IMF chief won’t be dismissed over affair

The head of the International Monetary Fund will remain in his job after the agency’s executive board concluded that there is no cause for dismissal over an extramarital relationship.

The IMF board issued a statement late Saturday saying that the actions of IMF Managing Director Dominique Strauss-Kahn were “regrettable and reflected a serious error of judgment.” However, the 24-member board of directors decided that Strauss-Kahn’s relationship with the former IMF employee was consensual and did not involve any type of sexual harassment, favoritism or abuse of authority.

The board, which represents all 185 member-nations of the lending institution, reached its conclusions at the end of a daylong meeting at IMF headquarters in Washington. In a statement, the board said that based on the findings of an outside law firm hired to investigate the matter and discussions Saturday with Strauss-Kahn, they now consider the incident closed.

The former employee with whom Strauss-Kahn had the affair has been identified as Piroska Nagy, now in London with the European Bank for Reconstruction and Development.

The incident involving Strauss-Kahn occurred 15 months after Paul Wolfowitz resigned as president of the World Bank amid controversy over a pay package for his girlfriend, a bank employee. The World Bank is a sister lending institution to the IMF.