Next Candidate for Bank of Israel Governor Was Embroiled in Strauss-Kahn Scandal

Mario Blejer's then wife had affair with then International Monetary Fund chief Dominique Strauss-Kahn before the leading economist's fall from grace.

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Mario Blejer, Prime Minister Benjamin Netanyahu's new candidate to become Bank of Israel governor, found himself in a media storm in 2008 after it emerged his wife had had an affair with Dominique Strauss-Kahn, then head of the International Monetary Fund.

Blejer was a senior IMF official at the time, and his second wife Piroska Nagy was a subordinate of Strauss-Kahn at the Fund.

The affair received significant media coverage at the time, with allegations Nagy, a Hungarian economist, received a promotion due to her affair with the IMF chief. She was forced to leave the IMF following the affair. She had been separated from Blejer already, but their marriage dissolved only afterward.

After the affair became public, the IMF board hired a law firm to investigate.

Nagy had complained that Strauss-Kahn pursued her aggressively and said, “I was damned if I did, damned if I didn’t.”

The board concluded that Nagy was not promoted inappropriately, and while it deemed Strauss-Kahn’s behavior inappropriate, it concluded he had not abused his power.

Nagy disagreed, alleging Strauss-Kahn had used his power to push her into a relationship.

In her letter to the investigating law firm, she called Strauss-Kahn “a man with a problem that may make him ill-equipped to lead an institution where women work under his command.”

Several years later, Blejer told a journalist that he had met with Strauss-Kahn and discussed the Frenchman’s affair with his wife. Strauss-Kahn apologized and admitted that he had behaved inappropriately, Blejer said.

Strauss-Kahn stepped down as IMF chief in May 2011 after he was accused of attempting to rape a hotel staffer in New York. The affair with Nagy received renewed media attention at the time.

Strauss-Kahn is currently facing charges of pimping in his native France.

Netanyahu's two previous candidates for the post of Bank of Israel governor withdrew after media scrutiny revealed past alleged misconduct. The first choice, Jacob Frenkel, dropped his candidacy over shoplifting allegations. Next up was Leo Leiderman who after only several days declined the position amidst claims of sexual harassment.

Piroska NagyCredit: Bloomberg
Mario BlejerCredit: Bloomberg