Regime Change at the IMF: The Frame-Up of Dominique Strauss-Kahn?
by Prof. Michel Chossudovsky
Global Research, May 19, 2011
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 US 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.
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 country.
Since
the founding of the Bretton Woods institutions in 1945, the World Bank
has been headed by an American whereas the IMF has been under the helm
of a (Western) European.
Strauss-Kahn is a member of elite groups who meet behind closed
doors. He belongs to the Bildeberger. 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 US and its control over the IMF at the
expense of what former Defense Secretary Donald Rumsfeld called "Old
Europe".
Blocking Strauss-Kahn, 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 US "client regime", broadly supportive of US corporate interests
in the EU and closely aligned with US foreign policy.
There are two overlapping and interrelated issues in the DSK frame-up
hypothesis.
The first pertains to regime change at the IMF, the second to
Strauss-Kahn as a candidate in France's forthcoming presidential
elections.
Both these processes are tied into the clash between competing US and
European economic interests including control over the euro-currency
system.
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 (See Operation Sarkozy: How
the CIA placed one of its agents at the presidency of the French
Republic, Reseau Voltaire, September 4, 2008)
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 have contributed to
weakening Washington's role on the European political chessboard,
leading to a shift in the balance of power between America and "Old
Europe" (namely the Franco-German alliance).
It would have had
repercussions on the internal structure of the Atlantic Alliance and the
hegemonic role of the US within NATO.
The Eurozone monetary
system as well as Wall Street's resolve to exert a decisive influence on
the European monetary architecture are also at stake.
The Frame-Up?
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
evidence. 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.
http://www.chron.com/disp/story.mpl/business/7565485.html#ixzz1MfFWFlnY
Challenging the Washington Consensus
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.
"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, 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 Strauss-Kahn.
On the floor of the US 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 US 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 economies.
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.
These 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 impoverishment.
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,... (IMF
Tunisia: 2010 Article IV Consultation - Staff Report; Public
Information Notice on the Executive Board Discussion; and Statement by
the Executive Director for Tunisia)
"[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 subsidies].
"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. (IMF
Executive Board Concludes 2008 Article IV Consultation with the Arab Republic
of Egypt Public Information Notice, PIN No. 09/04, January 15, 2009)
Under the helm of DSK, the IMF also imposed sweeping austerity
measures on Egypt in 2008, while supporting Hosni Mubarak's "efforts to
broaden the privatization program".(Ibid)
The Frank G. Wisner Nicolas Sarkozy Connection
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
evidence) Strauss-Kahn "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 Vance Junior.
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 US and one member of the
Wisner family 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.
Did the CIA play a role?
Was
Strauss-Kahn framed by people in his immediate political entourage
including President Obama and Secretary of the Treasury Tim Geithner?
District Attorney Cyrus Vance Junior, son of the late Cyrus Vance, Secretary of
State in the Carter administration
Sarkozy's Step Father Frank G Wisner II, Deputy Executive Secretary of State
(1976-79)
under Cyrus Vance Senior during the Carter administration
In this courtroom drawing, Dominique Strauss-Khan, next to his lawyer
Benjamin Brafman, in front of Criminal Court Judge Melissa Jackson during his
arraignment at the Manhattan Criminal Court (AP)
DSK and Timothy Geithner
DSK and Timothy Geithner
Fair Trial?
Innocent before proven guilty? The US 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 police? 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 judicial
procedure? 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 Michael
Bloomberg.
Diplomatic Immunity
Press reports state that full diplomatic immunity does not apply to
officials of the United Nations and the Bretton Woods institutions,
namely that the US 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 question is 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 immunity"?
Does the Strauss Kahn arrest fit the pattern? 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.
Rikers Island Prison where DSK was imprisoned.
http://www.globalresearch.ca/index.php?context=va&aid=24866
[Non-text portions of this message have been removed]
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