When we left this story 48 hours ago, Strauss-Kahn (a.k.a. DSK) was an internationally disgraced former master of the econoverse. Accused of a whole slew of charges in connection with forced sex with an African immigrant hotel maid in New York City, he was dragged off an international air flight, arrested, handcuffed, arraigned and indicted. He was finally released on bail conditions that included surrender of his passport, wearing an ankle bracelet that monitored his whereabouts 24/7, and being forced to stay in New York City (admittedly in a luxury town house) – oh and posting a $6 million bail and bond payment, just in case he tried to go Awol anyway.

On Friday, however, in a stunning reversal of fortune, after serious credibility issues with his accuser and criminal allegations against her arose, the restrictions on his movement were significantly altered. In a brief hearing at the State Supreme Court in Manhattan, the prosecutors did not oppose his release and Judge Michael J Obus freed Strauss-Kahn on his own recognisance – although the state has kept his passport.

When he was first charged, assistant district attorney John “Artie” McConnell told the judge, “The proof against him is substantial. It is continuing to grow every day as the investigation continues. We have a man who, by his own conduct in this case, has shown a propensity for impulsive criminal conduct.” According to all reports and sources, the hotel maid was in Strauss-Kahn’s room for only a short time before the alleged attack, his body fluids were on her uniform and she had quickly reported the alleged assault and told a consistent story to the investigators and prosecutors.

And all that had happened before he was basically run out of town via a forced resignation of his position as head of the International Monetary Fund and then likely winning the Socialist Party nomination for the French presidency next time. Strauss-Kahn had led the IMF through the 2008-2009 global financial crisis, had become a strong contender for the nomination for French president as a Socialist Party candidate and has always maintained his innocence. And the French nation was convulsed in a debate about the American judicial system’s iniquities and embarrassments as well as on whether French society is entirely too forgiving about sexual dalliances and seduction.

Uh-oh. That was then. Today is a rather different story, it seems. It has emerged that prosecutors now have some very serious questions about the credibility of the hotel housekeeper who accused DSK of sexual assault. As a result, the prosecutors are apparently taking the extraordinary step of seeking court support to reduce DSK’s heavy-duty bail. According to sources, investigators in the case now believe the woman has lied repeatedly about her activities at the time of the alleged attack – as well as about her own background.

Senior prosecutors met with DSK’s lawyers and gave them details of their findings. Among these are possible links to people involved in criminal activities, including drug dealing and money laundering. The New York Times reported:

“According to the two officials, the woman had a phone conversation with an incarcerated man within a day of her encounter with Strauss-Kahn in which she discussed the possible benefits of pursuing the charges against him. The conversation was recorded.

“That man, the investigators learned, had been arrested on charges of possessing 400 pounds of marijuana. He is among a number of individuals who made multiple cash deposits, totalling around $100,000, into the woman’s bank account over the last two years. The deposits were made in Arizona, Georgia, New York and Pennsylvania.

“The investigators also learned that she was paying hundreds of dollars every month in phone charges to five companies. The woman had insisted she had only one phone and said she knew nothing about the deposits except that they were made by a man she described as her fiancé and his friends.”

According to sources in the prosecutor’s office, the state now believes the maid also lied about details on her application for asylum in the US, including statements in which she said she had been raped in her native Guinea. While all these issues are not necessarily about the rape accusation itself, the questions surrounding the alleged victim’s background clearly could damage her credibility on the witness stand.

According to officials, in giving her statement, “She actually recounted the entire story to prosecutors and later said it was false”. Prosecutors still have not reached a conclusion about the actual allegations or whether they will decide to downgrade DSK’s charges.

The New York Times has now reported:

“Prosecutors from the office of the Manhattan district attorney, Cyrus R Vance Jr, who initially were emphatic about the strength of the case and the account of the victim, plan to tell the judge on Friday that they ‘have problems with the case’ based on what their investigators have discovered, and will disclose more of their findings to the defense. The woman still maintains that she was attacked, the officials said.

“ ‘It is a mess, a mess on both sides’, one official said.”

No kidding.

On Friday, DSK was released from house arrest as the case against him moved a step closer to dismissal. Prosecutors told the judge they had serious problems with the case. Before the hearing, the Manhattan district attorney’s office refused to comment on the rumours, although one of the lawyers acting for  DSK’s, Benjamin Brafman, did say, “There will be serious issues raised by the district attorney’s office and us concerning the credibility of the complaining witness”.

The hotel maid had told police DSK had chased her into the hallway from his suite at the Sofitel Hotel, tried to remove her clothing and then forced her to perform oral sex before she finally broke free.

As amazing as this new twist is, if the case ultimately collapses, it is going to have an unpredictable impact on the French presidential race. DSK had been the leading Socialist challenger to face President Nicolas Sarkozy in next year’s elections – until his arrest. As a result of the developments in New York, DSK’s French attorney, Leon Lef Forster told the media, “Those who know Dominique Strauss-Kahn will not be surprised by this evolution of events. What he was accused of has no relation to his personality. It was something that was not credible.”

Additionally, these amazing goings-on will now again rev up the rumour mill that there was some sort of wild conspiracy aimed at DSK in an effort to remove the most viable challenger to Sarkozy. In a poll taken just after his arrest, a majority of French responded they believed DSK – a man who actually already had a considerable reputation as a womaniser, “the great seducer” – was the innocent victim of some kind of plot. And, of course, it hasn’t done any good to district attorney Vance’s political and legal career either as he is now only a year-and-a-half in this position.

As things stood until all this happened, DSK’s case was only scheduled to return to court on 18 July so there are almost certainly going to be some real turns and twists in this saga. But regardless of how it all washes out, there must be hordes of Hollywood agents already slathering to get the rights for a made-for-TV movie for this one. It’s going to be a hit if DSK is released and the charges are dropped. It’s going to be an even bigger hit if he is convicted. DM

For more, read:

• Strauss-Kahn Is Released as Case Teeters in The New York Times;
• Accuser issues shake Strauss-Kahn case in AP;
• Strauss-Kahn Case Seen as in Jeopardy in The New York Times;
• Questions about accuser leave Strauss-Kahn sexual assault case in limbo in The Washington Post.

Photo: Former IMF chief Dominique Strauss-Kahn and his wife Anne Sinclair depart a hearing at the New York State Supreme Courthouse in New York July 1, 2011. Former IMF chief Dominique Strauss-Kahn was released without bail on Friday after a dramatic court hearing where the sexual assault case against him appeared to shift in his favor. REUTERS/Lucas Jackson.