New sex scandal threatens to sink frontrunner for Strauss-Kahn's top job as report reveals IMF's culture of sleaze



Turkish economist Kemal Dervis had 'affair with married subordinate'

Culture of 'predatory behaviour' among IMF bosses

IMF said boss-worker relations were 'not harassment'

Employees afraid to wear skirts to work



Women say complaints swept under the carpet



Affair: Frontrunner to head the IMF Kemal Dervis allegedly had a relationship with a married subordinate when he worked at the World Bank

An alleged culture of sleaze and predatory behaviour among senior executives at the IMF was revealed today - as it emerged that one of Dominique Strauss-Kahn's possible successors had an affair with a married woman.



Kemal Dervis is said to have had a sexual relationship with the subordinate while he worked at the World Bank, which could ultimately disqualify the former Turkish economy minister from taking over the IMF.



It is just one affair within the community of international economists based in Washington and New York that is emerging after Strauss-Kahn was arrested over an alleged sex attack on a New York hotel maid.



A New York Times investigation has revealed the culture of sexual liaisons and aggressive approaches by bosses within the Washington headquarters of the IMF, where U.S. law does not apply.



Women employees at the organisation are said to be afraid to wear skirts for fear of attracting attention.



The woman who is said to have had an affair with Mr Dervis, who was single at the time of the relationship, now works at the IMF.

Mr Dervis - who now heads the Brookings Institution - is among the favourites to succeed Strauss-Kahn as head of the IMF because emerging nations are keen to see a non-European in the role.

He rose to prominence after steering Turkey through its worst financial crisis in 2001 by selling off state assets. Previously he worked at the World Bank for 24 years.

He left the Turkish government in 2005 to become the head of the UN Development fund, which he in turn left for the Brookings Institution think-tank.



But Mr Dervis's past may count against him as more allegations surfaced about the IMF, where women employees are said to warn each other of overly amorous bosses.



Until weeks ago, the IMF's code of conduct contained the unusual provision that 'Intimate personal relationships between supervisors and subordinates do not, in themselves, constitute harassment'.

Critics say that has encouraged senior executives to pursue female subordinates.



There are numerous cases of affairs that have gone uninvestigated.



Affair: Piroska Nagy said she felt pressured into having sex with her boss at the IMF Dominique Strauss-Kahn, pictured below

One woman is said to have slept with her supervisor, who then gave her poor performance reviews to pressure her into continuing with the relationship.

IMF officials apparently declined to investigate after the woman complained, telling her that the man was planning to retire soon so there was no reason to punish him.



Another young woman told the New York Times that she complained after her boss sent her explicit emails.



She told the paper: 'They said they took it seriously, but two minutes later they were turning around and acting like everything was OK to the person who had done it to me. He wasn’t punished. Not at all.'

In 2008 Strauss-Kahn was cleared of any wrongdoing after having a fling with female employee Piroska Nagy. She said she felt pressured into having sex with Strauss-Kahn and said he 'had a problem'.



Standing up for women: Feminist leaders and activists hold a protest in front of the International Monetary Fund headquarters in Washington

One prominent female economist, former IMF deputy director for research Carmen Reinhart, described the attitude at the organisation. She said: 'It's sort of like Pirates of the Caribbean, the rules are more like guidelines.'



A review of the IMF's regulations for senior managers in 2008 found that 'the absence of public ethics scandals seems to be more a consequence of luck than good planning and action'.

The fund brought expert Virginia Carter in to investigate harassment claims last year. She says the culture at the organisation is already changing.



It brought in a new code of conduct at the beginning of the month which says that relationships between bosses and subordinates are likely to lead to a 'conflict of interest;' and should be reported.



Miss Carter told the New York Times: 'It’s recognising that sometimes relationships grow in the workplace. But it doesn’t mean we’re not sensitive to this issue and we will investigate if there is evidence to suggest harassment.'



She also said that ignoring complaints as some employees allege has happened in the past would not happen and that matters would be investigated further.