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IMF boss Lagarde questioned in corruption probe

Published:Thursday | August 28, 2014 | 12:00 AM
Lagarde

PARIS (AP):

Christine Lagarde, the chief of the International Monetary Fund (IMF), was put under official investigation for negligence in a French corruption probe that dates back to her days as France's finance minister.

After a fourth round of questioning before magistrates yesterday, Lagarde said she was returning to her work in Washington, and called the investigation "without basis." She is the third IMF managing director in a decade to face legal troubles.

Lagarde and her former chief of staff have faced questions about their role in an arbitration ruling that handed €400 million ($531 million) to a French businessman with a checkered past.

"After three years of proceedings, dozens of hours of questioning, the court (has) found from the evidence that I committed no offence, and the only allegation is that I was not sufficiently vigilant," she said in a statement.

Under French law, the official investigation is equivalent to preliminary charges, meaning there is reason to suspect an infraction. Investigating judges can later drop a case or issue formal charges and send it to trial.

'Paltry' claim

Defence lawyer Yves Repiquet said the negligence claim was "paltry," "extremely minor," and "unfounded," and said investigators could not make a valid case for tougher penalties. He said he would file a motion to have the preliminary charge dismissed.

"There was no reason for her to resign," Repiquet said by phone. Lagarde will not be required to answer questions for the case for months at the least", he said, insisting it will have no impact on her ability to do her job.

The charge could bring up to a year in prison and a fine of €15,000.

"We're nowhere near that just yet," said lawyer Christopher Mesnooh of Field Fisher Waterhouse. "This will probably not go to any kind of a trial or a next stage until next year at the earliest."

"It's a very complicated matter, with enormous political and legal ramifications."

The €400-million payment was awarded to Bernard Tapie, a flamboyant and high-profile businessman, in a dispute over the sale of his majority stake in sportswear company Adidas nearly a generation ago.