Sex case against Strauss-Kahn is close to collapse, say lawyers

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The sex assault case against Dominique Strauss-Kahn appeared to be hanging by a thread last night after a New York judge freed him from house arrest when doubt was cast on the credibility of his alleged victim.

The dramatic shift in the legal drama also scrambled the political landscape in France, where Mr Strauss-Kahn, the former director of the International Monetary Fund, had been considered a likely and potent socialist challenger in next year's presidential election.

Mr Strauss-Kahn, who saw his reputation and his hopes of running for president in France shredded in the wake of his dramatic arrest, smiled in court as Justice Michael Obus agreed to a new bail arrangements allowing him to move freely in the city. Manhattan prosecutors acknowledged it had new information undermining the credibility of the hotel maid whose allegations led to his arrest on 14 May. But the charges were not dropped, and his passport was not returned to him. Benjamin Brafman, the lead defence laywer for Mr Strauss-Kahn, said the days events had been the "first step to what we believe will be full exoneration".

Cyrus Vance Jr, the Manhattan district attorney, noted in a statement to the press that a grand jury had indicted the defendant on "several serious charges". Those charges, which include sexual assault and attempted rape, remain in place, he emphasised. But he admitted that an ongoing investigation by his office had "raised concerns about the complaining witness's credibility".

A lawyer for the maid, an immigrant from Guinea in West Africa, made a vigorous statement in which he said that the sexual encounter that occurred in the Sofitel where Mr Strauss-Kahn had been staying had not been consensual as defence lawyers have implied. "That is a lie," the lawyer, Kenneth Thompson, said. His protestations will have done little to lessen the impression that the case she initiated is now in chaos.

What was not clear was whether Mr Vance's office will now conclude that it can no longer proceed to trial. A possible scenario is that his office and lawyers for the defence will in short order switch track and start negotiations for a plea deal. Mr Strauss-Kahn could be asked to accept guilt on much less serious charges than those on the table now and avoid all prison time.

It appeared that prosecutors had uncovered grave inconsistencies with regard to the 32-year-old maid, her various statements, her allegations and even the circumstances under which she won asylum in the US. She had lied to the grand jury, for example, saying that after the alleged assault in Mr Strauss-Kahn's suite in the Sofitel, just off Times Square, she had waited for him to leave and then directly told hotel managers of what had occurred. The truth is that she went on with her cleaning duties.

"The complainant [accuser] has since admitted that this account was false and that after the incident in Suite 2806, she proceeded to clean a nearby room and then returned to Suite 2806 and began to clean that suite before she reported the incident to her supervisor," prosecutors said in a letter to the defence team. The dramatic turn of events is likely to bolster criticism, notably in France, of a legal system in the United States that purports to treat any accused person innocent until found guilty but which left Mr Strauss-Kahn, 62, formerly one of the most powerful figures in the world financial system, paraded before cameras in handcuffs and vilified by the media.

The judge seemed to acknowledge the need to correct that impression, insisting that the investigative work will continue. "There will be no rush to judgment," Justice Michael Obus said at the hearing. "The people will continue to investigate and re-examine the matter as appropriate."

Potentially making things still worse for prosecutors are reports of possible links between the maid and criminal elements in New York. According to a New York Times report, a recording exists of her talking one day after the alleged assault with a prison inmate facing charges of possessing 400lbs of marijuana. She allegedly muses about what money she might make from the scandal.

As Mr Strauss-Kahn entered the courtroom, he seemed to show a hint of his old swagger and after the ruling was made to release him from house arrest he turned and smiled to his wife, Anne Sinclair, who was behind him. The bail conditions originally set, including the requirement that he be monitored by security guards at all time, was reportedly costing him about $250,000 per month.

The NYT also said the jailed man to whom the maid spoke is among a variety of individuals who over two years have apparently deposited as much as $100,000 into bank accounts held by the maid. The paper said prosecutors had been alarmed to find that she had been paying hundreds of dollars monthly in phone charges to as many five different companies.

The essential questions

Why would it matter if the credibility of the accuser is damaged?

When it comes to ascertaining what really happened in the Sofitel suite, particularly over whether sex between accuser and accused was consensual or not, the case will turn largely on "he-said-she-said" testimony. If the defence can demonstrate a pattern of lying on the part of the maid, jurors will ask why they should believe her on the stand.

If the charges are not dropped, how come he is now essentially free?

In the US, the conditions for bail generally match the seriousness and the credibility of the case presented by prosecutors. Now that the case is looking very much more wobbly the judge is compelled to loosen bail conditions. The judge will also have calculated that if the defendant sees a greater likelihood of being acquitted he is less likely to abscond.