In court: Christine Lagarde
23 May 2013
The
head of the International Monetary Fund arrived in the dock of a Paris
courtroom today as she braced herself to be formally charged with
embezzlement and fraud.
Christine
Lagarde’s humiliation is not only a massive personal blow which could
lead to her resignation, but one which will plunge the world’s banking
system into further ignominy.
The
clearly nervous 57-year-old said nothing to reporters as she entered
the Court of Justice of the Republic, a special tribunal set up to judge
the conduct of France’s government ministers, shortly after 8.30am.
Lagarde faces a maximum sentence of 10 years in jail if found guilty of the very serious charges.
It
was when she was President Nicolas Sarkozy’s finance minister that she
is said to have authorised a 270 million pounds payout to one of his
prominent supporters, so abusing her government position.
The money went to Bernard Tapie, a convicted football match fixer and tax dodger who supported Lagarde and Sarkozy’s UMP party.
It
came after Dominque Strauss-Kahn, another senior French politician, was
sacked as IMF chief following allegations that he attempted to rape a
chambermaid in a New York hotel.
Ms Lagarde began campaigning to succeed Mr Strauss-Kahn soon after his arrest for the alleged crime.
But
now it is Ms Lagarde, a lawyer and retired synchronised swimming star,
who is facing a long court process of her own, as well as a possible
jail sentence.
The
scandal will not only pile further shame on France’s political class,
but worry politicians and bankers desperately trying to resolve the
global financial crisis.
Mr
Tapie, the former head of adidas in France, claims he was cheated out
of millions by Credit Lyonnais bank when the sports kit empire was sold
in 1993.
In
2007, Ms Largarde ended the epic dispute by ordering a panel of judges
to arbitrate and, in turn, they awarded Tapie the damages.
Opposition
MPs were furious, with former presidential candidate Francois Bayrou
accusing Ms Lagarde of ‘dipping into the taxpayers’ pocket for a private
beneficiary.’
Mr
Strauss-Kahn’s Socialist Party also accused Ms Lagarde of improper
conduct, pointing to the fact that Mr Tapie was a vocal supporter of
Sarkozy.
Ms
Lagarde’s lawyer, Yves Repiquet, said the inquiry was ‘in no way
incompatible’ with her new job, and expected the case to be dismissed.
Ms
Lagarde denies any wrongdoing, saying before today’s court appearance:
‘If it’s decided to continue with this inquiry it won’t be particularly
surprising. Personally, it doesn’t worry me at all – I didn’t benefit
personally’.
But it has been widely reported in the French media that investigators intend to charge her with fraud and embezzlement.
Le
Monde said that magistrates had already written to Mrs Lagarde to tell
her that she should not expect any special treatment because of her
high-profile international job.