IMF Adopts New Code of Conduct for Relationships After Strauss-Kahn Affair

The International Monetary Fund announced a new code of conduct governing personal relationships between managers and staff three years after a probe into a relationship involving former Managing Director Dominique Strauss-Kahn.

The guidelines were approved on May 6, William Murray, a spokesman for the Washington-based IMF, said in a statement. That was eight days before the arrest of Strauss-Kahn, 62, who is awaiting trial on charges that he sexually assaulted and attempted to rape a hotel housekeeper in New York this month.

“A close personal relationship between a supervisor and subordinate presents a potential conflict of interest and must be reported and resolved, usually by reassignment of one of the individuals to a different work unit,” Murray said in the statement.

Strauss-Kahn faced allegations of misconduct in 2008 over a relationship with a female economist at the fund. The employee, Piroska Nagy, quit in August 2008, and an investigation by the IMF board released in October that year concluded that while Strauss-Kahn had made a “serious error of judgment,” he shouldn’t be fired.

Murray said in the statement that “IMF policies on personal relationships are strong and consistent with best practice, including in the United States.”

He said “failure to report and then resolve the potential conflict of interest constitutes misconduct and is grounds for disciplinary action. Under some circumstances, such a relationship may also constitute harassment and would be investigated. If found to exist, harassment is grounds for disciplinary action up to and including dismissal.”

Strauss-Kahn resigned yesterday, saying in a statement he wanted to devote his efforts to “proving my innocence” in the New York case.

To contact the reporter on this story: Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

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