IMF Chief Under Investigation in France

Moneybox
A blog about business and economics.
Aug. 27 2014 12:36 PM

IMF Chief Investigated in France

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International Monetary Fund Managing Director Christine Lagarde in D.C. last year.

Photo by Chip Somodevilla/Getty Images

In a statement on Wednesday, Christine Lagarde, head of the International Monetary Fund, revealed through her lawyer that France’s High Court of Justice of the Republic—responsible for investigating French high government officials—is investigating her for “simple negligence.” In France, formal investigation is a prosecutorial suggestion that there is enough evidence to bring someone to trial.

The charges are not for her work as head of the IMF, but as finance minister for then-President Nicolas Sarkozy. Prosecutors are investigating Lagarde’s role in a 2007 arbitration between the former president and Bernard Tapie, “a onetime cabinet minister and the former owner of the Adidas sportswear empire.” Tapie was awarded more than 400 million euros in a dispute with state-owned Crédit Lyonnais; then, despite his socialist loyalties, backed Sarkozy’s center-right political party, leading some to question the authenticity of the arbitration.

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Lagarde stated that the fact that she is being investigated for “simple negligence” means that the committee does not believe that she had been “guilty of any infraction,” but rather suspects she was “insufficiently vigilant during the arbitration.” Lagarde, whose current contract with requires her to “strive to avoid even the appearance of impropriety,” took over at the IMF in 2011 from Dominique Strauss-Kahn, who stepped down amid accusations of sexual assault. At the time, she was lauded for her “hard-working professionalism”—and, indeed, having made her statement, she will return to work in Washington this Wednesday afternoon.

Emily Tamkin is an M.Phil. candidate in Russian and East European studies at Oxford. Follow her on Twitter.  

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