Race to replace IMF head takes a wider path

As Dominique Strauss-Kahn sits in a New York jail cell awaiting his day in court, furious political jockeying is already under way to pick his successor.
Key European countries are insisting on maintaining the 65-year-old tradition of handing the top job at the International Monetary Fund to one of their own – particularly now that the fund is grappling with the debt woes of several euro zone members.
Brazil and other emerging economic powers, meanwhile, argue that the time has come for the stodgy Washington-based institution to break with the past and appoint someone from the developing world.
And some prominent Canadians, including former prime minister Paul Martin, say the job should go to the best candidate from anywhere in the world, pushing Bank of Canada Governor Mark Carney on to the IMF short list.
“The best person available should get the job, and if that person is from an emerging economy or from Canada, I think that’s the person who should be chosen,” Mr. Martin said in an interview.
If fundamental change is on the way, replacing Mr. Strauss-Kahn, who sits in a New York City jail on sexual assault charges, could be a prelude to a broader reshuffling of the global financial order – one that gives more influence to fast-growing and important economies in Asia and South America.
Several key jobs are up for grabs over the next 12 months, including World Bank president, a job that has always gone to an American. Robert Zoellick’s term there ends next year. The No. 2 job at the IMF, also traditionally held by an American, opens up in August with the scheduled departure of John Lipsky, who this week stepped into Mr. Strauss-Kahn’s job on an interim basis.
“The leadership selection system is a problem and is about to change from one where countries or regions have traditionally been entitled to the top spot, to one base on merit and a global selection system to find the very best person,” said Wendy Dobson, the co-director of the Rotman School of Management’s Institute for International Business and a former associate deputy minister at the finance department.
Indeed, there was an understanding among the major powers that control the IMF when Mr. Strauss-Kahn, a 62-year-old former French finance minister, became managing director in 2007 that future appointments to these powerful and prestigious jobs shouldn’t solely be Americans and Europeans, Mr. Martin said.
“There was a tacit understanding that the selection of the next IMF head should be based on merit, and no one should be excluded,” said Mr. Martin, who sits on the IMF’s Western Hemisphere Advisory Group. “The strength of the opinion that it should be an emerging economy or a country like Canada has actually grown since the time of Strauss-Kahn’s appointment.”
John Manley, a whose own ambitions to become NATO Secretary-General were thwarted by European objections, said the Harper government should be making a strong pitch for Mr. Carney.
“This is a unique circumstance,” said the former deputy prime minister, who now heads the Canadian Council of Chief Executives. “I’d love it if we were promoting Carney for that position. I think it’s a long shot, but I think he’d be a great credit to Canada, and a very important contributor to the IMF if he could get it.”
There is mounting pressure to keep the status quo. Already, Germany and Belgium have made it clear they want another European. And the French are pushing Christine Lagarde, the country’s respected Finance Minister. There are “good reasons” for Europe to keep the post in the middle of the euro area’s debt crisis, German Chancellor Angela Merkel told reporters in Berlin.
Mr. Martin dismissed the “crisis” argument, saying the IMF is a “truly global” organization in the wake of recent changes to its ownership structure that gave developing countries more clout and more financial responsibility. And the top job should reflect that, he said.
“At the time of the Asian financial crisis, no one suggested it should be a Korean. At the time of the Latin American debt crisis, no one said it should be from that region,” Mr. Martin pointed out.
Like Mr. Martin, prominent Brazilians say they strongly believe the time has come to break up the U.S. and European monopoly. “There are many good Americans and Europeans, but if an equally strong candidate can be found from emerging-market countries, why not go for change?” Celso Amorim, a former Brazilian foreign minister, told reporters Monday in New York.
When the IMF was created in 1946, there was a dearth of international banking expertise outside the U.S. and Europe. That’s no longer the case. There are numerous suitable candidates from countries such as Brazil, Mexico, Turkey and elsewhere who should be given a shot at the job, said Steven Dunaway, a former top IMF executive from the United States who is now an adjunct fellow at the Council on Foreign Relations.
The IMF has had 10 managing directors since 1946 – four from France, two from Sweden, and one each from Spain, Germany, Belgium and the Netherlands.
Mr. Dunaway said Canada has “done a good job of establishing an independent view” from the Europeans and Americans, and that would make Mr. Carney an ideal candidate.
In spite of all the buzz about shifting power to the emerging economies or Canada, the decision is unlikely to be the open, transparent process Mr. Martin and others want, according to Mr. Dunaway. He said the leadership of the IMF and the World Bank will be decided through “political agreement, behind the scenes.”

Judge Denies Bail to I.M.F. Chief in Sexual Assault Case By JOHN ELIGON

Dominique Strauss-Kahn, the leader of the International Monetary Fund, was ordered on Monday to be held without bail over allegations that he had sexually assaulted a maid in a $3,000-a-night suite at a Midtown hotel.
Prosecutors had asked the judge, Melissa C. Jackson, supervising judge of Manhattan Criminal Court, to remand Mr. Strauss-Kahn, 62, contending that he was a flight risk. They also indicated that a similar attack may have occurred.
“Some of this information include reports that he has in fact engaged in conduct similar to the conduct alleged in this complaint on at least one other occasion,” said John McConnell, an assistant district attorney, adding that the district attorney’s office was still investigating the other occasion, which occurred outside the United States.
In opposing bail, prosecutors highlighted the serious nature of the allegations.
“The defendant restrained a hotel employee inside of his room,” Mr. McConnell said. “He sexually assaulted her and attempted to forcibly rape her,” and when that failed, he forced her to perform oral sex.
Mr. McConnell also said that he saw video of Mr. Strauss-Kahn leaving the Sofitel New York after the alleged attack.
“He appears to be a man who was in a hurry,” Mr. McConnell said.
The criminal complaint says that Mr. Strauss-Kahn shut the door and prevented the woman from leaving, grabbing her breasts, attempting to pull down her pantyhose, grabbing her crotch and forcing her to perform oral sex.
Benjamin Brafman, one of Mr. Strauss-Kahn’s lawyers, argued that “there is a very, very defensible case and he should be entitled to bail,” asking that his client be allowed to post $1 million bail. He said his wife would provide the money. She was scheduled to arrive in New York from Paris at 1 p.m., Mr. Brafman said.
He added that his client was not trying to flee when he was arrested on an Air France plane that was about to take off from Kennedy International Airport on Saturday.
Mr. Brafman said that Mr. Strauss-Kahn’s travel plans had been set for some time, and he indicated that there was evidence that between the time of the alleged attack and his flight, Mr. Strauss-Kahn was in the area, taking care of other business.
He also said that his client had a lunch meeting in the area of the hotel and that his lunch partner would be able to testify. In addition, he said, the hotel security found out he was at the airport only after they called him and he told them where he was.
“That’s not consistent with someone who’s trying to conceal his whereabouts, and get on a flight and leave,” Mr. Brafman said.
But prosecutors said that Mr. Strauss-Kahn’s resources, the lack of an extradition treaty between the United States and France and the defendant’s history were all reasons that he should not be granted bail.
Indeed, Judge Jackson, before ordering remand, indicated that she was concerned about Mr. Strauss-Kahn’s needing to be stopped at the airport.
“When I hear that your client was at J.F.K. Airport about to board a flight, that raises some concern,” she said.
Mr. Strauss-Kahn has been charged with various counts of sexual assault including attempted rape, sexual abuse and criminal sexual act. He faces up to 25 years in prison if convicted.
After Judge Jackson announced that Mr. Strauss-Kahn would be held without bail, Mr. Brafman asked if she would be amenable to changing her decision if he were able to strike a deal with the Manhattan district attorney’s office in which his client would wear an ankle monitor. Judge Jackson indicated that she would not change her ruling, meaning that Mr. Brafman may have to make a bail appeal to the appellate court.
Mr. Strauss-Kahn’s appearance in Manhattan Criminal Court, which lasted only 26 minutes, capped a 43-hour odyssey through New York’s criminal system. He was arrested, held in a special cell in East Harlem, placed in a police lineup, and submitted to a forensic medical exam for possible evidence. He even was subjected to a ritual familiar to high-profile suspects: the so-called perp walk, providing newspapers around the world with a front-page picture of Mr. Strauss-Kahn being led away from a police station in handcuffs.