IMF Boss Christine Lagarde to Face Trial
For years Christine Lagarde has been dogged by a corruption scandal involving an illegal payout to a sleazy tycoon. Now that she has been ordered to stand trial, will the IMF chief bounce back?
PARIS—She has been praised in the press as the "rock star" of the International Monetary Fund, but on Friday France's highest appeals court ordered IMF boss Christine Lagarde to stand trial on corruption charges in relation to a multi-million dollar state payout to a Donald Trump-esque business mogul.
The scandal dates back almost a decade, to Lagarde's stint as the country's finance minister (a first for a woman in France) under then-President Nicolas Sarkozy. Flamboyant businessman and onetime politician Bernard Tapie, 73, had been caught up in an ongoing legal battle with Credit Lyonnais over the 1993 sale of Adidas, in which he had a hefty stake. Tapie sued, accusing the partly state-owned bank of deliberately undervaluing the sportswear giant and defrauding him of millions of euros.
In 2007 Lagarde intervened, ordering a special panel of judges to arbitrate in the case. The following year, the judges awarded Tapie a staggering €285 million ($312 million in U.S. dollars) in damages, which was paid from public funds. The settlement resulted in allegations that the millions amounted more-or-less to a government thank-you gift to Tapie, a former socialist minister, who switched parties to support Sarkozy during his election bid.
Things heated up in 2013, when anti-corruption cops raided Lagarde's Paris apartment as part of the investigation, and again in December, when a judge initially ordered her to stand trial. Lagarde had appealed the judge's decision, but with today's ruling, she will now most certainly face the Court de Justice de la République, which handles wrongdoings by ministers.
"I am convinced that the court will find the allegations of negligence to be without merit," her lawyer, Patrick Maisonneuve said in a statement, reiterating that she had acted in "good faith" back in 2007 and that her decisions had been within the law.
“This debate will occur before the court of justice and I am convinced it will rule out Ms. Lagarde’s responsibility,” Maisonneuve added.
Despite ongoing speculation of her involvement in the Tapie affair, the charismatic Lagarde has been viewed in France and around the world in a mostly positive light. In the press she is often portrayed as a tough and straight-talking power woman, who is more than capable of standing her own in the ruthless, male-dominated world of finance, and fawning articles have praised her style and wit.
"The first thing you notice about her is her tall stature, and an elegant, almost defiant self-assurance," French journalist Hervé Gattegno wrote in a 2014 Vanity Fair profile. "A mélange of French refinement and American efficiency sums up Christine Lagarde's personality fairly well."
Tapie’s bawdy, controversy-addled persona clashes with Lagarde's polished one, however, adding to the scandal and begging the question as to how and why she went to bat for him.
"I have less than €100 million left!" Tapie famously complained to the French press in 2013 when questions arose about his enormous state-sponsored payout.
Moreover, in addition to his odd stints as a pop singer and TV producer, the onetime owner of Marseille's soccer team spent eight months in prison for match fixing in the 1990s.
Although Lagarde herself could face up to one year in jail and a fine of €15,000, Romain Dupeyre, an international lawyer and arbitration specialist told France 24 that a final ruling on the case was not expected any time soon.
“Whatever decision this very specific court takes may still be challenged before the French supreme court, so it could take years before a final decision on this issue,” he said. A trial date has yet to be set.
Largarde has always stood by her decision to intervene in the Tapie case, insisting that she "acted in the best interest of the French state, and in full compliance with the law."
The IMF, in the meantime, was unwavering in its support for its embattled director.
"The executive board has been briefed on recent developments related to this matter, and continues to express its confidence in the managing director's ability to effectively carry out her duties," spokesperson Gerry Rice said in a statement on the IMF website.
Despite her upcoming legal battle, it seems that Lagarde's image of steely competence has yet to be tarnished.