Another scandal for an IMF leader

The UMP had their fun with DSK, now it’s time for the Socialist Party to rip on an IMF leader caught up in a scandal.

France 24 reports that French Finance Minister and head of the IMF Christine Lagarde is in hot water over allegations she awarded millions in undeserved damages to an eccentric business tycoon.

It all comes down to a squabble between French bank Credit Lyonnais and businessman Bernard Tapie, who sued the bank after allegations of shifty practices during a sale of Adidas shares:

“In 2007, Lagarde intervened to bring a swift end to the long-running battle. She offered to take it out of court by appointing a special panel of judges to arbitrate the case. The two-decade-long dispute ended a year later with a €285 million settlement in favour of the flamboyant tycoon.

Furious over the huge reparations awarded to Tapie, members of the opposition Socialist Party argued that the case should not have been settled by private arbitration since public money was at stake. Since then, they have clamoured for an inquiry.”

A three-judge panel for the Court of Justice of the Republic has decided to launch an investigation, which could result in a  €75,000 and a five-year prison sentence.

Lagarde, ever classy, has been quoted as being “indignant” but calm over the accusations. Which is probably because everyone suspects it is secretly French PM Nicolas Sarkozy’s fault.  See, Tapie is a longtime Sarkozy ally, and as the Economics News Paper pointed out, quoting Socialist Party president Jean-Marc Ayrault:

“For socialists, it’s not just Christine Lagarde who is affected by the decision of the RGC, but Nicolas Sarkozy himself. ‘We can not imagine that Lagarde has acted only , says Ayrault. Nicolas Sarkozy is as much in question, not legally but in terms of policy. He will have to explain.'”

Meanwhile, the IMF is standing by their (wo)man, arguing she can still serve as leader while the investigation is underway, according to the Wall Street Journal, which went with the ol’ anonymous source:

“Before the IMF board picked Lagarde, the IMF’s chief counsel discussed with French President Nicolas Sarkozy’s office the potential risks posed by the Tapie case to allay the board’s concerns, according to a person familiar with the matter. After discussing the potential for hearings at which Lagarde may have to testify and the circumstances surrounding the case, the board was ultimately satisfied by the facts, this person said. Regardless, Lagarde told the board she would waive the diplomatic immunity from pressure from the court that the managing director’s position gives the holder, he said.”

Read more about scandals and shake-ups in the latest issue of Carnet Atlantique.

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This entry was posted in Economy, Europe, France, Politics and tagged , , , . Bookmark the permalink.

One Response to Another scandal for an IMF leader

  1. Véronique Bastillette says:

    Je suis un peu en colère.J’ai voté pour François Hollande pour président parce que je croyais au changement qui était annoncé et à la constitution d’un gouvernement irréprochable. Quel désespoir de constater que François Hollande fait le choix en tant que chef du gouvernement Jean Marc Ayrault, qui n’est pas irréprochable. Ayrault a clairement était l’objet d’une condamnation à de la prison pour magouille de favoritisme ! Vraiment décue….

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