Drama in Finance
Christine Lagarde to Appear in Court: Report
It’s been a busy week for IMF head Christine Lagarde. On the eve of the twice-yearly, high-level IMF and World Bank meetings, The New York Times and Reuters report that Lagarde is set to appear before a French magistrate on May 23 in connection with an arbitration payment made to a billionaire supporter of former president Nicholas Sarkozy. (The original source for the news, the website Mediapart, cites unnamed sources as the origin of the claim.)
The backstory: During Lagarde’s tenure as France’s finance minister, she ended a court battle between the state and Bernard Tapie, a wealthy businessman and political backer of Sarkozy. At question was his sale of a stake in Adidas to the state-owned bank Credit Lyonnais in 1993. The bank later resold the stake for more money, and Tapie cried defraudation. (Credit Lyonnais has denied wrongdoing.) Lagarde has previously said that she did nothing wrong by accepting arbitration to settle the dispute. But magistrates responsible for vetting allegations of ministerial abuse seem to suspect that Lagarde was complicit in misusing public funds—in the end, the state paid $371 million of taxpayer money to Tapie—when she pushed ahead with the arbitration. An IMF spokesman declined to comment on the case, but noted that the IMF’s executive board “continues to express its confidence in the managing director’s ability to effectively carry out her duties.”
The investigation was first opened in 2011 and Lagarde has never been summoned for questioning, though her apartment was searched by authorities last month.