Inner City Press: Investigative Reporting from the United Nations

Strauss-Kahn Air France Upgrades & Sofitel Discounts Afoul of IMF Policy

By Matthew Russell Lee, Exclusive

UNITED NATIONS, May 18 -- With International Monetary Fund managing director Dominique Strauss-Kahn again requesting release on bail from sex crimes charges, the IMF on Wednesday told Inner City Press that

“Mr. Strauss-Kahn's flight, which was booked before he left Washington, was a business class seat. He was apparently upgraded by the airline. This is not unusual given he is the head of the International Monetary Fund.”

But when Inner City Press asked IMF spokesman William Murray if the Fund's policy against its officials receiving such gifts applied in this case, he did not answer the question. Rather, he again told Inner City Press to “ask Air France” -- while how they are in charge of enforcing the IMF's policy on gifts is not clear.

Murray also stated that “Sofitel is not a hotel on the official IMF staff list. As noted by us previously, this was a private visit to NY, and a personal expense.”

Still, if Sofitel lowered the rate on Strauss Kahn's room it was a gift, generally to be rejected but certainly to be disclosed if the discount was -- as reported -- more than $100.

Strauss-Kahn with Ben Ali of Tunisia: one fell, now will the other?

The IMF's policy, not provided by Mr. Murray but found online, is that

Acceptance of gifts, decorations and honors

32. You should never solicit gifts or favors in connection with your IMF duties. Gifts that are offered should normally be declined. However, you may accept a small gift when it would create an embarrassment to refuse it. Under current rules, if its value is clearly less than $100, you may keep it and need not report it. If the value of the gift could exceed $100, you should report it, along with your estimate of its value.

An upgrade from business class to first class on a flight from New York to Paris is presumptively worth more than $100. And the IMF spokesman tells the Press that such upgrades to Strauss Kahn are “not unusual given he is the head of the International Monetary Fund.” So where are the answers, and disclosures?

One of two IMF belated responses to Inner City Press on May 18:

From: Murray, William [at] imf.org
Date: Wed, May 18, 2011 at 5:59 AM
Subject: Air France
To: Matthew Russell Lee [at] InnerCityPress.com

The IMF has contracts with various intercontinental air carriers due to heavy travel requirements from Washington. Air France is among the carriers.

Mr. Strauss-Kahn's flight, which was booked before he left Washington, was a business class seat. He was apparently upgraded by the airline. This is not unusual given he is the head of the International Monetary Fund.

Watch this site.

* * *

As IMF Says Strauss Kahn Paid Hotel, Stonewall on Air France, Pakistan Echoes

By Matthew Russell Lee

UNITED NATIONS, May 16 -- With International Monetary Fund chief Dominique Strauss Kahn being denied bail in New York on the sex crimes charges against him, the IMF in Washington has clarified that it wasn't paying for the $3000 a night hotel room in which the crimes allegedly took place.

The IMF put this clarification online, along with the telephone number of Strauss Kahn's Washington lawyer, “in response to questions.”

But the IMF has still not answered a simple question submitted to its three top spokespeople more than 24 hours ago. Since it was “reported that Strauss-Kahn 'has an arrangement with Air France that allows him to get on any flight and sit in first class' - Please describe that arrangement, including who pays for it, and how much.”

The IMF should answer this type of question. Inner City Press has been contacted by Deena Shehata, the spouse of the IMF's chief in Pakistan Paul Simon Ross, who has asserted under oath that despite repeatedly contacting the IMF to request action on abuse by her spouse (and the IMF's employee), nothing was done.

Click here, here and here to view her affidavit.

Ms Shehata says, the IMF thinks they can do these things to women, whether by failing to protect wives of overseas officials, or in hotel rooms in New York. It seems to be a pattern. Watch this site.

* * *

As IMF Chief Strauss-Kahn Is Arrested, Denials of Rule-breaking Recalled, Immunity & Air France Arrangement Questioned

By Matthew Russell Lee

UNITED NATIONS, May 15 -- With Dominique Strauss-Kahn of the International Monetary Fund having been detained and then this morning arrested for sexual assault allegedly committed in the Sofitel near Times Square, attention has turned to the IMF's failure to discipline him for what its Executive Board called a “serious lapse of judgment” in 2008.

In this case, IMF spokesman William Murray has been quoted that the IMF “has not immediate comment” on the arrest or charges.

IMF staff, too, have been defensive about Strauss-Kahn and his compliance with rules. Inner City Press covers the IMF as well as the wider United Nations, and on March 17 Inner City Press asked the IMF to respond to what sources described as a pattern in which “DSK gets friends and family hired by IMF affiliates.”

At that time, the IMF answer other of Inner City Press' questions, while ignoring this one. Two weeks later, Inner City Press asked:

Sent: Thursday, March 31, 2011 9:58:14 AM
To: IMF, Media Briefing Center

Again, Please state whether Dominique Strauss Kahn has any relatives working in the World Bank or other UN affiliated organizations, and if so why this does not run afoul of anti nepotism rules and principles? From: Matthew Russell Lee Media Outlet: Inner City Press

This time, the question drew a quick answer, albeit a dismissive one, from Mr. Murray:

From: Murray, William [at] mf.org
Date: Thu, Mar 31, 2011 at 10:22 AM
Subject: FW: Question Received (3/31/2011 9:58:14 AM)
To: Matthew Russell Lee [at] InnerCityPress.com

Matthew,

He has no relatives on the staff of the IMF. Given the premise of your question, let me note that the Bank and UN are wholly separate institutions from the IMF, with no fiscal or managerial connections. At the IMF we certainly have nepotism rules, and they have not been violated in any way.

But does the IMF have rules, that they require not be violated?

It's now reported that Strauss-Kahn “has an arrangement with Air France that allows him to get on any flight and sit in first class.” What kind of arrangement is that? Who paid for it, and how much did they pay? Inner City Press has asked three spokespeople of the IMF, including Mr. Murray. Watch this site.

Footnote: Inner City Press has been asked how, if Strauss-Kahn as an IMF official has a form of immunity, he could be detained, questioned and arrested by the New York Police Department. (The IMF has a history of citing immunity, for example for Paul Ross in Pakistan, click here.)

Earlier this year, Inner City Press (un) covered the case of a French diplomat who was arrested for attempted purchase of cocaine and resisting arrest, but was later allowed to flee the country before trial.

The practice is to allow one such flight - but the person is not supposed to re-enter the United States -- which, in the cocaine case, has in fact happened, which neither the French government nor US State Department have yet explained, click here. Watch this site.

* * *

IMF Promotes Bank Mergers, Says Bigger is Better, Politics & Portugal Dodged

By Matthew Russell Lee

WASHINGTON DC, April 15 -- The International Monetary Fund is unabashedly promoting the takeover of small banks by large ones, claiming that its own work in “Emerging Europe” since the financial meltdown shows that communities are better served by large banks, even if based far away or in other countries.

IMF European Department Director Antonio Borges told reporters on Friday that Belgium was smart to have pushed Fortis to being acquired by BNP Paribas. He urged more such mergers.

Inner City Press asked Borges if the IMF proposed any safeguards at all, given that concerns exist that when a local bank is acquired by one based far away, there will be less reinvestment and accountability.

Borges, while calling this an “interesting question,” bragged that the IMF organized a coordinated effort to get large banks to treat communities, particularly in Emerging Europe, fairly, and that this had worked. See IMF transcript, below.

Borges, invisible hand and safeguards on mergers not shown

Inner City Press began to ask about attempts to encourage or require reinvestment, for example in the UK -- but moderator Simonetta Nardin said there was no time for follow up questions.

Meanwhile, Borges took but refused to answer two questions about Portugal, citing an IMF policy against officials working on their own countries, and also claiming that the IMF does not get involved in politics. What -- encouraging bank mergers is not political? Watch this site.

From the IMF's transcript:

Inner City Press: you seem to be saying that bank mergers—small banks being bought by big ones sort of unqualifiedly may be a good thing. In some countries people think that local banks are more accountable, that if you move the assets to a faraway headquarters that there's less responsive. What do you say to that critique and is that something that the IMF takes any account of?

MR. BORGES: you ask a very interesting question, because this is a problem we were faced with over the last few years. In many of the countries of emerging Europe, you find banks that actually are owned by other banks elsewhere and there were concerns that, as there might be problems in the domestic countries of those banks that assets would be pulled out from emerging Europe and they might suffer. And the Fund, the IMF, invested quite a bit of effort to organize a coordinated effort on the part of all these banks to behave in the best possible interests of those economies, and I must say this was quite successful, because as a result, these countries are now recovering very well and their banks are operating well. So, if anything, the experience of emerging Europe demonstrates that having large, solid banks operate in your country may be an important source of stability if things are properly managed.

Click for Mar 1, '11 BloggingHeads.tv re Libya, Sri Lanka, UN Corruption

These reports are usually also available through Google News and on Lexis-Nexis.

Click here for a Reuters AlertNet piece by this correspondent about Uganda's Lord's Resistance Army. Click here for an earlier Reuters AlertNet piece about the Somali National Reconciliation Congress, and the UN's $200,000 contribution from an undefined trust fund. Video Analysis here

Other, earlier Inner City Press are listed here, and some are available in the ProQuest service, and now on Lexis-Nexis.

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