By Fe Bongolan
As former International Monetary Fund (IMF) Chief Dominique Strauss-Kahn awaits trial for his alleged assault and rape of a Sofitel Hotel maid, the information and evidence bubbling to the surface becomes more compelling a conundrum. This conundrum almost makes you imagine the possibility of conspiracy: a set-up discrediting the man holding the strings and on the brink of a turning point. That includes two ‘smoking guns’ familiar to Americans: a semen-stained dress, and the potential for the entire European Union’s economic collapse from debt default by Greece — a situation quite similar in seriousness to the US sub-prime lending crisis leading to our economic meltdown of 2008.
Having the wisdom of hindsight from two recent sex scandals that rocked the US — those of President Bill Clinton and former NY Governor Eliot Spitzer — it’s easy to see one way how Strauss-Kahn’s defense team could play his case out in the US courts. Both men in positions of power were taken down by their indiscretions and their respective downfalls used to set up political and economic crime. A conspiracy theory with this type of historical backdrop for Strauss-Kahn’s defense may be plausible enough to provide shadow of a doubt for an American jury, particularly in New York. But before we delve into further speculation on this story, we need to dig deeper and focus on what the IMF, Strauss-Kahn’s former place of employment, does and what was about to happen prior to his arrest on May 15.
Near the end of World War II, the IMF was formed to act as global lender to struggling nations working to recover after that war’s devastation, and by its tradition has been headed by a European ever since. In order to qualify for a loan from the IMF, a country needs to become a contributing member, paying in to a “membership fund” contributing a fair percentage of its gross national income to be used by fellow member nations in need. Memberships are “weighted” based on the amount of a country’s annual contribution using the American dollar as benchmark. The more money you have, the more weight and power you carry.
A loan from the IMF, the ‘lender of last resort’, to help struggling nations regain economic footing comes at a cost: IMF’s Structural Adjustment Program (SAP) requires that in order to qualify for IMF assistance, a country must be willing to submit to economic structural change that may not be in keeping with its traditions, cultural values, or be sensitive to its ecological and environmental conditions. These loans are made with one thing in mind: to move a country, for better or worse, towards development that the IMF can consider a “beneficial asset.” Like all loans from any bank, the IMF requires a high degree of fiscal accountability to the parties involved, which in this case includes the European Union.
It was Greece’s lack of accountability that got them into trouble. Since 2001, the government of Greece has failed to truthfully report its official economic statistics. Over a nine year period, Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees to arrange transactions to obscure its high level of borrowing, allowing Greek administrations to spend beyond their means unchecked by European Union overseers. By the time Georgios Papandreou of the Socialist Party took office as Prime Minister of Greece in 2010, his government faced a staggering debt load that denigrated its credit rating to junk status, making Greece virtually unable to pay off its debts without drastic austerity measures. These measures, implemented over the last year, have caused deep social unrest, leading to violent protest and death. They have also not fixed Greece’s insolvency problem.
Dominique Strauss-Kahn was aboard the airliner that was to take him back to a meeting with German Chancellor Angela Merkel on the Greek debt crisis. The meeting’s aim was to angle more capital from Germany, one of the strongest economies in the EU, to keep Greece afloat until it agreed to a debt repayment plan that would not put it or other members of the EU into deep economic jeopardy. Germany had already extended 23 billion euros to Greece to stem its fiscal bleeding in the fall of 2010, at deep political cost to Merkel from members of her own center-right wing party.
Today, Angela Merkel may likely be breathing a short sigh of relief over Strauss-Kahn’s arrest. Without the coordination of the IMF Chief who would bring all the players to the table to deal with this eurozone crisis, the government of Greece may have to agree to the sacrifice of privatizing and selling its principal assets: including the ports of Piraeus and Thessaloniki, and OTE, its primary telecom provider. Imagine the United States selling off the Ports of New York and San Francisco and AT&T and you get the feel of the deal. At least for the short term, Germany is off the hook.
The current leadership void in the IMF raises questions by member nations outside the eurozone to rethink the tradition of selecting a ‘European only’ IMF Chief. Rising economic powers Brazil and China are leading the call for a qualifications-based selection of the new head of the IMF. The lack of transparency in the selection process — also a tradition of the organization — is chafing at the member states who are tired of the American and European grapplehold on the purses of the planet.
For the present, the American justice system is working with facts in hand. DNA evidence on the maid’s dress provides proof of Strauss-Kahn’s participation in a sexual act. Whether or not it was consensual is still up the defense lawyer’s sleeve. Whether or not you subscribe to conspiracy theories, there are plenty of available and convenient circumstances described above that can give you pause to imagine that Strauss-Kahn’s predicament is a set-up on a grand scale, with the strings pulled by the very bankers and heads of state capable of turning countries upside down to insure their own economic stability at the cost of another country’s soul.
As mentioned before in “No Rules,” depending on the strategies of his defense team, the outcome of the rape trial of Dominique Strauss-Kahn may hinge on who and what we value in this world. That may not be so easy an issue to resolve in one rape trial. It may not even come to light at all. But what if it did? Since so many other lives have fallen by the wayside in the pursuit of economic development and stability, what — in the case of a hotel maid who walked into Strauss-Kahn’s hotel room and may have changed history — is one more? That is a string that needs to be tied around and pulled tight on the conscience of the world.