IMF launches probe into director’s affair with employee

NEW YORK, October 18, 2008 (AFP) - The International Monetary Fund has opened an investigation of its director Dominique Strauss-Kahn and his intimate ties to a subordinate employee -- an affair that echoes the scandal that ousted Paul Wolfowitz from the World Bank last year. The IMF, one of the main players in coordinating global attempts to tamp down the explosive financial crisis, acknowledged Saturday it had hired the law firm of Morgan, Lewis & Bockius to conduct the investigation, expected to be completed by the end of the month.

The inquiry was set in motion at the intitiative of a long-serving member of the institution's governing board, Shakour Shaalan of Egypt.

Shaalan "has asked external counsel to conduct an independent investigation and determine the validity of the allegations," IMF spokesman William Murray told AFP.

"All allegations -- particularly those involving senior management -- are taken extremely seriously," he added.

Strauss-Kahn, 59, considered one of the preeminent European political figures on economic matters, was appointed in September 2007 to head the IMF and help reform the institution.

Murray declined to confirm details reported overnight in The Wall Street Journal, which said the investigation focuses on Strauss-Kahn's