Better in their words…

Review & Outlook: The Strauss-Kahn Standard – WSJ.com.

The liberal press is again, AWOL…

So now we know what a real scandal atop a leading international organization looks like.

Whatever becomes of the sexual assault charges against Dominique Strauss-Kahn, DNA evidence and all, it is now clear that the former head of the International Monetary Fund treated the organization as his sexual fiefdom. “Despite my long professional life, I was unprepared for the advances of the managing director of the IMF,” wrote Piroska Nagy, an IMF staff economist whom Mr. Strauss-Kahn pursued until she agreed to a brief affair in 2008. “I did not know how to handle this,” she added in a letter to a law firm investigating the affair. “I felt, ‘I was damned if I did and damned if I didn’t.'”

Ms. Nagy’s letter—which added that Mr. Strauss-Kahn was “a man with a problem that may make him ill-equipped to lead an institution where women work under his command”—has received considerable media attention in recent weeks, and rightly so. But perhaps its real interest lies in the way none of Ms. Nagy’s points seem to have found their way into the firm’s October 2008 report to the IMF Executive Board.

On the contrary, the report, conducted by three lawyers at the firm of Morgan, Lewis & Bockius, concluded that “there is no evidence that the MD [managing director], either expressly or implicitly, threatened the female staff member in any way to induce her to engage in the affair or to keep it confidential.” The IMF board gave Mr. Strauss-Kahn merely a wrist slap for a “serious error of judgment,” along with board assurances that the episode would “in no way affect the effectiveness of the Managing Director in the very challenging and difficult period ahead.”

All this was dutifully reported by the press at the time as one of those nothing-to-see-here stories. It also made for a striking contrast to the media’s overdrive when it came to trumpeting the unreal (in every sense) “scandal” that had brought down World Bank President Paul Wolfowitz the previous year. And one has to wonder why.

Remember that Mr. Wolfowitz’s alleged sin was that he had arranged a job transfer, along with a substantial raise, for his companion Shaha Riza, a bank employee at the time Mr. Wolfowitz took the helm in 2005.

But any suggestion that favoritism had been involved quickly fell apart when it came to light that Mr. Wolfowitz had disclosed the relationship with the bank’s board before taking the job; that he had sought to recuse himself from the matter; that the bank’s ethics committee had forbidden him from recusing himself; and that the committee had also directed him to arrange a promotion and pay raise for Ms. Riza “on the basis of her qualifying record” and out of concern for the “potential disruption” to her career for a conflict of interest that was not of her own making.

That was it. Yet outside of these columns, few other news outlets could be bothered to report the facts. Was it because Mr. Wolfowitz, as one of the most prominent advocates for deposing Saddam Hussein, was such a convenient media villain? Or because the board and management of the bank were so resistant to Mr. Wolfowitz’s aggressive anti-corruption agenda, and all too happy to leak selective and bogus information to suggestible journalists?

The answer was both. In the end, the bank board formally acquitted Mr. Wolfowitz of all charges of ethical misconduct, though it got what it most wanted, which was his resignation. Under successor Robert Zoellick the bank is out of the news and back to the business-as-usual of shoveling money out the door. How wonderful: Its annual claims on the American taxpayer now exceed $2 billion.

As for the IMF, his sexual pursuit of underlings forgiven, Mr. Strauss-Kahn was treated in the media as a hero for pushing vast sums on bankrupt economies like Greece. Even now, with the bailouts failing and their mastermind on bail, he is seen as a visionary brought low by his fatal flaw.

Yet what ought to be clear is that the reason Mr. Strauss-Kahn was so popular within the IMF (female company excepted) was that his own behavior was so in tune with the ethos of the institution. Here is a place where power can be exercised without electoral accountability, privileges can be enjoyed without scrutiny, salaries can be claimed without taxes, and other people’s money can be spent with abandon.

He thrived because he enhanced the power of the IMF and did the political bidding of the same European countries that loathed Mr. Wolfowitz’s independent streak. And—if the allegations against him prove to be true—no wonder DSK felt he could behave with impunity in the comfort of his $3,000-a-night New York City suite.

Mr. Strauss-Kahn will soon face his own reckoning, though we won’t hold our breath for any changes in the culture or the mindset of the IMF he once led. As for Mr. Wolfowitz, he long ago proved his innocence. What he has won now—and what his erstwhile detractors should concede—is an additional measure of vindication.