On Monday, ex-International Monetary Fund (IMF) chief Dominique Strauss-Kahn was charged with “complicity in aggravated pimping in an organized gang” and “hiding abuse of social funds” in the so-called Carlton affair in Lille, France.

He had been put in custody for two days for preliminary questions over his role in the case last month. The affair first broke last October, shortly after a judge in New York threw out fabricated rape charges against Strauss-Kahn brought in May 2011 by Sofitel chambermaid Nafissatou Diallo.

The allegation against Strauss-Kahn includes his connection with a “prostitution ring” and having had relations with prostitutes paid for by his business associates, using misappropriated company funds. According to judges who questioned Strauss-Kahn, “Prostitutes questioned in the case said they had sex with Strauss-Kahn during 2010 and 2011 at a luxury hotel in Paris, a restaurant in the French capital and also in Washington, D.C., where he lived while working for the Washington-based IMF.”

Strauss-Kahn denied the charges against him, saying he was unaware women he met at parties at the Carlton hotel in Lille, as well as in Paris and Washington, were prostitutes.

One of Strauss-Kahn’s lawyers, Henri Leclerc, told the press: “This dossier is hollow, empty, overblown.” He added, “If a man who sleeps with several prostitutes is a pimp, a whole bundle of people will need to be charged.”

Richard Malka, another lawyer for Strauss-Kahn, said: “He states with the strongest firmness that he is guilty of none of these acts and in particular to not have had the least awareness that certain women he met could have been prostitutes.” He added, “Having relations with an escort does not constitute a crime and is a matter of private behaviour, perfectly legal among adults.”

Strauss-Kahn was freed on bail of €100,000 after questioning. He is barred from contacting witnesses and others involved in the case and faces a gag order preventing him from speaking to the press. He faces up to 20 years in prison and a €3million fine, if convicted. Eight other people have been implicated in the prostitution case, including two businessmen and a senior police officer.

The charges against Strauss-Kahn cannot be understood outside of next month’s French presidential elections. Unpopular incumbent President Nicolas Sarkozy is trying to come from behind by exploiting his close connections with police and intelligence services to manipulate public opinion in the last weeks before the election. This is quite clear, particularly in the Sarkozy administration’s treatment of the recent wave of shootings in Toulouse.

After the killing of seven people, allegedly carried out by Mohammed Merah, the Sarkozy administration orchestrated a media campaign around law-and-order and police themes to shift the election campaign sharply to the right. Hollande, who has fallen in line with this, faces a collapse in his voter support. Reports of Merah’s close ties to French intelligence raise serious questions, however, about the state’s role in the affair. (See: Reports indicate Toulouse gunman was French intelligence asset)

The unusually serious charges brought against Strauss-Kahn—for actions which are hardly unusual among the financial aristocracy—play into the dirty-tricks campaign of Sarkozy’s re-election bid.

Before Diallo brought rape charges against him, Strauss-Kahn was the leading contender for the bourgeois “left” Socialist Party’s (PS) presidential nomination. Instead, the PS selected François Hollande, a weaker and less influential candidate, to run against Sarkozy.

Soon after the rape charges against Strauss-Kahn were dropped, evidence emerged revealing that Sarkozy administration officials were linked to Strauss-Kahn’s indictment in New York. This was revealed in a lengthy article by investigative journalist Edward Jay Epstein published in the New York Review of Books in November.

Epstein notes that when John Sheehan, security director at Sofitel hotel, was alerted to the reported rape, he called a 646 area code number at Accor, the French corporation that owns Sofitel. Sheehan’s boss at Accor, René-Georges Querry, is a former top French police official who, Epstein writes, “worked closely with Ange Mancini, who is now coordinator for intelligence for President Sarkozy.” (See: Article sheds light on the fabrication of charges against Strauss-Kahn)

An official of Sarkozy’s Union for a Popular Movement (UMP) told the press: “If DSK had not gotten himself caught up with Nafissatou Diallo, he would certainly have been selected during the [PS’s presidential] primaries.” The official tried to use this fact to downplay the impact of the Carlton affair, saying: “Then the Carlton affair would have blown up during the election campaign, and then it would have changed everything.” However, his initial comment underscores the political calculations underlying the lawsuits against Strauss-Kahn.

After Strauss-Kahn’s indictment, Le Parisien wrote, “The head of state [i.e., Sarkozy] was jubilant: ‘How many stages are there in this path to crucifixion?’ he asked hungrily.”

PS officials’ response to the charges against Strauss-Kahn has been a cowardly capitulation: they are neither defending their former minister nor trying to expose the political motivations driving the charges against him. Hollande said that the Carlton affair was “a private matter that is painful, but on which I have no political judgment to formulate.”

Asked whether the case would damage the PS’s campaign, Hollande campaign director Pierre Moscovici replied with an absurd comment: “Everyone can see it has nothing to do with the Socialist Party.”

In fact, Sarkozy’s ability to shift the political climate with sex scandals and law-and-order rhetoric is a devastating comment on the PS. It is unable and unwilling to rally popular opposition to Sarkozy because it is campaigning essentially on the basis of the same platform: budget cuts, anti-immigrant rhetoric, and support for NATO-and US-led wars. This allows Sarkozy to cynically advance his campaign by trying to whip up hysteria over the individual morality of various bourgeois politicians.