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Fri 20 May 2011 09:56 AM

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Former IMF chief gets bail in sex assault case

Dominique Strauss-Kahn will leave a New York jail on Friday on $1m cash bail, $5m insurance bond

Former IMF chief gets bail in sex assault case
Former International Monetary Fund chief Dominique Strauss-Kahn appears for his arraignment in federal court May 16. (Getty Images)
Former IMF chief gets bail in sex assault case
(Getty Images)
Former IMF chief gets bail in sex assault case
International Monetary Fund.
Former IMF chief gets bail in sex assault case
(AFP/Getty Images)

Former IMF chief
Dominique Strauss-Kahn will leave jail on bail on Friday under the
shadow of sexual assault charges as another French official, Christine
Lagarde, builds support to succeed him.

Strauss-Kahn, a global
high-flier seen as having a strong shot at the French presidency until
his arrest over the weekend, spent the last of four nights at New York's
notorious Rikers Island jail on Thursday.

The
package of conditions set by a judge on Thursday to let him leave jail
- $1 million cash bail, a $5 million insurance
bond and house arrest at a New York apartment under armed guard and
electronic monitoring - was due to be signed on Friday.

In
his letter resigning as the International Monetary Fund chief,
Strauss-Kahn vowed to fight charges he tried to rape a hotel maid and
committed other sexual offenses against her.

Once
out of the Rikers cell and in the apartment, he will have unlimited
access to his lawyers to prepare his defence and will be joined by his
wife and daughter.

Strauss-Kahn's
resignation intensified a race for global finance's top job at a
critical time for the IMF as it helps euro zone states such as Greece,
Ireland and Portugal deal with massive debt problems.

The
managing director post has traditionally gone to a European for 65
years but is now in the sights of fast-growing developing economies who
argue it is time for a change.

John
Lipsky, the IMF's American No. 2 who is now the acting chief, said on
Thursday members agreed "the process of selection of the managing
director should be open, transparent and merit-based."

But
a sense of inevitability was growing that Europe would retain the post.
Lagarde, France's finance minister, was seen as the most likely choice.

While
US Treasury Secretary Timothy Geithner called for an "open process
that leads to a prompt succession," sources in Washington said the
United States, the IMF's biggest financial contributor, would back a
European.

The issue will probably
be discussed at a summit of Group of Eight leaders in France next week.
Together, the United States and European nations hold more than half of
the IMF's voting power, giving them a big say over who leads it.

The
IMF board was due to hold a regular meeting on Friday to approve its
part of a 78 billion euro bailout for Portugal but it was unclear
whether it would discuss the process for choosing a new managing
director.

The
case marks a spectacular fall for Strauss-Kahn, who was highly regarded
for his part in tackling the global financial crisis of 2007-09 and the
key role he was playing in efforts to manage Europe's debt crisis.

His lawyer Benjamin Brafman said at a hearing on Monday the evidence "will not be consistent with a forcible encounter."

But
prosecutor John McConnell said the maid who accuses Strauss-Kahn of
trying to rape her, a 32-year-old immigrant from Guinea, had told a
"compelling and unwavering story."

An
arraignment hearing is set for June 6, when Strauss-Kahn will formally
answer the charges, but a trial may be six months or more away. If
convicted, he could face 25 years in prison.

"I
deny with the greatest possible firmness all of the allegations that
have been made against me," Strauss-Kahn wrote in his resignation
letter.

A Reuters poll of economists showed 32 of 56 thought Lagarde was most likely to succeed Strauss-Kahn.

Lagarde
declined to say whether she was interested in the post but told
reporters: "Any candidacy, whichever it is, must come from Europeans
jointly, all together."

A head of
the US law firm Baker & McKenzie in Chicago before she joined the
French government in 2005, Lagarde is a fluent English speaker and has
experience balancing the demands of rich and developing countries.

But she is also under scrutiny.

Judges
at a special French court are expected to decide in mid-June whether to
order an inquiry after a public prosecutor recommended Lagarde be
investigated over an arbitration case involving businessman and former
politician Bernard Tapie.

The prime
ministers of Italy and Luxembourg publicly backed Lagarde on Thursday.
Diplomats in Europe and Washington said she also had support from
France, Germany and Britain - the three biggest European economies.

China and Japan called for a transparent process to choose a successor on merit.

Russia
and other ex-Soviet states backed the Kazakh central bank chief,
Grigory Marchenko. Another possible candidate could be former Turkish
Economy Minister Kemal Dervis, an economist with IMF experience.

But it was not clear whether emerging countries could unite behind a rival candidate.

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