by Michel Chossudovsky
19 May 2011
According to Canadian scholar
Michel Chossudovsky, the arrest of IMF Managing Director
Dominique Strauss-Kahn has all the appearances of a frame-up
ordered by powerful members of the financial establishment, in
liaison with France’s Nicolas Sarkozy, whose presidency has
served the interests of the U.S. at the expense of those of
France and the European Union.
While there is for the moment no
proof of a plot, the unusual circumstances of his arrest and
imprisonment require careful examination.
French President Nicolas Sarkozy and
former IMF Managing Director
Dominique Strauss Khan
Immediately following Strauss Kahn’s arrest,
pressures were exerted by Washington to speed up his replacement as Managing
Director of the IMF preferably by a non-European, an American or a
handpicked candidate from an "emerging market economy" or a developing
Since the founding of the
Bretton Woods institutions in 1945, the
World Bank has been headed by an American
the IMF has been under the helm of a
Strauss-Kahn is a member of elite groups who meet behind closed doors. He
the Bilderberg. Categorized as one of the
world’s most influential persons, he is an academic and politician rather
than a banker. In contrast to his predecessors at the IMF, he has no direct
affiliation to a banking or financial institution.
But at the same time he is the fall guy. His "gaffe" was to confront the
Washington-Wall Street Consensus and push for reforms within the IMF, which
challenged America’s overriding role within the organization.
The demise of Strauss-Kahn potentially serves to strengthen the hegemony of
the U.S. and its control over the IMF at the expense of what former Defense
Secretary Donald Rumsfeld called "Old Europe".
the Presidential Candidate
In recent years, a major shift has occurred in Europe’s political landscape.
Pro-American governments have been elected in
both France and Germany. Social Democracy has been weakened. Franco-American
relations have been redefined, with Washington playing a significant role in
grooming a new generation of European politicians.
The presidency of Nicolas Sarkozy has, in many regards, become a de facto
U.S. "client regime", broadly supportive of U.S. corporate interests in the
EU and closely aligned with U.S. foreign policy.
There are two overlapping and interrelated issues in the DSK frame-up
Both these processes are tied into the clash
between competing U.S. and European economic interests.
Strauss-Khan as a favorite of the Socialist Party, would have won the
presidential elections leading to the demise of "Our Man in Paris"
Nicolas Sarkozy. As documented by Thierry Meyssan, the CIA played a
central undercover role in destabilizing the Gaullist party and supporting
the election of Nicolas Sarkozy. 
A Strauss-Kahn presidency and a "Socialist" government would have been a
serious setback for Washington, contributing to a major shift in
Franco-American relations. It would also have contributed to weakening
America’s role on the European political chessboard. It would also have
changed the balance of power between America and "Old Europe" (namely the
It would have had repercussions on the internal
structure of the Atlantic Alliance and the hegemonic role of the U.S. within
Fifty-seven percent of France’s population, according to a May 17 poll,
believe that Strauss-Kahn was framed, victim of a set-up. He was
detained on alleged sexual assault and rape charges based on scanty
He was detained based on a complaint filed by
the Sofitel hotel where he was staying, on behalf of the alleged victim, an
unnamed hotel chamber-maid:
The 32-year-old maid told authorities
that she entered his suite early Saturday afternoon and he attacked
her, New York Police Department spokesman Paul J. Browne. She said
she had been told to clean the spacious $3,000-a-night suite, which
she thought was empty.
According to an account the woman
provided to police, Strauss-Kahn emerged from the bathroom naked,
chased her down a hallway and pulled her into a bedroom, where he
began to sexually assault her.
She said she fought him off, then he
dragged her into the bathroom, where he forced her to perform oral
sex on him and tried to remove her underwear. The woman was able to
break free again and escaped the room and told hotel staff what had
happened, authorities said. They called police.
Challenging the Washington
What is at stake in the immediate wake of Strauss Kahn’s demise is "regime
change" at the IMF. The
Obama administration has demanded his
replacement by a more compliant individual.
U.S. Treasury Secretary Timothy Geithner,
former CEO of the New York Federal Reserve Bank is pushing for the
replacement of Dominique Strauss-Kahn,
"suggesting he can no longer perform his
duties" as IMF Managing director.
At the opening press conference for the IMF and World Bank meetings
held in Washington, 8-10
"Geithner called for greater formal
recognition by the IMF board that John Lipsky, the fund’s
second-in-command, will continue serving as temporary managing director
for an interim period.
Although Strauss-Kahn has yet to resign
[Editor’s note: Mr. Strauss-Khan announced his resignation on 19 May
2011], sources say the IMF is in touch with his legal counsel to discuss
his future at the organization."
What lies behind the frame-up scenario? What
powerful interests are involved?
Geithner had a close personal relationship with
On the floor of the U.S. Senate (May 18), Senator Mark Kirk of
Illinois, called for the resignation of DSK while calling upon the IMF’s
deputy managing director John Lipsky to "assume full responsibility of the
IMF" as interim managing director. The process of "permanent replacement
should "commence at once," he said.
John Lipsky is a well connected Wall
Street banker, a former Vice Chairman at JPMorgan Investment Bank.
While the IMF is in theory an intergovernmental organization, it has
historically been controlled by Wall Street and the U.S. Treasury.
The IMF’s "bitter economic medicine", the
so-called Structural Adjustment Program (SAP),
imposed on countless developing countries, essentially serves the interests
of creditor banks and multinational corporations.
The IMF is not the main architect of these devastating economic reforms
which have served to impoverish millions of people, while creating a
"favorable environment" for foreign investors in Third World low wage
The creditor banks call the shots. The IMF is a bureaucratic entity. Its
role is to implement and enforce those economic policies on behalf of
dominant economic interests.
Strauss Kahn’s proposed reforms while providing a "human face" to the IMF
did not constitute a shift in direction. They were formulated within the
realm of neoliberalism. They modified but they did not undermine the central
role of IMF "economic medicine".
The socially devastating impacts of IMF "shock
treatment" under Strauss-Kahn’s leadership have largely prevailed.
Dominique Strauss Kahn arrived at the helm of the IMF in November 2007, less
than a year prior to September-October 2008 financial meltdown on Wall
Street. The structural adjustment program (SAP) was not modified.
Under DSK, IMF "shock treatment" which
historically had been limited to developing countries was imposed on Greece,
Ireland and Portugal.
Under the helm of DSK as Managing Director, the IMF demanded that developing
countries remove food and fuel subsidies at a time of rising commodity
prices on the New York and Chicago Mercantile exchanges.
The hikes in food and fuel prices, which preceded the September-October 2008
Wall Street crash, were in large part the result of market manipulation.
Grain prices were boosted artificially by large
scale speculative operations. Instead of taming the speculators and
containing the rise in food and fuel prices, the IMF’s role was to ensure
that the governments of indebted developing countries would not in any way
interfere in the "free market", by preventing these prices from going up.
hikes in food prices, which are the result of outright manipulation
(rather than 'scarcity') have served to impoverish people Worldwide.
The surge in food prices constitutes a new phase of the process of global
DSK was complicit in this process of market manipulation. The removal of
food and fuel subsidies in Tunisia and Egypt had been demanded by the IMF.
Food and fuel prices skyrocketed, people were
impoverished, paving the way towards the January 2011
social protest movement:
Fiscal prudence remains an overarching
priority for the [Tunisian] authorities, who also see the need for
maintaining a supportive fiscal policy in 2010 in the current
international environment. Efforts in the last decade to bring down
the public debt ratio significantly should not be jeopardized by a
too lax fiscal policy. The authorities are committed to firmly
control current expenditure, including subsidies... 
"[The IMF] encouraged the [Egyptian]
authorities to press further with food and fuel subsidy reforms, and
welcomed their intention to improve the efficiency and targeting of
food subsidy programs. [meaning the selective elimination of food
"Consideration should be given to
introducing automatic adjustment mechanisms for domestic fuel prices
to minimize distortions [meaning dramatic increases in fuel prices
without State interference], while strengthening cash-based social
programs to protect vulnerable groups. 
Under the helm of DSK, the IMF also imposed
sweeping austerity measures on Egypt in 2008, while supporting Hosni
"efforts to broaden the privatization
The Frank G. Wisner-Nicolas
Strauss-Kahn was refused bail by Judge Melissa Jackson, an
appointee and protégé of Michael Bloomberg, who in addition to his role
as Mayor is a powerful figure on Wall Street.
Manhattan District Attorney Cyrus Vance Jr. charged (using scanty
"with seven crimes, including attempted
rape, sexual abuse, forcible touching and unlawful imprisonment".
Who is Cyrus Vance Jr.?
He is the son of the late Cyrus Vance who served as Secretary of State in
the Carter administration.
But there is more than meets the eye. Nicolas Sarkozy’s step father Frank
G. Wisner II, a prominent CIA official who married his step mother
Christine de Ganay in 1977 served as Deputy Executive Secretary of State
under the helm of Cyrus Vance Senior, father of District Attorney Cyrus
Is it relevant?
The Vance and Wisner families had close personal ties. In turn Nicolas
Sarkozy had close family ties with his step father Frank Wisner (and his
half brothers and sisters in the U.S. and one member of the Wisner was
involved in Sarkozy’s election campaign).
It is also worth noting that Frank G. Wisner II was the son of one of
America’s most notorious spies, the late
Frank Gardiner Wisner (1909-1965), the
mastermind behind the CIA sponsored coup which toppled the government of
Mohammed Mossadegh in Iran in 1953. Wisner Jr. is also trustee of the
Rockefeller Brothers Trust.
While these various personal ties do not prove that Strauss-Kahn was
the object of a set-up, the matter of Sarkozy’s ties to the CIA via his step
father, not to mention the ties of Frank G. Wisner II to the Cyrus Vance
family are certainly worth investigating.
Frank G. Wisner also played a key role as
Obama’s special intelligence envoy to Egypt at the height of the January
2011 protest movement.
May 16, 2011
Innocent before proven guilty? The U.S. media has already cast its verdict.
Will the court procedures be manipulated?
One would expect that Strauss-Kahn be granted a fair trial, namely the same
treatment as that granted to thousands of arrests on alleged sexual
aggression charges in New York City.
How many similar or comparable alleged
sexual aggressions occur on a monthly basis in New York City?
What is the underlying pattern?
How many of these are reported to the
How many are the object of police
follow-up once a complaint has been filed?
What is the percent of complaints
submitted to police which are the object of police arrest?
How many of these arrests lead to a
What are the delays in court procedures?
How many of these arrests lead to
release without a judicial procedure?
How many of the cases submitted to a
judicial procedure are dismissed by the presiding judge?
How many of the cases which are not
dismissed are refused bail outright by the presiding judge?
What is the basis for refusing bail?
How many are granted bail?
What is the average amount of bail?
How many are imprisoned without bail
based on scanty and incomplete evidence?
How many of those who are refused bail
are sent to an infamous maximum security prison on
Rikers Island on the orders of
Press reports state that full diplomatic immunity does not apply to
officials of the United Nations and the Bretton Woods institutions, namely
that the U.S. did not ratify the protocol.
U.N. convention on privileges and immunities for international agencies that
most countries have ratified. It gives the heads of U.N. agencies broad
immunity in the countries where they are based. But the U.S. government
never became a party to that treaty. Employees of international agencies are
covered by a U.S. statute that gives only limited immunity.
The relevant questions are,
How has this limited immunity provision
been applied in practice?
Namely how many people with limited
immunity (UN officials, officials of the Bretton Woods institutions)
have been arrested and sent to a high security prison?
Has Strauss Kahn been given the same
treatment as those arrested under the provisions of "limited
Does the Strauss Kahn arrest fit the
Or is Strauss Kahn being treated in a
way which does not correspond to the normal (average) pattern of
police and judicial procedures applied in the numerous cases of
persons arrested on alleged sexual assault charges?
Without a frame-up instrumented by very powerful
people acting in the background, the head of the IMF would have been treated
in an entirely different way.
The mayor of New York
Michael Bloomberg and
Timothy Geithner would have come to his
rescue. The matter would have been hushed up with a view to protecting the
reputation of a powerful public figure.
But that did not happen...
- How the CIA placed one of its agents at the
presidency of the French Republic", Voltaire Network, by Thierry
Meyssan, 26 July 2008.
2010 Article IV Consultation - Staff Report; Public Information
Notice on the Executive Board Discussion; and Statement by the
Executive Director for Tunisia, September 2010.
IMF Executive Board Concludes 2008 Article IV Consultation with the
Arab Republic of Egypt Public Information Notice, PIN No. 09/04,
January 15, 2009.