{UAH} Christine Lagarde Put Under Investigation by French Court

Christine Lagarde Put Under Investigation by French Court

Investigation for 'Negligence' Relates to IMF Chief's Time as French Finance Minister

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By 

WILLIAM HOROBIN 

CONNECT

Updated Aug. 27, 2014 11:52 a.m. ET

IMF chief Christine Lagarde speaks to her lawyer, Yves Repiquet, on Wednesday in Paris, after announcing she had been charged with negligence in connection with a multimillion-euro corruption case related to her time as French finance minister in 2008. Agence France-Presse/Getty Images

PARIS—A French court has put Christine Lagarde, head of the International Monetary Fund, under formal investigation for negligence in a corruption probe dating to her days as France's finance minister.

Ms. Lagarde confirmed the decision in a statement Wednesday but said it was "without merit," adding she had instructed her lawyer to appeal.

The preliminary charge of negligence, which carries maximum penalties of €15,000 and one year in prison, could embarrass Ms. Lagarde at a time when she is marshalling world leaders to repair their economies.

Her lawyer, Christopher Baker, said the probe wouldn't deter her.

"She has no intention of resigning," he said.

Ms. Lagarde, who has repeatedly denied any wrongdoing, said she was heading back to Washington Wednesday. An IMF spokesman said the fund was aware she would brief the board upon her return, and declined to comment further.

The decision by the Cour de Justice de la République, a jurisdiction set up to examine alleged wrongdoings by government ministers while in office, came as a surprise because magistrates had decided in May 2013—after a near 10-month preliminary probe—not to regard Ms. Lagarde as a suspect.

IMF chief Christine Lagarde on the sideline of a news conference at her lawyer's office in Paris on Wednesday. Agence France-Presse/Getty Images

The court is looking into the role Ms. Lagarde played in the resolution of a two-decade-old melodrama known in France as "L'Affaire Tapie." The affair has pitted Bernard Tapie, a French entrepreneur and former politician, against the French state.

The court is focusing on Ms. Lagarde's decision, soon after she became finance minister in 2007, to refer the dispute to an arbitration panel. In 2008, the panel made a binding decision, awarding Mr. Tapie more than €400 million ($527 million) in compensation.

The court initially looked into whether Ms. Lagarde had abused her authority in referring the dispute to arbitration, rather than allowing it to continue in the courts. In May of last year, however, magistrates said Ms. Lagarde was only a material witness in the probe. That status was upheld again in March this year.

It isn't clear what new element has led the court to change Ms. Lagarde's status to suspect from witness.

"After three years of procedure, the sole surviving allegation is that through inadvertency or inattention I may have failed to intervene to block the arbitration that brought to an end the long-standing Tapie litigation," Ms. Lagarde said in her statement Wednesday.

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Gwokto La'Kitgum

"Even a small dog can piss on a tall Building", Jim Hightower

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