On May 14, 2011, Dominique Strauss-Kahn, the Managing Director of the International Monetary Fund (IMF), was arrested at John F. Kennedy Airport and charged with the attempted rape, criminal sexual assault, and unlawful imprisonment of a maid at the New York City Sofitel hotel. Indicted by a grand jury on several counts, he was granted bail, but will be confined to a New York apartment under 24-hour armed guard until his trial. Mr. Strauss-Kahn was in New York on personal business, en route to Brussels to participate in a meeting of the Eurozone finance ministers when he was apprehended by police. On May 18, 2011, he resigned as IMF Managing Director. The number two official at the IMF, First Deputy Managing Director John Lipsky, is serving as Acting Managing Director until a new Managing Director is elected. IMF and State Department reviews suggest that Mr. Strauss-Kahn is not entitled to either status-based or conduct-based immunity. Under the IMF Charter, IMF employees are granted a limited form of diplomatic immunity for actions related to activities performed in the course of their IMF work. However, "[t]he [managing director's] immunities are limited and are not applicable to this case," according to IMF officials, since, according to such officials, he was in New York on personal business. While Mr. Strauss-Kahn is arguably entitled to immunity by virtue of his status as the executive head of an international organization under the United Nations Convention on the Privileges and Immunities of the Specialized Agencies, the United States is not party to that Treaty. Accordingly, in the view of the State Department, Mr. Strauss-Kahn is unlikely to qualify for immunity under U.S. law. The relevant U.S. law entitles international organizations to claim immunity for their officers and employees only for "acts performed by them in their official capacity and falling within their functions as such representatives, officers, or employees." "Our understanding is that immunity in this particular case, and, with IMF officials ... would only involve their official capacity and carrying out their duties in an official role," said State Department spokesman Marc Toner. Mr. Strauss-Kahn's arrest comes at an challenging time for the IMF, which he had led since 2007. Under his leadership, the IMF reasserted its role as the premier international organization for international economic corporation. In the wake of the financial crisis, Mr. Strauss-Kahn persuaded countries to substantially increase their funding to the IMF enabling the Fund to sharply increase its financial support to troubled economies and its capacity to monitor global economic risks. He also brokered agreement between developing and advanced economies on wide range of issues including reform of IMF quotas that will increase the voting share of emerging economies; revamping the IMF's lending tool-kit to introduce greater flexibility and create new facilities for low-income countries; and placed the IMF at the center of G-20 efforts to increase multilateral surveillance by looking at the external implications of the domestic economic policies of several systemically important countries. The IMF is heavily involved in the current economic crisis in Europe. At the meeting that Mr. Strauss-Kahn was on his way to attending, European finance ministers approved a $111 billion IMF/EU assistance package for Portugal and considered additional economic support for Greece, which continues to struggle a year after receiving its own $145 billion support package. The IMF was represented at the meetings by Ms. Nemat Shafik, the IMF Deputy Managing Director overseeing the Fund's work in various European countries. The arrest and resignation will likely have little impact on the Fund's current lending and monitoring activities, but the arrest has put the selection of Fund leadership back into the spotlight. Controversy focuses on whether a transatlantic "gentlemen's agreement" reserving the IMF leadership for a European and the World Bank leadership for a U.S. citizen is justified in the current global economy. Proposals for a more open, transparent, and merit-based leadership selection process have been made consistently in the past, and at times have been incorporated in communiqués of various leaders summits, but have yet to change the outcome at either of the institutions. This report provides information on the IMF management selection process and discusses some of the related debate. The United States is the largest shareholder of the IMF and congressional interest in the Fund's activities has increased in recent years. Most recently, congressional attention focused on increased IMF lending since the onset of the global economic crisis in 2008 and amidst growing concern about the sustainability of fiscal deficits in several Eurozone economies. Following Mr. Strauss-Kahn's arrest, Senator John Kerry, chairman of the Senate Foreign Relations Committee, which has legislative oversight of the IMF, said that the circumstances surrounding the alleged assault of a hotel maid were "very troubling if not damning." A few Members called for his resignation and expressed interest in holding hearings on the IMF and its recent activities. There is no formal congressional involvement in the selection of Fund management. U.S. participation in the IMF is authorized by the Bretton Woods Agreement Act of 1945. The Act delegates to the President ultimate authority under U.S. law to direct U.S. policy and instruct the U.S. representatives at the IMF. The President, in turn, has generally delegated authority to the Secretary of the Treasury. With the advice and consent of the Senate, the President names individuals to represent the United States on the Executive Board of the IMF. The Executive Board has authority over operations and policy and must approve any loan or policy decision. The U.S. Executive Director is supported primarily by Treasury Department staff. Unique among the founding members, the Bretton Woods Agreement Act requires specific congressional authorization for certain decisions, such as changing the U.S. quota in the Fund or to amend the Articles of Agreement. However, neither the approval of individual loans nor the selection of the Managing Director requires congressional approval. Selecting the leadership at the two major international financial institutions (IFIs) – the IMF and the World Bank – is guided by a 60-year old tradition that the World Bank president is an American and that the IMF Managing Director is a European. The informal agreement, not written into the IMF Articles of Agreement (the official charter of the organization), reflects the political and economic balance of power at the end of World War II. At the time, the United States believed that the World Bank should be headed by an American since the United States was the only capital surplus nation, and World Bank lending would be dependent on American financial markets. The U.S. Secretary of the Treasury at the time, Fred Vinson, believed that if an American representative headed the World Bank, the IMF must be headed by a non-American. A Deputy Managing Director position in the IMF was established in 1949, and an American citizen, nominated by the U.S. Department of the Treasury, has always filled the position. In 1994, the IMF Board of Executive Directors increased the number of deputy directors from one to three in order to increase the regional diversity of the top management team. The additional positions are currently filled by Naoyuki Shinohara , a former senior official in the Japanese Finance Ministry and Nemat Shafik, a national of Egypt, the United Kingdom, and the United States, who has held various positions at the World Bank and the U.K. Department for International Development. The IMF Articles provide for a three-tiered governance structure with a Board of Governors, an Executive Board, and a Managing Director ( Figure 1 ). The Board of Governors is the highest policy making authority of the IMF. All countries are represented on the Board of Governors, usually at the Finance Minister or Central Bank governor level. IMF governors usually meet annually at the fall annual IMF meetings. Day-to-day authority over operational policy, lending, and other matters is vested in the Board of Executive Directors, a 24 member body that meets three or more times a week to oversee and supervise the activities of the IMF. The five largest shareholders are entitled to appoint their own Executive Director. The remaining members are elected (for two-year terms) by groups of countries, generally on the basis of geographical or historical affinity. A few countries, Saudi Arabia, China and Russia, have enough votes to elect their own Executive Directors. In reforms approved by the Governors in December 2010, the IMF Articles of Agreement will eventually be amended so that the Executive Board will consist solely of elected Executive Directors, doing away with the practice of some member countries appointing their representatives. The IMF Executive Board selects the Managing Director of the IMF, who serves as its chairman and chief executive officer. The Managing Director manages the ongoing operations of the Fund (under the policy direction of the Executive Board), supervises about 2,500 staff members, and oversees the preparation of policy papers, loan proposals, and other documents which go before the Executive Board for its approval. Most of the material before the Executive Board is prepared by IMF management or staff. However, some documents and recommendations are prepared by executive directors themselves or by the governments they represent. An Independent Evaluation Office (IEO), which reports directly to the Board of Directors, conducts objective and independent evaluations of Fund operations and policies. Recent reports include studies of the Fund's performance prior to the onset of financial crisis in 2008, IMF involvement in trade issues, and an analysis of the IMF's advice on exchange rate policy. The Managing Director is elected for a five-year renewable term of office. The Executive Board also approves the selection of the Managing Director's principal assistants, the First Deputy Managing Director and the two other Deputy Managing Directors. The formal guidelines for choosing the IMF Managing Director are laid out in the IMF's Articles of Agreements and By-laws. Article XII, Section 4, states that "[t]he Executive Board shall select a Managing Director who shall not be a Governor or an Executive Director. "