clinging to a lifeline opposed by taxpayers in Germany and Finland, the margin of error is narrowing and the crisis shows no sign of ebbing as it heads toward year three.

“It’s now not just a Greek, Irish or Portuguese problem: it’s a euroland problem,” said William Rhodes, a senior adviser to Citigroup Inc. whose new book “Banker to the World” recounts three decades of work on debt restructurings. “What’s happening in Europe has been hit and miss from one day to the next and the real danger down the road is contagion. All this squabbling spooked the markets, which now move in nanoseconds.”

IMF Payment

The IMF’s approval July 8 to release a 3.2 billion-euro ($4.6 billion) installment for Greece plugged one hole in the rescue strategy just as others are opening up: talks with bondholders over rolling over Greek debt have prompted credit-rating companies to threaten default. Portugal was downgraded to junk by Moody’s Investors Service last week, leading bonds to slump in Ireland, Spain and Italy.

Work on a new Greek package to follow last year’s 110 billion-euro pledge continues at a meeting of finance ministers in Brussels today, with final decisions put off until September.

“No more short-term gimmicks,” Jeffrey Sachs, a Columbia University professor, told Bloomberg Television’s Tom Keene on July 5. European leaders “are treating this as a very short- term set of operations -- get through the next three months, get through the next six months. That won’t work. We need a bigger structure.”

‘On Track’

Short-termism appeared to be working as late as Feb. 11, when the IMF and European authorities certified that Greece was “broadly on track” to rebuild its finances and started paving the way for the March loan installment. On April 1, with the yield on Greece’s 10-year government bond at 12.8 percent, then- Finance Minister George Papaconstantinou predicted a possible return to markets this year.

That went by the boards with the April 26 disclosure that Greece fell short of its deficit-cutting objectives in 2010, forcing it to look for more savings and pushing the 10-year yield to 16.2 percent. Simultaneous talks over a 78 billion-euro aid package for Portugal ate up more policymaking energy.

A private May 6 brainstorming session at Luxembourg’s secluded Senningen Castle captured the tension. A core group of finance ministers and ECB President Jean-Claude Trichet discussed Greece’s shortfall and German-driven talk of a debt restructuring, said Luxembourg Prime Minister Jean-Claude Juncker.

When German magazine Der Spiegel reported that the inner circle was discussing Greece’s exit from the euro, the currency tumbled the most against the dollar in a year. Juncker denied the meeting was taking place -- a line, he said a week later, that “immediately prevented further speculation on the markets.”

Solitary

Ten days after that, deficits, deceit and restructuring formed the backdrop for a euro finance meeting that unfolded with Strauss-Kahn in solitary confinement in New York’s Rikers Island jail. John Lipsky, the fund’s second-ranking official, stayed in Washington to organize the stopgap IMF management.

Off to Brussels went Nemat Shafik, a deputy managing director barely a month at her post -- a technocrat specializing in the Middle East and Africa instead of the politically connected Frenchman. She reminded the Europeans that the IMF needed a 12-month funding program before committing its own money.

Greece was caught in the middle as it became increasingly clear that a 12 billion-euro disbursement due for July was the only thing standing between the debt-stricken country and default.

‘Lack of Leadership’

The absence of Strauss-Kahn, 62, who as French finance minister from 1997 to 1999 had played a role in setting up the euro, made itself felt. On the heels of the Brussels meeting, European Union President Herman Van Rompuy urged the IMF to quickly appoint a new full-time chief, saying on May 19 there was “a lack of leadership in solving the Greek crisis -- even the last days it was very clear.”

Lipsky came to his interim position aware of market doubts about Greece and European political solidarity. Investors “want to see delivery,” he told Bloomberg Radio on April 15. “They’re skeptical, they’re worried and now it’s up to the Greek authorities to carry through the rest of their European partners to provide the support.”

A former JPMorgan Chase & Co. economist nearing the end of a five-year term as the IMF’s first deputy managing director, Lipsky, 64, said two days before the arrest that he wouldn’t seek reappointment after his term expires in August.

‘By the Book’

Lipsky “played it by the book: he was staff-led,” said Peter Ludlow, a Brussels-based historian and author of “The Making of the New Europe.” “Strauss-Kahn was much more of a political animal who felt himself, and indeed was, above the book.”

European policy makers had operated on the understanding that Strauss-Kahn would deliver the IMF’s share, said the two EU officials. It soon dawned on them that, in his caretaker role, Lipsky couldn’t steer the IMF board in the way Strauss-Kahn could, they said.

More miscalculations followed. Lipsky didn’t spell out the assurances the IMF required to release its share of the July loan, first saying Europe needed to come up with a new three- year program for Greece, then that it didn’t, the EU officials said.

The IMF rejects suggestions of inconsistency. “The fund’s position on Greece has not changed,” Conny Lotze, an IMF spokeswoman, said in an e-mailed response to questions. “The fund has worked closely with the Greek authorities and the European partners in supporting Greece’s economic program. The success of Greece’s program has always been and still is the primary objective.”

‘Reprofiling’ Talk

Europe, meanwhile, was manufacturing its own distractions. Fueled by Juncker’s May 16 proposal of a “reprofiling” or “soft restructuring,” speculation swirled that Germany would force an extension of Greece’s debt-repayment schedule, leading to a formal default.

Greek debt continued to get hammered, with the yield on 10- year bonds reaching 17 percent on May 23.

Debt-restructuring speculation contributed to the worsening market psychology, EU Economic and Monetary Commissioner Olli Rehn said. “There was some distortion of attention to a discussion on debt restructuring and too little focus on program implementation,” he said in a July 1 interview.

Germany, which as Europe’s biggest economy is the main underwriter of the bailouts, faced pressure from all sides. The French government and ECB pressed for a “voluntary” bond rollover. President Barack Obama told Chancellor Angela Merkel at the White House that it was her job to halt an “uncontrolled spiral of default.”

Merkel’s Retreat

While Merkel’s abandonment on June 17 of a forced restructuring bettered Greece’s long-term prospects, its chances of escaping default in July still hinged on the euro zone and IMF reading from the same script.

The two sides met again on June 19 in Luxembourg, with the EU’s Rehn forecasting an IMF green light after 10-year yields reached almost 18 percent. It didn’t happen. The European side was unable to commit to another Greek funding program until Greece passed a new, 78 billion-euro set of savings measures.

The IMF, in turn, wouldn’t move until Europe did. “The assurances that we need are typical,” Lipsky said June 21. The budget cuts squeaked through the Greek parliament a week later.

It took European government leaders, together tackling the crisis again after a three-month hiatus, to break out of the loop. Even then, they weren’t sure whether a June 24 pledge to set up the “main parameters of a new program” would bring the IMF on board.

‘Credibility Issues’

And on July 2, a day after Strauss-Kahn was released from home confinement and New York prosecutors told a judge the case had been hurt by “substantial credibility issues” with the accuser, euro-area finance ministers approved their share of the 12 billion-euro payment to Greece, providing a lifeline to September.

“We’re entering a more critical phase because now the important decisions have to be made how the debt will be financed over the next three or four years,” said Christopher Pissarides, a Nobel Prize-winning economist who teaches at the London School of Economics. “So there is a lot more uncertainty in the market.”

To contact the reporter on this story: James G. Neuger in Brussels at jneuger@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

Listen to the IMF, America

Even the International Monetary Fund now admits that total deregulation of financial markets was a mistake. The U.S. should take heed.
Joseph E. Stiglitz
Thursday, May 5, 2011
http://www.slate.com/id/2293114

Robalini's Note: Here's an article by economist Joseph Stiglitz before the framing of DSK which tells you the level of radical change he had begun to institute at the IMF...

The annual spring meeting of the International Monetary Fund was notable in marking the fund's effort to distance itself from its own long-standing tenets on capital controls and labor-market flexibility. It appears that a new IMF has gradually, and cautiously, emerged under the leadership of Dominique Strauss-Kahn.

Slightly more than 13 years ago, at the IMF's 1997 Hong Kong meeting, the fund had attempted to amend its charter in order to gain more leeway to push countries toward capital-market liberalization. The timing could not have been worse: The East Asia crisis was just brewing—a crisis that was largely the result of capital-market liberalization in a region that, given its high savings rate, had no need for it.

That 1997 push had been advocated by Western financial markets—and the Western finance ministries that serve them so loyally. Financial deregulation in the United States was a prime cause of the global crisis that erupted in 2008, and financial and capital-market liberalization elsewhere helped spread that "made in the USA" trauma around the world.

The crisis showed that free and unfettered markets are neither efficient nor stable. They also did not necessarily do a good job at setting prices (witness the real-estate bubble), including exchange rates (which are merely the price of one currency in terms of another).

Iceland showed that responding to the crisis by imposing capital controls could help small countries manage its impact. And the U.S. Federal Reserve's "quantitative easing" made the demise of the ideology of unfettered markets inevitable: Money goes to where markets think returns are highest. With emerging markets booming, and America and Europe in the doldrums, it was clear that much of the new liquidity being created would find its way to emerging markets. This was especially true given that America's credit pipeline remained clogged, with many community and regional banks still in a precarious position.

The resulting surge of money into emerging markets has meant that even finance ministers and central-bank governors who are ideologically opposed to intervening believe that they have no choice but to do so. Indeed, country after country has now chosen to intervene in one way or another to prevent their currencies from skyrocketing in value.

Now the IMF has blessed such interventions—but, as a sop to those who are still not convinced, it suggests that they should be used only as a last resort. On the contrary, we should have learned from the crisis that financial markets need regulation, and that cross-border capital flows are particularly dangerous. Such regulations should be a key part of any system to ensure financial stability; resorting to them only as a last resort is a recipe for continued instability.

There is a wide range of available capital-account management tools, and it is best if countries use a portfolio of them. Even if they are not fully effective, they are typically far better than nothing.

But an even more important change is the link that the IMF has finally drawn between inequality and instability. This crisis was largely a result of America's effort to bolster an economy weakened by vastly increased inequality, through low interest rates and lax regulation (both of which resulted in many people borrowing far beyond their means). The consequences of this excessive indebtedness will take years to undo. But, as another IMF study reminds us, this is not a new pattern.

The crisis has also put to the test long-standing dogmas that blame labor-market rigidity for unemployment, because countries with more flexible wages, such as the U.S., have fared worse than northern European economies, including Germany. Indeed, as wages weaken, workers will find it even more difficult to pay back what they owe, and problems in the housing market will become worse. Consumption will remain restrained, while strong and sustainable recovery cannot be based on another debt-fueled bubble.

As unequal as America was before the Great Recession, the crisis—and the way it has been managed—has led to even greater income inequality, making a recovery all the more difficult. America is setting itself up for its own version of a Japanese-style malaise.

But there are ways out of this dilemma: strengthening collective bargaining, restructuring mortgages, using carrots and sticks to get banks to resume lending, restructuring tax and spending policies to stimulate the economy now through long-term investments, and implementing social policies that ensure opportunity for all. As it is, with almost one-quarter of all income and 40 percent of U.S. wealth going to the top 1 percent of income earners, America is now less a "land of opportunity" than even "old" Europe.

For progressives, these abysmal facts are part of the standard litany of frustration and justified outrage. What is new is that the IMF has joined the chorus. As Strauss-Kahn concluded in his speech to the Brookings Institution shortly before the fund's recent meeting: "Ultimately, employment and equity are building blocks of economic stability and prosperity, of political stability and peace. This goes to the heart of the IMF's mandate. It must be placed at the heart of the policy agenda."

Strauss-Kahn is proving himself a sagacious leader of the IMF. We can only hope that governments and financial markets heed his words.

Was it a Political Conspiracy?

Prosecutors Back Off From Their ‘Iron-Clad’ Case Against Strauss-Kahn
Paul Craig Roberts
July 2, 2011

The New York prosecutor has had to tell the judge that the police and prosecutors have lost confidence in their sexual assault case against former IMF chief Dominique Strauss-Kahn. The judge has released DSK from house arrest and returned his bail and bond money.

The prosecutors say that the immigrant hotel maid lied to the police about the incident and about other things, and the police have revealed that the “victim” discussed with an imprisoned man the possibility of turning the case into extortion. According to the New York Times, the maid’s jailed confidant was among a number of people who had made multiple cash deposits totaling $100,000 to the maid’s bank account. The police now suspect that the maid has connections to illegal drugs and money laundering.

The prosecutor says that he will continue to investigate the case. What that means is that the prosecutor, a politically ambitious Cy Vance, is going for a misdemeanor plea from DSK to save the prosecutor’s face from injudiciously being drawn into an extortion/reputation-destroying plot against the man who French polls indicated was the public’s favorite in the upcoming French presidential election in which President Sarkozy, Washington’s puppet, is seeking reelection. The prosecutor is sending DSK’s legal team the message that the case is being kept open and could be reinstated unless DSK’s attorneys secure DSK’s permission to negotiate a deal on a minor charge, which essentially has no punishment, but saves the faces of the NY prosecutor and police.

We will probably never know whether the maid thought the scheme up on her own or whether it came from Sarkozy’s operatives and their US allies. One indication that DSK’s political enemies are implicated is the fact, made public by the French press, that Sarkozy’s political team in France knew about DSK’s arrest before the NY police announced it. This fact did not stop the NY prosecutor and police from painting DSK as guilty in numerous public statements and in unethical if not illegal leaks to reporters.

When police and prosecutors convict a suspect in the media before he is even charged, it typically means that there is no evidence against him and that demonization is serving as the substitute. Conviction is what is important to the system, not a determination of innocence or guilt.

On numerous Internet sites, I pointed out the problems with the case against DSK. For informing people of the obvious, I was denounced by the right-wing and the left-wing.

The right-wing gave me the finger for doubting the word and integrity of police and prosecutor. Didn’t I know that these are the honorable guardians who protect the public from crime? How dare I question anything the police and prosecutor did or do. What was I, some kind of pinko-liberal-commie?

The left-wing also gave me the finger and said that I had revealed my real self as nothing but an apologist for the rich and powerful and for men who seduce women. How much was I paid for my service to the rich and powerful and seducers of innocent women?

The feminist left denounced me as a misogynist. Only a woman-hater could take the side of a rapist against his victim.

It is all so tiresome to endure the stupidity of people. Little wonder they are losing their liberty, their jobs and incomes, and their country and self-respect.

With DSK’s reputation in tatters and DSK knocked out of the French presidential election and removed from the IMF, where he was beginning to raise questions about the establishment’s use of the IMF to bail out rich bankers on the backs of poor peasants, the “justice system” has done its work. It is now safer for the authorities to release him than to risk a trial. The shrill bleating of the maid’s legal team signifies their agony at having lost their share of the hoped-to-be extorted millions now that a monetary settlement would clearly indicate obstruction of justice and prison for them all.

Those few who actually care about justice, not only for DSK and everyman, but also for the Greek, Spanish, Irish, and Portuguese people, can find comfort in the fact that apparently DSK had come to New York in order to speak with Nobel economist Joe Stiglitz about a more humane and democratic way to resolve the sovereign debt crisis in Europe than the one imposed by the private creditor banks.

Obviously, anyone who would consult with Stiglitz is perceived by the rich and powerful as a threat to their interest.

However, this obvious fact has made no impression on the left-wing, which has issued its shrill cries that, once again, the money of the rich and powerful has prevailed over law and justice.

Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously the editor of the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.

The SDK Case Crumbles

Robert Sterling
Konformist.com

The sexual assault case against Dominique Strauss-Kahn collapsed after revelations of the maid's dubious history left in doubt her allegations against DSK. Tellingly, the problem's with the maid and her history were made AFTER his replacement as head of the IMF was picked, so there was no longer an open position that he could return to. While the charges have still not been dropped, it seems only a matter of time, as prosecutors seem to cling in hope that DSK pleads to a misdemeanor charge rather than file a lawsuit against them for reckless prosecution. Either way, he appears to be set to be free soon enough.

Most of the news on the breakdown of this case has focused on the sketchiness of the maid's past, and there's a lot of sketchiness there. Her boyfriend, an incarcerated drug-dealer, is among those who have made cash deposits in her bank account totalling over $100,000, which pretty much makes a slam dunk case of money laundering against her. It is her boyfriend she spoke to on the phone and indicated there was a lot of money to made pressing charges against DSK, more than suggesting an ulterior motive. Meanwhile, she had previously lied about being raped on her own political asylum papers. Finally, she had been caught in lies involving details on the SDK case alone.

Still, focusing on the maid and her credibility problems seems to miss the point. After all, as history would show, even the most credible and honest of rape victims has difficulty facing a team of high-priced lawyers, and is likely to back out of testifying. Despite this, and despite having collected no evidence to back up her story, and despite not even interviewing DSK yet to find out his version of events, they risk an international incident by arresting one of the most powerful men on the planet on the flimsiest of evidence. Her checkered history only explains her own apparent lies, it doesn't explain the NYPD and prosecutor's response. It seems that her shady past fits in with the idea of a frameup here, as she was picked by those planning to frame SDK due to the ease they could blackmail her into doing what they want. In the end, if this was a frameup, it is already a success no matter how it ends, as the primary goal, to remove DSK as head of the IMF, has already been successful.

NEXT QUESTION ON STRAUSS-KAHN: Was He Set Up?

Henry Blodget | Jun. 30, 2011
http://www.businessinsider.com/was-strauss-kahn-set-up-2011-6

"Not guilty," he said, and not a soul believed him.

Following the extraordinary news that the maid who brought rape charges against former IMF head and French presidential candidate Dominique Strauss-Kahn may have lied about the incident, the next question is...

Did someone set Strauss-Kahn up?

If so, who? One of his political rivals in France?

Could this be the biggest political scandal in history?

According to the New York Times, prosecutors now think the hotel maid who says Strauss-Kahn raped her is lying about some of what happened.

They have also found that the woman has received $100,000 in cash from an incarcerated drug-dealer over the past two years, and that she called him the day after the incident to discuss whether she should press charges. (There is a tape of this call.) The woman also apparently owned 5 cell phones after telling prosecutors she only had one and has lied in an application for political asylum.

Now, you can have lied in the past and still get raped, so to consider dropping the charges (which they are), prosecutors must also now think the woman is lying about the event.

And, if she is lying about the incident, the cash and the cell phones raise the question of why she is lying--and whether she was working for someone. And if so, who?

Before he was arrested in New York, Strauss-Kahn himself suggested that his biggest weakness as a presidential candidate was his fondness for women. Specifically, he suggested, someone might be able to set him up.

So did someone set him up?

Could this be the biggest political scandal in history?

Obama, financial war and the elimination of DSK

Thierry Meyssan
28 May 2011
http://www.voltairenet.org/article170083.html

It is impossible to understand the downfall of Dominique Strauss-Khan without linking it to his project for the creation of a new international reserve currency, which was to be launched on 26 May 2011 at the Deauville G-8 summit. The project was paradoxically anticipated as much by the Emerging States as by stateless capital, but rejected by the U.S.-Israeli military-industrial complex. Thierry Meyssan exposes the chicanery of the Obama administration to dodge its commitments.

The French were dumbstruck at the arrest in the United States of the most popular political leader of their country, Dominique Strauss Khan. Former Economy Minister, he had become the highest-paid public official in the world (base salary, excluding bonuses and expenses: 461 510 USD) and was, reportedly, about to enter the French presidential race. This affable VIP, reputed for his appetite at the table as well as in bed and often accused of being a political amateur because of the time he dedicated to satisfying his lust for life, has been charged with the precipitous sexual assault on a chamber maid in a Manhattan hotel.

For six days, the French remained glued to their television screens watching in a daze the judicial harassment against a man they considered to be a hopeful alternative to the catastrophic first five-year term of Nicolas Sarkozy. DSK’s fall marked the end of their illusions.

The spectacle of this shattered destiny is suggestive of ancient tragedy. The Roman saying: "Arx tarpeia Capitoli proxima" comes to mind: the Tarpeian Rock from which a convicted person was hurled to his death was close to the Capitol, the symbol of power and greatness.

Leaving aside any considerations of his innocence or guilt, the steamrolling of such a high-profile personality can only provoke anguish in the ordinary citizen. If someone like him is unable to defend himself, then how can we hope to succeed if we were to be accused like him?

The rise and the fall

Nevertheless, as a politicized people raised on Machiavellian lessons, without ever having read his works, it didn’t take the French long to start questioning the solidity of the charges brought against their compatriot DSK. According to the opinion polls, 57% didn’t buy the rutting-season story that the U.S. media have taken delight in dishing out. Some started imagining all kinds of manipulation scenarios, while others are asking "cui bono?" (who benefits?).

At that game, the first name that comes to mind is that of Nicolas Sarkozy. It is impossible not to think of him knowing that he became president by pressing charges against his chief rival, Dominique de Villepin, and entangling him in a forgery scandal just as convoluted as the current one. Therefore, why not another plot to move a new competitor out of the way?

Never mind if DSK and Sarkozy have needed each other to prepare the forthcoming international summits, or if they were both subservient to the United States. It is well known that the worst crimes are perpetrated against one’s own friends or even family.

As is happens, the French are unaware of DSK’s ties [1] or, for that matter, Sarkozy’s when they voted for him [2]. The media have never informed them that in the 1990’s, during his political wilderness, he was hired as professor at Stanford University by a certain... Condoleezza Rice. They also don’t know that he and his lieutenants Pierre Moscovici and Jean-Chrisophe Cambadélis were in charge of raising funds for the Socialist Party from the National Endowment for Democracy - a legal CIA front [3]. Nor did they follow his activities and various contracts with Atlanticist think-tanks, such as the German Marshall Fund of the United States [4] or the Bilderberg Group [5]. Finally, they are oblivious about his commitment to integrate France and Europe into a vast transatlantic market dominated by the United States.

Nor do the French know anything about DSK’s close links to Israel. Within the Socialist Party, he steers the Cercle Léon Blum, named after a former Jewish prime minister. The role of this discreet and powerful lobby is to eject from the political scene any individual who is likely to criticize the Zionist project. Thus, it can make heads roll, like that of political scientist Pascal Boniface who highlighted the electorally counter-productive implications of supporting Tel-Aviv in a country where 10% of the population is of Arabic culture. Yet, DSK is very open about it. Without beating around the bush, he asserted: "I deem that every diaspora Jew must support Israel. For that reason, it is important for Jews to take up political responsibilities. In short, in my functions and in my everyday life, in everything I do, I endeavor to make my modest contribution toward the construction of Israel." It’s rather disconcerting from someone who aspires to become president of France. But who cares? He’s so jovial!

However, Dominique Strauss-Khan and his loved ones were spared no humiliation: while kept incommunicado under protective police custody, the New York prosecutor’s office was distributing to the media copies of the detailed indictment.

It contains a clinical description of the alleged crimes: "The defendant engaged in oral sexual conduct and anal sexual conduct with another person by forcible compulsion; the defendant attempted to engage in sexual intercourse with another person by sexual compulsion; the defendant subjected another person to sexual contact by forcible compulsion; the defendant restrained another person; the defendant subjected another person to sexual contact without the latter’s consent; and in that the defendant intentionally, and for no legitimate purpose, forcibly touched the sexual and other intimate parts of another person for the purpose of degrading and abusing such person, and for the purpose of gratifying the defendant’s sexual desire.
The offenses were committed under the following circumstances:

Deponent states and deponent is informed by an individual known to the District Attorney’s office that defendant 1) shut the door to the above location and prevented informant from leaving the above location; 2) grabbed informant’s breasts without consent; 3) attempted to pull down defendant’s pantyhose and forcibly grabbed informant’s vaginal area; 4) forcibly made contact with his penis and informant’s mouth twice; and 5) was able to accomplish the above acts by using actual physical force."

All these juicy details were splashed all over the evening news for days on end before wide-eyed parents just back from work, and before horrified children who buried their noses in their bowl of soup.

The cultural shock

It is difficult to know who was more traumatized: the brilliant economist who was going to save humanity from the financial crisis and has been abruptly relegated to the ranks of an infamous criminal, or the French people who were looking forward to a respite by choosing him as their leader, and have been compelled once again meet head-on the violence of the United States.

In this regard, the French are trying to find excuses for the nature of the Anglo-Saxon judicial system to which they are just beginning to awaken. They had already seen such a parody of justice in their favorite television series, but they never imagined it could actually exist in reality. As for the extra-judicial system, Guantánamo and the secret prisons, they have always preferred not to know. Some commentators have speculated that the harsh treatment at the hands of the police and the first judge denotes a will to treat the powerful and the weak on an equal footing. Yet, surely, they must all be familiar with the works of illustrious sociologists explaining that in this unjust system money is king and that justice may be blindfolded, but is not class blind.

Furthermore, the French unflinchingly went along with the criticisms relayed by the Anglo-American press, laying all the blame on its French counterparts for having failed to investigate Mr. Strauss-Khan’s life of sexual depravity in the name of his right to privacy. And yet - the puritans comment further - a man who ostensibly seduces a women, squeezes or even jostles her is obviously a potential raper. "He that will steal a penny will steal a pound." On its cover, Time Magazine depicts DSK and his peers in the guise of a pig. However, no one has pointed out that the defendant was IMF Managing Director and a Washington D.C. resident for the past 3 years, but whose hidden vices the moralizing Anglo-American press has also failed to dig into.

The accusation against DSK having opened up suspicions, now everyone remembers - albeit somewhat late - that in 2002 DSK had tried to force himself on a beautiful French journalist, Tristane Banon. When she asked him for an interview, he gave her an appointment in a private apartment located in the Marais, a historic district of Paris. He received her in a huge loft, completely unfurnished except for a big bed. Since the beauty refused to submit to the libertine, he bashed her.
Could it be that, in New York, the gentleman was overwhelmed by his own violence and transformed into a criminal?

Nothing seems to point in that direction, all the more since DSK is not a frustrated bachelor. He is married to television star Anne Sinclair, a French top-notch journalist, who abandoned her profession to accompany her husband in his career. The French saw her again during Dominique Strauss-Khan’s court hearings, as beautiful and determined as ever despite the extra years. The grand-daughter of a major art merchant, she sits on a cushy family fortune. Without hesitation, she flew to Paris to pay the one-million dollar bail and provide the court with an additional 5 million in collateral. At that moment, this wealthy woman was prepared to sacrifice everything to rescue her husband from the crushing jaws of United States justice. She was all the more admirable for it; a wife who didn’t hold his escapades against him and who even liked to go with him to the Chandelle, a Paris swingers club.

Any nation worthy of that name would not have endured to see a political figure, who was slated to become president and represent their country, walking handcuffed between two FBI officers, shoved in the back of a car like a thug, and paraded in court shaggy and unshaven. In any other country, people would probably have staged a rally in front of the U.S. Embassy chanting patriotic songs. But not in France. The "Americans" are far too admired. The French look up to them like a rabbit hypnotized by a cobra. And they have a hard time accepting that they are not the navel of the world, that if indeed there was a plot, it was not necessarily hatched on the banks of the Seine but on those of the Potomac.

The confinement

Is DSK guilty of rape or is he victim of a machination? One only has to think in order to answer the question.

The defendant allegedly spent the night with a call-girl, then raped the chambermaid at brunch time before calmly going to have lunch with his daughter, a student at Columbia University. Finally, he is supposed to have boarded his flight, booked several days in advance, bound for Berlin where he was to meet Chancellor Angela Merkel. Comfortably settled in his Air France business class seat, he was arrested ten minutes before takeoff.

According to the cabin crew, the officers of the Special Victims Unit (the same as in the NBC "Law and Order SVU" serial) didn’t delegate the questioning procedure to their airport counterparts, insisting on doing it themselves despite the risk of arriving too late. However, to prevent any warning from reaching DSK, they ordered the cell phone jamming of the zone until their arrival [6]. Now, this kind of jamming operation exceeds the scope of a vice squad. It could only have been ordered by national security services.

As soon as the suspect was placed under police custody, he was cut off from any external contact, with the exception of his lawyers, as prescribed by U.S. law. But when Judge Melissa Jackson moved him into protective custody, he was again cut off from the outside world. With no reason. It was explained that DSK’s detention was warranted for fear he might flee to France, with which Washington did not sign an extradition agreement and which has protected another sexual offender accused of rape, film director Roman Polanski. The decision to isolate him was therefore not taken with the aim of preventing him from influencing the witnesses. Nonetheless, the judge decided to lock him up at Rikers Island, one of the largest prisons in the world which houses 14 000 detainees, and one of the bleakest. A hell on earth. "For his protection", he was assigned to a single cell and kept incommunicado.

The IMF Managing Director was held in confinement for 10 days. During this period the functioning of the international institution was blocked in want of a signature. For 10 days the problems related to the euro and the dollar, Greece’s default, and many others crucial issues were put on standby at the mercy of the police, judges and prison guards.

According to U.S. jurisprudence, considering that he had no criminal record and is domiciled in Washington, DSK should not have been placed in protective custody but should, instead, have been released on bail. He obviously quickly assessed the situation and, through one of his lawyers, sent a letter of resignation to the IMF. On the very next day, against all expectation, a new judge acceded to his request and released him on bail, under house arrest and tight surveillance, pending trial. Indeed, it was no longer necessary to keep him locked up now that the IMF had recovered its freedom to act.

French Economy Minister Christine Lagarde, who made a career in the United States defending the interests of the military-industrial complex [7], is sounded out to succeed the defendant at the helm of the IMF, despite Russia’s and China’s cries of outrage.

Incidentally, DSK’s second lawyer Benjamin Brafman didn’t visit him in prison and was not present at the second court hearing. The star of the New York Bar Association departed precipitously for Israel. Officially, it was to celebrate a religious feast with his family [8]. To claim his fees, Mr. Branfman didn’t simply limit himself to lighting candles on Lag BaOmer, he also must have negotiated to obtain assistance for his client.

The Zhou project

Why were Hollywood-like means deployed to block the IMF during 10 days? There are two possible answers, and they may be linked.

In the first place, on 29 March 2009, the governor of the People’s Bank of China, Zhou Xiaochuan, challenged the predominance of the dollar as reserve currency. Deploring that the objective of economist John Maynard Keynes to create an supranational currency (the Bancor) was not achieved at the end of World War 2, he suggested that the IMF Special Drawing Rights could be used to fulfill this function [9]

At the London G20 summit on 2 April 2009, yielding to pressure, the United States agreed to the tripling of IMF resources and to the issuance by that institution of Special Drawing Rights (SDR) for a value of 250 billion dollars. They also acquiesced to the principle of a Financial Stability Council associating the major emerging countries.

This idea was debated at the G8 summit at L’Aquila (Italy) on 8 July 2009. Pushing the pin further, Russia submitted that the new world currency should be minted rather than being virtual. Dmitry Medvedev, who had a few sample of coins minted, slapped them on the table. One side displays the faces of the eight Heads of State, whereas the flip side bears the motto "Unity in Diversity" [10].

The project was submitted to experts from the United Nations Department of Economic and Social Affairs. Their report, in which Professor Popov of the New Economic School of Moscow took part, was examined on 25 April 2010 by a joint IMF and World Bank meeting [11].

This project should have seen the light of day on 26 May 2011 at the G8 summit in Deauville (France). The dollar would thus have met its demise as the reserve currency against the backdrop of an imminent cessation of payments on the part of the U.S. Federal Government. As for Washington, it would have had to give up financing its super-powerful military apparatus through debt and to start concentrating on its domestic restructuring.

The Libyan dinar is the first (and last?) currency backed by gold and by IMF Special Drawing Rights. In 2000, Colonel Gaddafi had thought of creating a pan-African currency based on gold, but was unable to pursue his idea. Also, in 2009, he had spontaneously availed himself of the Zhou project and adopted it unilaterally for his country.

The spanner in the works

Unfortunately, in the final months of this process, military and political initiatives disrupted the plan. Countries such as Russia and China were double crossed. DSK’s arrest exposes Washington’s bad faith, and shows that its concessions were a only ploy to gain time.

Although the exact details of Dominique Strauss-Khan’s device for the creation of the new currency sustained by IMF Special Drawing Rights remain secret, it would appear that Libya had a key role to play. On an experimental level, the Libyan Central Bank was the first to base its currency, the dinar, on gold and later on SDRs. This aspect is especially important considering that Libya possesses one of the largest sovereign wealth funds in the world, exceeding even that of Russia.

By waging war against Libya, France and the United Kingdom generated a theoretical asset freeze targeting not only the Gaddafi family but also the Libyan state. Worse, Paris and London dispatched HSBC bank executives to Benghazi to set up a rebel Libyan central bank and attempt to grab the national assets [12]. Without knowing whether Nicolas Sarkozy and David Cameron got carried away by their own hubris or acted on instructions from their bosses in Washington, the fact remains that the fragile edifice developed by Dominique Strauss-Khan has collapsed.

According to our contacts in Tripoli, at the time of his arrest, DSK was headed for Berlin in order to work out a solution with Chancellor Angela Merkel. Afterwards, he and a German envoy were supposed leave to negotiate with Colonel Gaddafi’s representatives, and very possibly with Gaddafi himself considering that his signature was indispensable for unblocking the situation.

We are now witnessing a financial war on an unprecedented scale. While the economic situation of the United States is on the brink and the dollar could rapidly turn into monkey currency, the agreement concluded at the G8 and endorsed by the G20, implemented by the IMF in conjunction with the World Bank and the international banking circles, of which DSK was the architect, has been suspended. The hegemony of the dollar remains intact albeit more artificially than ever. The dollar which the emerging states wanted to resize but on which the U.S.-Israeli industrial-military complex rests its power.

In that context, what is one man’s honor worth?

Thierry Meyssan

French intellectual, founder and chairman of Voltaire Network and the Axis for Peace Conference. His columns specializing in international relations feature in daily newspapers and weekly magazines in Arabic, Spanish and Russian. His last two books published in English : 9/11 the Big Lie and Pentagate.

French minister resigns after being accused of sexual assault

Georges Tron denies allegations made by two women who worked for him at town hall in Draveil, near Paris Kim Willsher in Paris
guardian.co.uk, Sunday 29 May 2011
http://www.guardian.co.uk/world/2011/may/29/french-minister-reisgns-accused-sexual-assault


A French minister has resigned from Nicolas Sarkozy's government after he was put under investigation for allegedly sexually assaulting two women who worked for him.

The departure of the civil service minister, Georges Tron – who denies the allegations – was announced by the prime minister, François Fillon, on Sunday.

French prosecutors were in the preliminary stages of investigating accusations of sexual aggression and rape against Tron, whose lawyer, Olivier Schnerb, said were "pure defamation" and "balderdash".

The investigation comes two weeks after the arrest of the former IMF head and Socialist presidential hopeful, Dominique Strauss-Kahn, who is facing sexual assault charges in New York.

Tron's position became untenable after the foreign minister, Alain Juppé, told a television show that although his colleague was "presumed innocent", he should consider resigning because "government ministers had to be above all suspicion."

The two women, aged 34 and 36, have lodged complaints with the public prosecutor, claiming Tron assaulted them between 2007 and 2010 while they worked at the town hall in Draveil, south of Paris, where he is the mayor.

The women claim the assaults started after Tron, who says he is a qualified reflexologist, offered to give the women foot massages. They say it was the arrest of Strauss-Kahn that encouraged them to come forward. "When I see that a little chambermaid is capable of taking on Dominique Strauss-Kahn, I told myself I did not have the right to stay silent," one of them told a French newspaper.

"Other women have perhaps suffered what I have suffered. I have to help them. We have to smash this omerta."

The Strauss-Kahn affair has triggered soul-searching in France about sex and power. After the shock and disbelief of the arrest of the man nicknamed the Great Seducer, French pundits have been questioning whether strict privacy laws and alleged media complicity have enabled politicians and celebrities to get away with unacceptable behaviour. Sunday's edition of the Journal du Dimanche wrote of a "before and an after DSK" (as Strauss-Kahn is known in France).

Strauss-Kahn had already been forced to apologise for a "lack of judgment" after an affair with a junior colleague at the IMF shortly after he took up his post in 2007.

Tristane Banon, a journalist, claimed in 2007 that Strauss-Kahn sexually assaulted her in 2002, but her claims were largely ignored by the mainstream French press and her mother, a Socialist politician and friend of the Strauss-Kahn family persuaded her not to go to the police.

Last week a women's association said one of the women, claiming she had been attacked by Tron, had come forward in November with a "credible" complaint against the 53-year-old minister.

In a statement, the European Association Against Violence Against Women at Work said: "Her credibility is not in question from our point of view."

Tron claims the women have a vendetta against him after being sacked from their jobs. "I am not naive – they are trying to echo an affair taking place the other side of the Atlantic," he told Reuters last week. In an interview prior to his resignation, he said: "The accusations against me are fantasy."

2nd banker in hotel sex bust

Groped maid at superposh Pierre: cops LARRY CELONA, JAMIE SCHRAM and TIM PERONE
May 31, 2011
http://www.nypost.com/p/news/local/manhattan/nd_banker_in_hotel_sex_bust_5t8SbxVPtY026XJSdsJPJM

Another international moneyman has been busted for sexually assaulting a maid at a luxury Manhattan hotel, cops said last night.

Mahmoud Abdel-Salam Omar -- the 74-year-old former chairman of Egypt's Bank of Alexandria -- allegedly groped and "gyrated" against the maid in Room 1027 at The Pierre hotel on Fifth Avenue, a law-enforcement source told The Post.

He was wearing a bathrobe at the time, but it was not clear what, if anything, he had on under it.

The alleged attack came just two weeks after Dominique Strauss-Kahn, the disgraced former head of the International Monetary Fund, was charged with sexually assaulting a maid at the Sofitel hotel in Midtown.

Omar summoned the 44-year-old woman to his room to bring tissues at around 6 p.m. Sunday and quickly locked the door behind her, according to police.

Then, the elderly banker allegedly grabbed her breasts and began kissing her on the lips and neck.

She bravely stood up to him, the source said.

"I'm not up here for that," she told him.

Omar -- who is now the head of El.Mex Salinas, a Middle East-based salt-mining company -- then asked the woman for her phone number, according to the source.

The quick-thinking maid gave him a fake number.

At that point, Omar stepped back and she was able to unlock the door and flee, the source said.

She ran directly to a manager to report the alleged attack.

But the manager told her she had to tell her own supervisor, who wasn't working at the time, according to the source.

The woman reported the attack yesterday and cops were called at around 9:30 a.m., officials said.

"Experienced NYPD detectives found the complainant to be credible," police spokesman Paul Browne said.

Omar -- who lives in Alexandria -- was taken into custody at the hotel, across from Central Park at East 61st Street.

He was brought to the 19th Precinct station house and charged with sexual abuse, unlawful imprisonment, forcible touching and harassment.

Before Omar left the station house, three friends visited the precinct.

"We are friends of his and just wanted to check up on him," said one man in the group who did not identify himself. "We wanted to make sure he was alive. He's an old man but a good man, a family man. He's a grandfather. We just wanted to be sure he was alright."

News of the alleged attack surprised at least one hotel worker.

"People were saying nice things about [him]. They were saying good things about that man," said the worker, who asked not to be identified.

But another employee, who also did not want his name printed, was angry that a colleague had allegedly been attacked.

"Maybe we should have our staff trained to deal with that type of person," he said.

"You never know who you are going to run into."

A Pierre spokeswoman did not immediately return calls for comment.

Additional reporting by Rebecca Harshbarger, Frank Rosario and Wilson Dizard

larry.celona@nypost.com

Vlad Putin on DSK Conspiracy

From CNBC.com:

Russian Prime Minister Vladimir Putin has hinted that there is more to Dominique Strauss-Kahn’s arrest on charges of sexual assault than meets the eye, according to various media reports.

Putin told Interfax news agency that he finds it hard to believe the controversial charges against the Frenchman and is worried that he may have fallen victim to a shadowy plot to discredit him, various UK newspapers reported.

"It is hard for me to evaluate the real political underlying reasons and I do not even want to get into that subject, but I cannot believe that everything is as it seems and how it was initially presented," the Daily Telegraph quoted him as saying. "It does not sit right in my head."

Mere days ago, a French politician alleged that Strauss-Kahn said that Putin was planning to oust him days before his arrest.

"He said the Russians and notably Putin had allied themselves with France to try to have him fired from the IMF to stop him running for (French) president," Claude Bartolone, a socialist politician, said according to the Telegraph...

Putin Hints at Conspiracy Over Strauss-Kahn
Monday, 30 May 2011
Catherine Boyle
http://www.cnbc.com/id/43214487

A tale of two rape charges

May 23, 2011
Naomi Wolf
http://blogs.reuters.com/great-debate/2011/05/23/a-tale-of-two-rape-charges

With the arrest of Dominique Strauss-Kahn, then Managing Director of the International Monetary Fund, New York City has abruptly become the scene of two very different official approaches to investigating sex-crime cases, one traditional and one new. The new approach so far appears to be reserved for Strauss-Kahn alone.

Consider the first case: the ongoing trial of two police officers, Kenneth Moreno and Franklin Mata, charged in the rape of a 27-year-old Manhattan woman. She was drunk, and, after helping her to enter her apartment, Moreno and Mata allegedly made a false emergency call so that they could return to her. At that point, the woman says, she woke periodically out of her intoxicated state to find herself being raped, face down, by Moreno, as Mata stood guard.

The alleged rape of a citizen by a police officer — and the alleged collusion of another officer — is surely a serious matter. But the charges and trial have followed an often-seen pattern: the men’s supporters have vociferously defended their innocence (the presumption of which has been scrupulously upheld in the press); the victim’s pink bra has been the subject of salacious speculation, and her intoxication has been used to undermine her credibility. As the wheels of justice grind unglamorously forward, Mayor Michael Bloomberg has made no public statement supporting the victim’s side.

Moreover, Moreno and Mata have not been asked to strip naked for “evidence” photos, were not initially denied bail, and were not held in solitary confinement, and are not being strip-searched daily. Their entire case has followed the usual timetable of many months, as evidence was gathered, testimony compiled and arguments made.

Then there is the Strauss-Kahn approach. After a chambermaid reportedly told her supervisor at the elegant Sofitel hotel that she had been sexually assaulted, the suspect was immediately tracked down, escorted off a plane just before its departure, and arrested. High-ranking detectives, not lowly officers, were dispatched to the crime scene. The DNA evidence was sequenced within hours, not the normal eight or nine days. By the end of the day’s news cycle, New York City police spokespeople had made uncharacteristic and shockingly premature statements supporting the credibility of the victim’s narrative — before an investigation was complete.

The accused was handcuffed and escorted before television cameras — a New York tradition known as a “perp walk.” The suspect was photographed naked, which is also unusual, initially denied bail and held in solitary confinement. The Police Commissioner has boasted to the press that Strauss-Kahn is strip-searched now multiple times a day — also unheard-of.

By the end of the second day’s news cycle, senior public officials had weakened the presumption of innocence, a cornerstone of any civilized society’s justice system. Treasury Secretary Timothy Geithner was calling for Strauss-Kahn’s resignation from the IMF, and Bloomberg remarked, in response to objections to Straus-Kahn’s perp walk, “don’t do the crime.” Whatever happened in that hotel room, Strauss-Kahn’s career, and his presumption of innocence, was effectively over — before any legal process had even begun.

If Strauss-Kahn turns out, after a fair trial, to be a violent sex criminal, may his sentence be harsh indeed. But the way in which this case is being processed is profoundly worrisome. In 23 years of covering sex crime — and in a city where domestic workers are raped by the score every month, often by powerful men — I have never seen the New York Police Department snap into action like this on any victim’s behalf.

Harriet Lessel, executive director of the New York City Alliance Against Sexual Assault, agrees that this case has seen “a very quick and targeted response,” and points out that rape is “a grossly underreported crime” in New York. Worse, she says, many victims under other circumstances believe that the criminal justice system is unresponsive to their needs and more oriented toward ensuring that the innocent are not convicted.

While Lessel is quick to add that New York has “some great police officers and prosecutors who really care,” she says that the police do not normally issue public statements supportive of victims’ credibility, let alone early on, as they did with Strauss-Kahn’s accuser. Nor has she ever heard of someone being photographed naked as part of the evidence.

So what is happening here?

We now live in a world in which men like former New York Governor Eliot Spitzer, who was investigating financial wrongdoing by the insurance giant AIG, WikiLeaks founder Julian Assange and Strauss-Kahn — whose efforts to reform the IMF gained him powerful opponents — can be, and are, kept under constant surveillance. Indeed, Strauss-Kahn, who had been the odds-on favorite to defeat Nicolas Sarkozy in next year’s French presidential election, probably interested more than one intelligence service.

This does not mean that Strauss-Kahn is innocent or that he is guilty. It means that policy outcomes can be advanced nowadays, in a surveillance society, by exploiting or manipulating sex-crime charges, whether real or inflated.

In other words, ours is increasingly an age of geopolitics by blackmail. Why, after all, were U.S. operatives asked to secure the “biometrics” and DNA of subjects abroad, as some of the U.S. diplomatic cables released by WikiLeaks were revealed?

After Strauss-Kahn’s arrest, a caller to a New York radio talk show, who identified herself as a domestic worker in a New York luxury hotel, reported that “every week” a man in a towel accosts her, seeking sex. Another caller, a hotel manager, confirmed that this is a common way for male hotel guests to solicit sex. The New York Times flagged on its front page a report that hotel domestic workers are often targeted with clients’ requests for sex in exchange for money.

Are these men disgusting predators soliciting desperate, underpaid women? Yes. Is knowing about this economy relevant to the charges against Strauss-Kahn? Maybe.

Unfortunately, such questions may never be investigated, much less answered, for this is not being treated as a typical New York City sex-crime case. The authorities, perhaps with their own agenda, have publicly asserted a foregone conclusion; and that kind of intervention ultimately diminishes the chance of any one of us being able to rely on what used to be real American due process of law.

The Establishment Eliminates A Threat

Paul Craig Roberts
May 20, 2011

The police and the prostitute media have made it impossible for Dominique Strauss-Kahn to get a fair trial. From the moment of the announcement that he had been arrested on suspicion of sexually assaulting a hotel maid, and before he was ever indicted, the accounts given by the police were designed to create the impression that the director of the International Monetary Fund was guilty. For example, the police told the media, which duly regurgitated to the public, that Strauss-Kahn was in such a hurry to flee the scene of the crime that he left behind his cell phone. The police also put out the story that by calling airlines and demanding passenger lists, they managed to catch the fleeing rapist just as his plane was departing for France.

A New York judge denied Strauss-Kahn bail on the basis of police misrepresentation that he was apprehended fleeing the country.

Once he was imprisoned, the police announced that Strauss-Kahn was on suicide watch, which is a way of suggesting to the public that the accused rapist might take his own life in order to avoid the public humiliation of a guilty verdict from a jury.

But what really happened, assuming one can learn anything from press reports, is that Strauss-Kahn, upon arriving at JFK airport for his scheduled flight, discovered that he did not have his cell phone and telephoned the hotel, the scene of the alleged crime. It boggles the mind that anyone could possibly think that a person fleeing from his crime would call the scene of the crime, ask about his left behind cell phone, and tell them where he was.

Then in rapid succession, reeking of orchestration, a French woman steps forward and declares that a decade ago she was nearly raped by Strauss-Kahn. This was followed by Kristin Davis, the Manhattan Madam of the prostitute who did in Eliot Spitzer before he could get the banksters on Wall Street, stepping forward to announce that one of her call girls refused to service Strauss-Kahn a second time because he was too rough in the act.

With hunting season opened, any woman whose career would benefit from publicity, or whose bank account would bless a damage award, can now step forward and claim to have been a victim or near victim of Strauss-Kahn.

This is not to deny that Strauss-Kahn might have an inordinate appetite for sex that did him in. It is to say that long before a jury hears from the maid, or from a prosecutor speaking for the maid “who is too traumatized to appear in court,” the jury has been programmed with the verdict that he is guilty.

Why would he run away if he didn’t do it?

Look at all the women he has accosted!

You get the picture.

I have written about the anomalies of the case. One of the most striking is the confirmed reports in the French and British press that a political activist for French President Sarkozy, Jonathan Pinet, tweeted the news of Strauss-Kahn’s arrest to Arnaud Dassier, a spin doctor for Sarkozy, before the news was announced by the New York police.

Pinet’s explanation for how he was the first to know is that a “friend” in the Sofitel Hotel, where the alleged crime took place, told him. Is it merely a coincidence that the men assigned the task of removing the Strauss-Kahn threat to French President Sarkozy’s re-election had a clued-in friend in the Sofitel Hotel? Did the police clue-in the “friend” before they made the public announcement? If so, why?

What bothers me about the Strauss-Kahn affair is that if the police have evidence that supports their insistence on his guilt, it is pointless for the police to set Strauss-Kahn up in the media. Generally, set-ups like this occur only when there is no evidence or when the evidence has to be fabricated and cannot withstand examination.

As a person who had a Washington career, I find other aspects of the case disturbing. Strauss-Kahn had emerged as a threat to the establishment. Polls showed that as the socialist candidate, he was the odds-on favorite to defeat the American candidate, Sarkozy, in the upcoming French presidential election. Perhaps it was only electoral posturing to help defeat Sarkozy, but Strauss-Kahn indicated that he intended to move the International Monetary Fund away from its past policy of making the poor pay for the mistakes of the rich. He spoke of strengthening collective bargaining, and of restructuring mortgages, tax and spending policies in order that the economy would serve ordinary people in addition to the banksters. Strauss-Kahn said that regulation needed to be restored to financial markets and implied that a more even distribution of income was required.

These remarks, together with a likely win over Sarkozy in the French election, made Strauss-Kahn a double-barreled challenge to the establishment. The third strike against him was the recent IMF report that said China would surpass the US as the world’s first economy within five years.

People who haven’t spent their professional life in Washington may not understand the threat to Washington that is in the IMF report. Whether deserved or not, the IMF has a lot of credibility. By placing China as the number one economic power by the end of the next US presidential term, the IMF thrust a dagger through the heart of American hegemony. Washington’s power is based on America’s economic supremacy. The IMF report said that this supremacy was at its end.

This kind of announcement tells the political world that, as the headline read, “the age of America is over.” For the first time in decades, other countries can see the prospect of escaping from US domination. They don’t have to be puppet states, part of the hegemonic empire. They see the prospect of serving their own people and their own interests instead of those of Washington. European countries, for example, forced to fight for Washington in Afghanistan and Libya, see light at the end of the tunnel. They can now think about refusing.

Although rich and a member of the establishment, and independently of his behavior toward women, Strauss-Kahn made the mistake of revealing that he might have a social conscience. Either this social conscience or the hubris of power led him to challenge American supremacy. This is an unforgivable crime for which he is being punished.

My friend, Alexander Cockburn, an intelligent and civilized person who is derided by right-wingers as a communist, lacks my experience of Washington. Consequently, he thinks that the facts will come out, although he seems to prefer that they come out on the side of the maid and not Strauss-Kahn.

If Alex were the Bolshevik he is said to be, he would know that no high-ranking figure who was serving the establishment would be destroyed on the basis of the word of an immigrant maid living in a sub-let apartment in a building for aids victims. The very notion that the US establishment craves justice to this extent is a total absurdity. Americans are so indifferent to injustice that the American public shrugs off the hundreds of thousands and millions of women, children, and village elders who are murdered, maimed, dispossessed, and displaced by the US military in Iraq, Afghanistan, Pakistan, Yemen, Libya, Somalia, and wherever Washington and the military/security complex, while feeding on power and profit, can claim to be protecting Americans from “terrorists” or bringing democracy to the heathen.

The American criminal justice system is riddled with wrongful convictions and stinks of injustice. The US has a much higher rate of incarceration than alleged authoritarian regimes, such as China, and routinely destroys the lives of young people, and even mothers of small children, for using drugs.

Strauss-Kahn’s indictment serves emotional needs of conservatives, left-wingers, and feminists as well as establishment agendas. Conservatives don’t like the French, because they did not support the US invasion of Iraq. The left-wing doesn’t like rich white guys and IMF officials, and feminists don’t like womanizers. But even if the government’s case falls apart in the courtroom, Strauss-Kahn has been removed from the French presidential race and from the IMF. This, not justice for an immigrant, is what the case is about.

Many Americans are unable to comprehend that authorities would remove a threat with a frame-up. But far worst has occurred. Francesco Cossiga, a former President of Italy, revealed that many of the bombings in Europe during the 1960s, 70s, and 80s, which were blamed on communists, were in fact “false flag” operations carried out by the CIA and Italian intelligence in order to scare voters away from the communist party. Cossiga’s revelations resulted in a parliamentary investigation in which intelligence operative Vincenzo Vinciguerra stated: “You had to attack civilians, the people, women, children, innocent people, unknown people far removed from any political game. The reason was quite simple: to force the public to turn to the state to ask for greater security.”

If democratic governments will murder innocents for political reasons, why wouldn’t they frame someone? Whether innocent or guilty, Strauss-Kahn has been framed in advance of his trial.

Dr. Paul Craig Roberts is the father of Reaganomics and the former head of policy at the Department of Treasury. He is a columnist and was previously an editor for the Wall Street Journal. His latest book, “How the Economy Was Lost: The War of the Worlds,” details why America is disintegrating.

Was Dominique Strauss-Kahn Trying to Torpedo the Dollar?

Mike Whitney
Global Research, May 19, 2011
http://www.globalresearch.ca/index.php?context=va&aid=24867

It's all about perception management. The media is trying to dig up as much dirt as they can on Dominique Strauss-Kahn so they can hang the man before he ever sees the inside of a courthouse. It reminds me of the Terry Schiavo case, where devoted-husband Michael was pegged as an insensitive slimeball for carrying out the explicit wishes of his brain-dead wife. Do you remember how the media conducted their disgraceful 24 hour-a-day Blitzkrieg with the endless coverage of weepy Christian fanatics on the front lawn of the hospital while Hannity, Limbaugh and O' Reilly fired away with their sanctimonious claptrap?

And now you're telling me that that same media is just "doing their job?"

Give me a break.

Whoever wants to nail IMF chief Dominique Strauss-Kahn has really pulled out all the stops. Their agents have been rummaging through diaries, hotel registries, phone records, yearbooks, yada, yada, yada. The UK Telegraph even paid a visit to a high-priced DC knocking shop to get a little dirt from Madame Botox; whatever it takes to make a randy banker look like the South Hill rapist. And they're doing a pretty good job, too. The cops have made sure that the "Great Seducer" always appears handcuffed and dressed in a "pervie" raincoat with 3-days stubble before they parade him in front of the media. On Wednesday--more grist for the mill--they released his mug-shot, an unflattering, deadpan photo that makes him look like Jack-the-Ripper. Was that the intention?

And, that's not the half of it. The Big Money is exhuming every woman he's ever had contact with for the last 30 years hoping they can glean some damning tidbit of information that will convince the doubters that beneath that sophisticated manner and $25,000 suit lurks a closet Bluebeard ready to snap up your daughters and defile your wives. Next thing you know, they'll be trotting out Paula Jones and Tanya Harding claiming they spent a torrid night with the Marquis de Kahn in a trailerpark outside Winamucca.

Where does it stop? Or does it stop? Are we in for another year-long Clinton-Lewinski feeding frenzy where everyday we hear more lurid details about the sexploits of people who don't really interest us at all?

Aren't you at all curious about who's behind this "lynching by media" scam? This is an all-out, no-holds-barred, steel-cage, take-down. The big boys save that kind of action for the worst offenders, that is, for the insiders who have broken "Omerta" or wandered off the reservation. I mean, they locked him up on Riker's Island without bail, for Chrissake. What does that tell you? Even Bernie Madoff was allowed to stay in his $7 million Park Avenue penthouse while he waited for trial, but not Straus-Kahn. Oh, no. He get's the royal treatment, even though he has no criminal record and nothing but the sketchy accusations of a chambermaid against him, he's carted off to the state slammer where he can mingle with hardened criminals while dining on corn flakes and Wonder Bread.

You call that justice?

Can I tell you what this is all about? It's about the dollar. That's right. Strauss-Kahn was mounting an attack against the dollar and now the wrath of the Empire has descended on him like ton-of-bricks. Here's the scoop from the UK Telegraph:

"Dominique Strauss-Kahn, managing director of the International Monetary Fund, has called for a new world currency that would challenge the dominance of the dollar and protect against future financial instability.....

He suggested adding emerging market countries' currencies, such as the yuan, to a basket of currencies that the IMF administers could add stability to the global system....Strauss-Kahn saw a greater role for the IMF's Special Drawing Rights, (SDRs) which is currently composed of the dollar, sterling, euro and yen, over time but said it will take a great deal of international cooperation to make that work." ("International Monetary Fund director Dominique Strauss-Kahn calls for new world currency", UK Telegraph)

So, Strauss-Kahn finds himself in the same crowd as Saddam Hussein and Libyan leader Muammar Gaddafi, right? You may recall that Saddam switched from dollars to euros about a year before the war. 12 months later Iraq was invaded, Saddam was hanged, and the dollar was restored to power. Gaddafi made a similar mistake when "he initiated a movement to refuse the dollar and the euro, and called on Arab and African nations to use a new currency instead, the gold dinar." ("Libya: All About Oil, or All About Central Banking?" Ellen Brown, Op-Ed News) Libya has since come under attack by US and NATO forces which have armed a motley group of dissidents, malcontents and terrorists to depose Gaddafi and reimpose dollar hegemony.

And now it's Strauss-Kahn's turn to get torn to shreds. And for good reason. After all, DSK actually poses a much greater threat to the dollar than either Saddam or Gaddafi because he's in the perfect position to shape policy and to persuade foreign heads of state that replacing the dollar is in their best interests. And that is precisely what he was doing; badmouthing the buck. Only he was too dense to figure out that the dollar is the US Mafia's mealticket, the main way that shifty banksters and corporate scalawags extort tribute from the poorest people on earth. Strauss-Kahn was rocking the boat, and now he's going to pay.

Here's a clip from CNN Money:

"The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency.

The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system....SDRs represent potential claims on the currencies of IMF members.....The IMF typically lends countries funds denominated in SDRs. While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar.

"Over time, there may also be a role for the SDR to contribute to a more stable international monetary system," he said.

The goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to swings in the domestic economy and changes in U.S. policy.

In addition to serving as a reserve currency, the IMF also proposed creating SDR-denominated bonds, which could reduce central banks' dependence on U.S. Treasuries. The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs." ("IMF discusses dollar alternative", CNN Money)

Wow. So DSK was zeroing in on US Treasuries as well as the dollar? That's the whole shooting match.

So, what type of progress was he making in converting USDs to SDRs? According to Reuters: "The IMF general resources credit outstanding increased to 65.5 billion Special Drawing Rights, or SDRs, ($104 billion) on May 12 from 6.0 billion SDRs at December 2007. The so-called new arrangement to borrow, which came into effect on April 1, increased the IMF's available lending resources to 269 billion SDRs on May 12 from 120 billion SDRs on March 31." (http://in.reuters.com/article/2011/05/17/idINIndia-57083920110517?type=economicNews)

Not a bad start for such an ambitious project. It looks like DSK's dream of dethroning the dollar as the de facto "international currency" was beginning to gain momentum. But didn't he know that his actions would anger some very powerful and well-connected people?

Well, if he did; he never let on. In fact, he started mucking around in other stuff, too, like when he intervened on behalf of Irish taxpayers, trying to protect them at the expense of foreign bondholders. That's a big "No no" in banker's world. They keep a list of "people who count", and taxpayers are not on that list. Here's an excerpt from the Irish Times:

"Ireland’s Last Stand began less shambolically than you might expect. The IMF, which believes that lenders should pay for their stupidity before it has to reach into its pocket, presented the Irish with a plan to haircut €30 billion of unguaranteed bonds by two-thirds on average. (Irish finance minister) Lenihan was overjoyed, according to a source who was there, telling the IMF team: “You are Ireland’s salvation.”

The deal was torpedoed from an unexpected direction. At a conference call with the G7 finance ministers, the haircut was vetoed by US Treasury Secretary Timothy Geithner who, as his payment of $13 billion from government-owned AIG to Goldman Sachs showed, believes that bankers take priority over taxpayers. The only one to speak up for the Irish was UK chancellor George Osborne, but Geithner, as always, got his way. An instructive, if painful, lesson in the extent of US soft power, and in who our friends really are.

The negotiations went downhill from there. On one side was the European Central Bank, unabashedly representing Ireland’s creditors and insisting on full repayment of bank bonds. On the other was the IMF, arguing that Irish taxpayers would be doing well to balance their government’s books, let alone repay the losses of private banks." ("Ireland's future depends on breaking free from bailout", Morgan Kelly, Irish Times)

So, Strauss-Kahn stuck up for Irish taxpayers over the banks, the bondholders, the ECB, and the US Treasury. Naturally, that made him persona non grata among the ruling throng.

And, there's more, too, because Strauss-Kahn's vision was not limited to currency alone, but involved broad structural changes to the IMF itself that would have reversed decades of neoliberal policies. DSK had settled on a new approach to policymaking; one that would abandon the worst elements of globalization and put greater emphasis on social cohesion, cooperation and multilateralism. Here's an excerpt from the speech titled "Human Development and Wealth Distribution" he gave in November 2010:

"....Adam Smith—one of the founders of modern economics—recognized clearly that a poor distribution of wealth could undermine the free market system, noting that: “The disposition to admire, and almost to worship, the rich and the powerful and…neglect persons of poor and mean condition…is the great and most universal cause of the corruption of our moral sentiments.”

This was over 250 years ago. In today’s world, these problems are magnified under the lens of globalization....globalization also had a dark side. Lurking behind it was a large and growing chasm between rich and poor—especially within countries. An inequitable distribution of wealth can wear down the social fabric. More unequal countries have worse social indicators, a poorer human development record, and higher degrees of economic insecurity and anxiety. In too many countries, inequality increased and real wages stagnated—failing to keep up with productivity—over the past few decades. Ominously, inequality in the United States was back at its pre-Great Depression levels on the eve of the crisis....

An immediate task is to end the scourge of unemployment....Progressive taxation can also promote equity through redistribution, and this should be encouraged....“Inequality is corrosive” ....“it rots societies from within…it illustrates and exacerbates the loss of social cohesion…the pathology of the age and the greatest threat to the health of any democracy.” ("Human Development and Wealth Distribution", Dominique Strauss-Kahn, IMF)

Can you believe it? DSK is lecturing bankers about redistribution? That's not what they want to hear. What they want to hear is why ripping off poor people actually makes the world a better place. DSK's speech just shows that he wasn't drinking the Koolaid anymore. He was becoming a nuisance and they needed to get rid of him.

Does that mean he didn't rape the woman who was in his hotel room?

Of course not. In fact, he could be guilty. But he deserves a fair trial, and someone's making damn sure he doesn't get one.