IMF Chief Lagarde Charged With Money Laundering
International Monetary Fund chief Christine Lagarde was ordered Thursday to stand trial in France over her role in a 2008 arbitration ruling that handed 400 million euros ($434 million) to a French businessman.
That businessman, tycoon and former politician Bernard Tapie, argued in 2008 that the Crédit Lyonnais bank had defrauded him by intentionally undervaluing his company, sportswear company Adidas, at the time of the sale and that the state – as the bank’s principal shareholder – should compensate him.
Lagarde, who was French finance minister at the time, argued the case should be heard through arbitration and not the regular courts. That arbitration panel ordered the 400 million euros payout to Tapie.
Critics have long argued Lagarde showed preferential treatment to Tapie by ordering the arbitration panel, a payback for his backing of her boss, French president Nicolas Sarkozy, in his 2007 presidential bid.
Others have said Tapie argue that the state should not have paid compensation to a convicted criminal who was bankrupt at the time and would not have been able to pursue the case in court. Tapie spent six months in prison in 1997 for match-fixing during his time as president of popular French football club, Olympique Marseille.
Tapie was placed under formal investigation for committing fraud in late June of 2013. He was ordered to pay back the money starting this month.
Lagarde has always denied any wrongdoing, and after years of investigation, a prosecutor in September argued that the case against her should be dropped.
But the Court of Justice of the Republic on Thursday announced it has decided to send her to trial. It is a special court for trials of government ministers.
Her lawyer, Yves Repiquet, said that he plans to appeal the decision.
The ‘Tapie affair’ has entangled several other high-profile figures, including Sarkozy’s ex-chief of staff Claude Guéant, and Stéphane Richard, Lagarde’s former chief of staff at the finance ministry and now chief executive of Orange.
Lagarde was appointed Managing Director of the IMF in July 2011. Lagarde served as French finance minister from June 2007, and also served as minister for foreign trade for two years. Before entering politics, Lagarde worked as an anti-trust and labour lawyer, serving as a partner with the international law firm of Baker & McKenzie.
Lagarde’s predecessor at the IMF, French socialist politician Dominique Strauss-Kahn, was forced to resign in 2011 following accusations he sexually assaulted a hotel maid in New York.