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05-26-2011, 08:14 AM
Lawmakers Concerned About Ex-IMF Director's 'Golden Parachute'
By Judson Berger
Published May 24, 2011 | FoxNews.com
The former head of the International Monetary Fund accused of sexually assaulting a New York hotel maid will receive a $250,000 severance payment -- paid in part courtesy of the American taxpayer -- unless U.S. lawmakers can stop the "golden parachute" from landing in the French politician's bank account.
The IMF claims it has no discretion in the matter of Dominique Strauss-Khan, who was already pulling down nearly $500,000 as managing director when he resigned after being arrested in New York. The one-time severance, along with a much smaller annual pension, was part of his contract.
But considering the heavy financial stake the United States has in the global lender, some lawmakers are trying to exert pressure on an organization that has come under increased scrutiny over how its vast international resources are being used.
"The scandal at the IMF is putting that organization in the public eye again and American taxpayers -- who pay the largest share of the IMF's bills -- are raising a lot of important questions," Rep. Cathy McMorris Rodgers, R-Wash., House Republican Conference vice chairwoman, told FoxNews.com in a written statement.
"What does it say about the IMF that its managing director has a higher annual salary than the president of the United States, that he stays at $3,000-per-night hotel rooms, and that he gets a quarter of a million dollars in severance pay while awaiting charges for [attempted] rape?" McMorris Rodgers asked.
Jim Specht, spokesman for House Appropriations Committee member Rep. Jerry Lewis, R-Calif., said his boss will request hearings in the Subcommittee on State, Foreign Operations, and Related Programs on the IMF directorship, and review what leverage the U.S. might have over operations. Lewis is a member of that subcommittee.
"He definitely wants to look at whether or not something can be done. If not now, certainly in the future," Specht said, adding that Lewis wants to know more about other perks enjoyed by Strauss-Kahn. He said Lewis doesn't want to cut off U.S. support for the IMF, but said the U.S. should have some control over the "behavior" of the agency’s leaders.
"The IMF isn't doing what it's really supposed to be doing ... creating economic opportunity in undeveloped countries," Specht said.
The United States does not support the IMF in the same way it supports organizations like the United Nations. Rather than appropriate money on an annual basis, the U.S. has what amounts to a bank account with the monetary fund. While paying the U.S. interest, the IMF can then use that money on deposit to finance lending elsewhere.
An aide to the House Appropriations Committee expressed doubt about whether the U.S. could apply any pressure regarding Strauss-Kahn's pay, noting U.S. money is not generally used for the IMF's operating expenses, instead interest on loans to other countries does.
But the United States -- as the world's largest economy -- has the largest contribution on deposit with the IMF. As of April 2011, it totaled nearly $64 billion. The United States separately provided the IMF with a more than $100 billion line of credit following a 2009 international agreement.
In the case of Strauss-Kahn, McMorris Rodgers questioned whether the IMF had more leeway than it was letting on.
"Many companies can deny severance pay to any executive fired 'for cause.' That is not happening in the IMF's case. It's becoming more and more clear that the 'culture of entitlement' that is demonstrated by Mr. Strauss-Kahn's lifestyle set a tone for the organization as a whole," she said.
Strauss-Kahn's lavish pay and benefits were established in a 2007 agreement. Under the agreement, his pay was set at about $421,000 and he was guaranteed another $75,000-a-year "allowance," so he could maintain "a scale of living appropriate to your position" -- both have since been adjusted annually for inflation. Strauss-Kahn was to be granted the allowance without having to provide "any certification or justification" for how the money was spent.
As for the severance, the agreement promised him one provided he either served out his term, was fired by the board after at least a year or resigned after at least two years. Strauss-Kahn resigned last week.
His alleged actions might run afoul of the IMF's official code of conduct, which urges officials to adhere to local law and avoid "actions that could be perceived as an abuse of the privileges and immunities conferred on the IMF and its staff."
But asked by FoxNews.com whether the IMF had any discretion to reduce or eliminate his retirement benefits, an IMF representative responded: "No."
Strauss-Kahn has maintained his innocence. In a resignation letter to the board last week, he wrote, "I deny with the greatest possible firmness all of the allegations that have been made against me."
The IMF's congressional critics have sounded off in the past about the organization's dealings.
McMorris Rodgers and Lewis co-sponsored a measure last May to prohibit the use of U.S. dollars toward the IMF bailout of European countries. Other lawmakers slapped together a resolution around the same time expressing opposition to the U.S. role in the European rescue packages. Neither measure advanced.
By Judson Berger
Published May 24, 2011 | FoxNews.com
The former head of the International Monetary Fund accused of sexually assaulting a New York hotel maid will receive a $250,000 severance payment -- paid in part courtesy of the American taxpayer -- unless U.S. lawmakers can stop the "golden parachute" from landing in the French politician's bank account.
The IMF claims it has no discretion in the matter of Dominique Strauss-Khan, who was already pulling down nearly $500,000 as managing director when he resigned after being arrested in New York. The one-time severance, along with a much smaller annual pension, was part of his contract.
But considering the heavy financial stake the United States has in the global lender, some lawmakers are trying to exert pressure on an organization that has come under increased scrutiny over how its vast international resources are being used.
"The scandal at the IMF is putting that organization in the public eye again and American taxpayers -- who pay the largest share of the IMF's bills -- are raising a lot of important questions," Rep. Cathy McMorris Rodgers, R-Wash., House Republican Conference vice chairwoman, told FoxNews.com in a written statement.
"What does it say about the IMF that its managing director has a higher annual salary than the president of the United States, that he stays at $3,000-per-night hotel rooms, and that he gets a quarter of a million dollars in severance pay while awaiting charges for [attempted] rape?" McMorris Rodgers asked.
Jim Specht, spokesman for House Appropriations Committee member Rep. Jerry Lewis, R-Calif., said his boss will request hearings in the Subcommittee on State, Foreign Operations, and Related Programs on the IMF directorship, and review what leverage the U.S. might have over operations. Lewis is a member of that subcommittee.
"He definitely wants to look at whether or not something can be done. If not now, certainly in the future," Specht said, adding that Lewis wants to know more about other perks enjoyed by Strauss-Kahn. He said Lewis doesn't want to cut off U.S. support for the IMF, but said the U.S. should have some control over the "behavior" of the agency’s leaders.
"The IMF isn't doing what it's really supposed to be doing ... creating economic opportunity in undeveloped countries," Specht said.
The United States does not support the IMF in the same way it supports organizations like the United Nations. Rather than appropriate money on an annual basis, the U.S. has what amounts to a bank account with the monetary fund. While paying the U.S. interest, the IMF can then use that money on deposit to finance lending elsewhere.
An aide to the House Appropriations Committee expressed doubt about whether the U.S. could apply any pressure regarding Strauss-Kahn's pay, noting U.S. money is not generally used for the IMF's operating expenses, instead interest on loans to other countries does.
But the United States -- as the world's largest economy -- has the largest contribution on deposit with the IMF. As of April 2011, it totaled nearly $64 billion. The United States separately provided the IMF with a more than $100 billion line of credit following a 2009 international agreement.
In the case of Strauss-Kahn, McMorris Rodgers questioned whether the IMF had more leeway than it was letting on.
"Many companies can deny severance pay to any executive fired 'for cause.' That is not happening in the IMF's case. It's becoming more and more clear that the 'culture of entitlement' that is demonstrated by Mr. Strauss-Kahn's lifestyle set a tone for the organization as a whole," she said.
Strauss-Kahn's lavish pay and benefits were established in a 2007 agreement. Under the agreement, his pay was set at about $421,000 and he was guaranteed another $75,000-a-year "allowance," so he could maintain "a scale of living appropriate to your position" -- both have since been adjusted annually for inflation. Strauss-Kahn was to be granted the allowance without having to provide "any certification or justification" for how the money was spent.
As for the severance, the agreement promised him one provided he either served out his term, was fired by the board after at least a year or resigned after at least two years. Strauss-Kahn resigned last week.
His alleged actions might run afoul of the IMF's official code of conduct, which urges officials to adhere to local law and avoid "actions that could be perceived as an abuse of the privileges and immunities conferred on the IMF and its staff."
But asked by FoxNews.com whether the IMF had any discretion to reduce or eliminate his retirement benefits, an IMF representative responded: "No."
Strauss-Kahn has maintained his innocence. In a resignation letter to the board last week, he wrote, "I deny with the greatest possible firmness all of the allegations that have been made against me."
The IMF's congressional critics have sounded off in the past about the organization's dealings.
McMorris Rodgers and Lewis co-sponsored a measure last May to prohibit the use of U.S. dollars toward the IMF bailout of European countries. Other lawmakers slapped together a resolution around the same time expressing opposition to the U.S. role in the European rescue packages. Neither measure advanced.