The International Monetary Fund has launched an investigation of its director, Dominique Strauss-Kahn, for abuse of power while involved in a relationship with a subordinate.
Strauss-Kahn said he is cooperating with the investigation
The inquiry was set in motion at the initiative of a long-serving member of the institution's governing board, Shakour Shaalan of Egypt, according to an IMF spokesman.
Shaalan "has asked external counsel to conduct an independent investigation and determine the validity of the allegations," an IMF spokesman told the AFP news agency on Saturday, Oct. 18.
"All allegations -- particularly those involving senior management -- are taken extremely seriously," he added.
The law firm of Morgan, Lewis & Bockius had been retained by the IMF to conduct the investigation, which is expected to conclude by the end of the month, The Wall Street Journal reported.
Investigators are looking at whether Nagy was given more than she deserved
According to the report, the investigation focuses on the former French finance minister's relationship with Hungarian-born Piroska Nagy, a married former senior official in the IMF's Africa department.
Nagy resigned in August as the IMF reduced the size of its work force and now works at the European Bank for Reconstruction and Development. The inquiry is looking into whether she received a lerger severance package than would have been expected for an employee with her experience.
Nagy and Strauss-Kahn is said to have exchanged emails about a possible intimate relationship, which apparently began early this year during a conference in Europe, according to The Journal.
Strauss-Kahn said he is cooperating with the investigation, adding that he denies the allegations.
"The IMF is examining an incident which occurred in my private life in January 2008," he said in a statement. "I have cooperated and am continuing to cooperate with outside counsel to the Fund concerning this matter. At no time did I abuse my position as the Fund's managing director."
The world has focused on Strauss-Kahn and the IMF in recent weeks as finance officials contend with the extent of the worst global financial meltdown since the Great Depression.