IMF chief to get court grilling in French corruption probe

May 22, 2013 7:38 am
IMF boss Christine Lagarde/FILE
IMF boss Christine Lagarde/FILE

, PARIS, May 22 – International Monetary Fund chief Christine Lagarde will be grilled Thursday by prosecutors investigating a huge state payout to a disgraced tycoon during her time as French finance minister.

Lagarde will appear before the Court of Justice of the Republic (CJR), which probes cases of ministerial misconduct, to explain her 2007 handling of a row that resulted in 400 million euros ($515m) being paid to Bernard Tapie.

Tapie is a former politician and controversial business figure who went to prison for match-fixing during his time as president of France’s biggest football club, Olympique Marseille.

Prosecutors working for the CJR suspect he received favourable treatment in return for supporting Nicolas Sarkozy in the 2007 and 2012 presidential elections.

They have suggested Lagarde — who at the time was finance minister — was partly responsible for “numerous anomalies and irregularities” which could lead to charges for complicity in fraud and misappropriation of public funds.

The investigation centres on her 2007 decision to ask a panel of judges to arbitrate in a dispute between Tapie and Credit Lyonnais, the collapsed, partly state-owned bank, over his 1993 sale of sports group Adidas.

Tapie had accused Credit Lyonnais of defrauding him by consciously undervaluing Adidas at the time of the sale and argued that the state, as the former principal shareholder in the bank, should compensate him.

His arguments were upheld by the arbitration panel but critics claimed the state should not have taken the risk of being forced to pay compensation to a convicted criminal who, as he was bankrupt at the time, would not have been able to pursue the case through the courts.

The payment Tapie received enabled him to clear his huge debts and tax liabilities and, according to media reports, left him with 20-40 million euros which he has used to relaunch his business career.

“Lagarde will for the first time have the opportunity to provide (the CJR) with explanations and clarifications that exempt her from any criminal responsibility,” Yves Repiquet, Lagarde’s lawyer, said of the court appearance.

The IMF has stood by Lagarde, who replaced her compatriot Dominique Strauss-Kahn as head of the organisation in 2011 after he resigned over an alleged sexual assault on a New York hotel maid.

“There’s nothing new under the sun,” she said last month in Washington. “Ever since 2011 I had known very well that I will be heard by the investigative commission of the Cour de Justice.”

She has said the arbitration was necessary to put an end to a long-winded and costly dispute, and has always denied having acted under direct orders from Sarkozy.

A charismatic populist, Tapie was a minister under Socialist president Francois Mitterrand but he backed right-winger Sarkozy in the 2007 and 2012 elections.

He recently purchased a newspaper group in the south of France and there has been speculation about him re-entering politics as a candidate for mayor of Marseille in 2014.

Lagarde, meanwhile, has had a glittering career in law and politics.

She is the first woman to head the IMF and was also France’s first female finance minister from 2007 to 2011 after rising to the executive board of US legal giant Baker & McKenzie.


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