The apology is awesome. He blames himself for initiating the relationship—see our hardhitting coverage of "One Night In Davos"—with a subordinate. He says it was not abuse of power, meaning that once he made overtures she was powerless to resist.

The whole affair, literally, is embarrassing the French who were pumped to emerge as global leaders fixing this financial mess. They should be embarrassed over this letter, too.

WSJ:

Colleagues:

As you may already know, the Executive Board is undertaking an enquiry into an incident concerning me and a staff member who has since left the Fund. As a matter of good governance, the Board has retained an outside counsel to conduct this inquiry, with whom I have cooperated and am continuing to cooperate. The outside counsel is expected to report to the Board by the end of this month and I am urging that the outcome be made known to staff as soon as possible.

This morning I met with the Board and I would like to repeat to you what I told the Executive Directors. First, I apologized and said that I very much regret this incident. Second, while this incident constituted an error of judgment on my part, for which I take full responsibility, I firmly believe that I have not abused my position. Third, I fully support the process that is underway and I will, of course, follow the Board's guidance as to how best to resolve this matter.

I want to apologize to the staff member concerned for my error in initiating this relationship. She is a talented economist and consummate professional. I acknowledge and regret the difficult situation this has created for her. I also apologize to my wife and family.

Many of you will feel that I have let you down, and I understand those feelings. I can only urge that, especially given the ongoing financial crisis, we all retain our focus on the work of the Fund and the critical role we must play in helping our membership at this time. I also appeal to you to wait for the full facts to emerge and not be distracted by speculation and rumors in the coming days. I am committed to doing what is right for the institution and it is my fervent wish that this matter be resolved as quickly as possible. I also intend to meet with you soon.

Dominique Strauss-Kahn

Hmmm, employees, better bring a chaperone to that meeting.. You might not be able to control yourselves!

PS This pic was taken at the conference where the assignation took place. Do you think it's before or after?