Geithner Calls on Strauss-Kahn to Resign IMF Post

Wall Street Journal reports:

The Obama administration strongly signaled it was time for the International Monetary Fund to replace Dominique Strauss-Kahn as its chief, indicating that he can no longer be effective in his job.

U.S. Treasury Secretary Timothy Geithner, responding to a question in New York Tuesday night, said Mr. Strauss-Kahn—jailed since Saturday on sexual-assault charges—is "obviously not in the position to run the IMF."

In his first public comments on the matter, Mr. Geithner called for more formal board recognition that the IMF's No. 2 official, American John Lipsky, who has filled in since Mr. Strauss-Kahn's arrest, will continue in the role for an interim period.

Mr. Geithner's comments represented an effort to nudge Mr. Strauss-Kahn toward stepping aside, while boosting the clout of Mr. Lipsky in the interim role.

An IMF spokesman declined to respond to Mr. Geithner's comments. He said Mr. Lipsky remains acting managing director "and the fund continues its normal work."

The IMF is contacting Mr. Strauss-Kahn's legal counsel to discuss his future at the organization, two people familiar with the matter said Tuesday. "They have gently inquired through his lawyers about his plans," one person said.

Such discussions are sensitive because Mr. Strauss-Kahn hasn't resigned. He is being held without bail in New York after allegedly sexually assaulting a housekeeper in a New York hotel. The French government and several key European finance officials counseled caution against jumping to conclusions about the case. An attorney for Mr. Strauss-Kahn, Benjamin Brafman, said Monday that he will argue the sex was consensual. "The forensic evidence, we believe, will not be consistent with a forcible encounter," he said at the arraignment hearing.