The squeaky clean image of IMF Chief Christine Lagarde has taken a hit after she was placed under formal investigation over a scandal that has rumbled on for the past six years. The news came after she was questioned for 15 hours earlier this week by the Cour de Justice de la République.
As World Finance reported in May, the allegations relate to her time as French finance minister, where she worked under Nicolas Sarkozy. In 2008, allegations emerged against controversial businessman Bernard Tapie after he was awarded €408m at an arbitration over a business dispute. It came just a year after he supported Sarkozy’s presidential election campaign.
[Lagarde] claimed that if there had been any wrongdoing on her part, it had been through “inattention”
Lagarde was responsible for the arbitration process that awarded Tapie his payout, although she denies any wrongdoing in the case. He had been involved in a dispute with French bank Crédit Lyonnais over the sale of sports manufacturer Adidas in 1993, arguing that the bank had defrauded him. In 2008, Lagarde stepped in to award Tapie his victory.
Tapie has been steeped in controversy for many years. In the early 1990s he was imprisoned for corruption for match fixing while owner of football team Olympique de Marseille. His support for the right-wing Sarkozy in 1997 was seen as surprising, as he had previously served as a minister in a socialist government. His accusers claim his support came with a price – a favourable decision in the arbitration case in 2008.
Protesting her innocence on Wednesday, Lagarde said she would be appealing against the court’s decision, and claimed that if there had been any wrongdoing on her part, it had been through “inattention”.
“After three years of procedure, the sole surviving allegation is that through inadvertence or inattention I may have failed to intervene to block the arbitration that brought to an end the longstanding Tapie litigation,” she said.