* Lagarde takes office as new IMF managing director
* Contract holds her to higher ethical standards
* She will undergo staff ethics training
By Lesley Wroughton
WASHINGTON, July 5 Christine Lagarde, who took
office as IMF managing director on Tuesday, has signed up for
tougher ethical rules than her predecessor as the lender seeks
to innoculate itself from further hits to its reputation in the
aftermath of Dominique Strauss-Kahn's resignation under fire.
Her terms of employment were made public as she arrived at
the International Monetary Fund's Washington headquarters where
she was scheduled to meet department heads, staff and the
She was greeted by IMF First Deputy Managing Director John
Lipsky, head of the IMF's board of member countries, Shakour
Shaalan, and dozens of news cameras.
"The contract makes more explicit the higher standards of
ethics behavior," IMF spokesman William Murray told Reuters.
The language in the contract draws from new staff conduct
rules published by the IMF in May.
Those rules were issued in response to a 2008 affair
then-IMF chief Strauss-Kahn had with a female staff economist.
Strauss-Kahn was cleared by the board of harassment and abuse
of power, although he apologized for an "error of judgment."
Strauss-Kahn resigned on May 18 to fight charges he
sexually assaulted a hotel maid. Sources familiar with the case
say prosecutors now have doubts about the maid's credibility as
a witness, raising the prospect the case could be dropped.
Lagarde's contract holds her to "highest standards of
ethical conduct consistent with the values of integrity,
impartiality and discretion."
It also requires her to avoid "even the appearance of
impropriety." Further, it states that "in the performance of
your duties as managing director, you have an exclusive duty of
loyalty to the fund and shall avoid any conflict of interest or
the appearance of such a conflict."
Also new is a requirement that she participate in an ethics
training program mandatory for all IMF staff.
The contract also forbids her from attending political
party meetings in a personal capacity or engaging in partisan
political activity, a nod by the IMF board to its unhappiness
over reports that Strauss-Kahn had attended meetings of
France's Socialist Party while he was managing director.
However, she may be a member of a political party and
contribute funds to a political candidate.
Strauss-Kahn's contract on ethics stated only that he
"shall observe the standards of conduct applicable to staff
members ... and should avoid any conflict of interest, or the
appearance of such conflict."
Lagarde will earn $467,940 a year, net of income taxes,
plus an allowance of $84,000, according to her contract
published on Tuesday. The fund will also cover her expenses and
give her a staff retirement and pension plan.
Strauss-Kahn earned $421,000 annually, with an allowance of
$75,350 a year, when he became head of the fund in late 2007.
(Editing by Eric Walsh)
For the contract in full: