Sex scandal hits IMF as French chief is probed over payoff to lover

A sex scandal is sweeping the International Monetary Fund at a time when it should be fully occupied with the global financial crisis.
IMF chief Dominique Strauss-Kahn is under investigation for allegedly abusing his position after having a sexual relationship with a blonde employee who left with a payoff in August.
The inquiry will consider claims that the 59-year-old former French finance minister gave Piroska Nagy 'special treatment'.

Strauss-Kahn is under investigation over claims he abused his position after having a sexual relationship with Piroska Nagy

Yesterday his cheated wife Anne Sinclair, 60, one of France's most glamorous and respected TV journalists, broke her silence over the affair.
She dismissed it as a 'one-night stand which is now behind us', and said she was still in love with him.
The scandal has sparked a leadership crisis at the IMF. It comes 15 months after former World Bank president Paul Wolfowitz was forced to quit because of alleged favouritism to a junior staff member with whom he had a longstanding relationship.
It has caused huge embarrassment to French president Nicolas Sarkozy, who campaigned last year to install Strauss-Kahn, his former political rival, as the IMF's chief executive.
After British complaints that the job should go to a candidate from outside Europe, the appointment of France's former Socialist finance minister was viewed from Paris as a triumph.
The elegant Miss Nagy, an economist, had been working closely with her charismatic boss at the IMF's Washington headquarters when her Argentinian husband Mario Blejer found 'explicit' emails exposing the affair in January this year. Miss Nagy's lawyer said she accepted a buyout package in August, along with other IMF staff in a cost-cutting drive and was not pressured to leave.
She is now working in London for the European Bank for Reconstruction and Development.
'She accepted a severance package that was generally available, and the terms were the same as were available to others of her grade and seniority,' said the lawyer.
'She received no special treatment of any kind.'

'Still in love': Anne Sinclair with her husband Strauss-Kahn

Investigators are examining claims that Strauss-Kahn either removed his lover from the IMF because her position within the organisation might embarrass him, or else sacked her as an act of retribution when she refused to continue their relationship.
They are also investigating claims that Miss Nagy's severance package was excessive for a person of her position.
Sources said members who had knowledge of the allegations might have been able to use that information in policy and funding disputes with their boss.
Strauss-Kahn has insisted he is co-operating with IMF investigators over the affair.
He said: 'It was an incident in my private life and at no time did I abuse my position as the fund's managing director.'
His wife Miss Sinclair, the daughter of a French mother and American father, married Strauss-Kahn in 1991 after she divorced journalist Ivan Levai. Strauss-Khan had been married twice before and the couple have several children with their previous partners.
She yesterday wrote on her blog that her husband was innocent of abusing his position.
'There is an internal inquiry at the IMF,' she said. 'We are calmly waiting for its conclusion. This shouldn't take too long.
'For my part, this one-night-stand is now behind us. We have turned the page. Can I add that we love each other as much now as when we first met.'
Strauss-Kahn had a high-flying political career during which, as finance minister from 1997-99, he was credited for the economic revival of France.
He was then forced to resign from Socialist Prime Minister Lionel Jospin's government after he was caught up in a corruption scandal.
Despite clearing his name, he failed to win the Socialist Party's nomination for the 2005 presidential election.
Commentators have always pointed to the flamboyant Strauss-Kahn's reputation as a ladies' man. Viewed in Paris as a 'champagne socialist', he has been linked with a number of glamorous women over the years.
A young, unnamed actress also recently claimed that Strauss-Kahn acted 'like a gorilla' after inviting her back to a Paris flat.
And Jean Quatremer, of French daily newspaper Liberation, last year wrote that Strauss-Kahn's 'only real problem' was his fondness for women.