Judge weighs Strauss-Kahn bid for bail
NEW YORK/WASHINGTON (Reuters) - A New York judge weighed on Thursday whether to release on bail former IMF chief Dominique Strauss-Kahn, who has been charged with sexually assaulting a maid at a luxury hotel.
Strauss-Kahn, held in custody since police pulled him off an Air France plane on Saturday, looked tired as he entered the courtroom room wearing a blue shirt and gray jacket.
He smiled at his wife, former French television journalist Anne Sinclair, and daughter Camille, and stared ahead resolutely during the proceedings.
The hearing on whether to release Strauss-Kahn came as the jockeying to replace him at the top of the IMF intensified. European and the United States sought a speedy succession to prevent a bid by emerging economies to put a potential rival candidate in place.
Strauss-Kahn, 62, stepped down as IMF chief late on Wednesday, tendering his resignation from prison as pressure mounted from the United States and other countries to hand over leadership of the global lender.
He has vowed to fight charges, which he said he denied "with the greatest possible firmness," according to his letter, which was posted on the IMF website.
His Saturday arrest dashed his prospects of running for the French presidency in 2012 and sparked international debate over the 65-year-old tradition that a European heads the IMF.
U.S. Treasury Secretary Timothy Geithner called for an "open process" to find a successor but sources in Washington said the United States, the largest financial contributor to the IMF, would back a European for the post.
The U.S. push to find a replacement quickly is likely to favor a European replacement because it would be difficult for developing nations to unify around a rival candidate in time to challenge Europe's long hold on the job.
A Reuters poll of economists showed 32 out of 56 think French Finance Minister Christine Lagarde is most likely to succeed him, and diplomats in Europe and Washington said she had backing from France, Germany and Britain -- the three biggest European economies.
They also said there was an expectation that the United States would back Lagarde, not least because it wants to keep the number two IMF job and the leadership of the World Bank, the IMF's sister organization that funds developing countries.
German Chancellor Angela Merkel tried to preempt calls from emerging nations for a shot at the post by saying the next managing director should be appointed quickly and should be a European.
Canada, a member of the Group of Eight leading economies, who meet for a summit in France next week, expects a European to get the post, a government source said. [nOLAJGE7DG]
In veiled warnings against another U.S.-European stitch-up, China and Japan both called for an open, transparent process to choose a successor on merit.
'GREATEST POSSIBLE FIRMNESS'
Strauss-Kahn's resignation letter, released by the IMF and dated May 18, contained his first public comment on the charges of attempted rape, illegal sexual acts and sequestration of a 32-year-old widow from West Africa at a luxury Manhattan hotel.
"I deny with the greatest possible firmness all of the allegations that have been made against me," he wrote. "I want to devote all my strength, all my time, and all my energy to proving my innocence.
A senior source at the IMF said Strauss-Kahn had resigned on his own accord through lawyers before the Fund's board had been able to contact him to ask his intentions.
The woman Strauss-Kahn allegedly tried to rape testified on Wednesday before a grand jury. The 23-member panel will decide in secret whether there is enough evidence to formally press charges with an indictment.
Any trial could be six months or more away. If convicted, he could face 25 years in prison.
His lawyer, Benjamin Brafman, told his arraignment hearing on Monday that the evidence "will not be consistent with a forcible encounter."
A lawyer for the alleged victim, a Guinean mother of a 15-year-old daughter who has gone into hiding to avoid media attention, told Reuters she opposed bail.
"The idea that the man who did this to her is now on the street, so to speak, and able to do what he wants to do in the world is something which is frightening to her," Attorney Jeffrey Shapiro said.
The vacancy at the IMF comes at a sensitive time, given its dominant role in helping euro zone states such as Greece, Ireland and Portugal deal with massive debt problems.
Europeans argue that the euro zone debt crisis means it makes sense for them to retain the post for now.
Lagarde, 55, declined to answer when asked if she was interested in the post, but told reporters: "Any candidacy, whichever it is, must come from Europeans jointly, all together.
Several European diplomats said she had already been quietly canvassing support in expectation that Strauss-Kahn would stand down within weeks to seek the French presidency.
Emerging economy officials acknowledge that one problem would be their own difficulty in agreeing on one candidate, in contrast to the Europeans' disciplined unity.
One possible figure may be former Turkish Economy Minister Kemal Dervis, 62, an economist with IMF experience, who is from an emerging economy that is a candidate for EU membership.
Turkish Finance Minister Mehmet Simsek said the practice of Europe appointing the IMF head must change because "the center of the world is moving from west to east.
U.S. national John Lipsky, the Fund's number two whose term expires in August, is acting managing director until the IMF executive board selects a successor to Strauss-Kahn.
In a poll released in France on Wednesday, 57 percent of respondents thought the Socialist politician was definitely or probably the victim of a plot.
(Additional reporting by Emily Kaiser in Singapore, Tetsushi Kajimoto in Tokyo, Sam Cage and Andreas Rinke in Berlin, Elizabeth Pineau in Paris, David Milliken in London, David Morgan in Washington, Noeleen Walder, Grant McCool and Mark Hosenball in New York, Writing by Paul Taylor and Matt Daily; Editing by Kevin Liffey and Laura MacInnis)
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