Publications
Partners
Paris - A French court ordered an investigation on Thursday
into the role of International Monetary
Fund (IMF) head Christine Lagarde in a large settlement paid to a
businessman friend of President Nicolas Sarkozy when she was finance minister.
The investigation into Lagarde's
alleged complicity in the misuse of public funds in her approval of a €285m
arbitration payout to Bernard Tapie in 2008 will get under way at once, the court's prosecutor said.
Lagarde - who took up her post as IMF managing director last month - has denied any misconduct and her lawyer
said the probe would be "in no way incompatible" with her functions
at the global lender.
Analysts said the development would be awkward for Lagarde
as she makes her IMF debut and tries to turn the page from her predecessor
Dominique Strauss-Kahn's exit from the post in a sex assault scandal - but
they also said it should not immediately hurt her credibility.
"Today's news is politically unhelpful, but on the other
hand I would be surprised if this triggered a dynamic making this a major issue
and affecting Lagarde's stewardship at this stage," said Thomas Klau of
the European Council on Foreign Affairs.
"There is obviously no direct link between her
responsibilities at the IMF and the issue under review, which goes back to her
early days as finance minister. That said, any appearance of impropriety of any
kind has become potentially more virulent as a result of the Strauss-Kahn
affair," he said.
There has never been any question that Lagarde, who won wide
international respect as finance minister and is herself a former high-flying
lawyer, benefited personally from the affair.
Lagarde faces questions
France's public prosecutor had recommended the Court of
Justice of the Republic - a special tribunal that can judge ministers - order
an investigation, following a request from opposition Socialist Party
politicians.
The court was initially due to rule in June, just at the
time Lagarde was bidding for the IMF job, but asked for more time to weigh its
decision.
"We have come out in favour of an investigation
concerning Madame Lagarde," court official Gerard Palisse said, after the
court met for several hours to examine the results of a preliminary judicial
review.
Yves Repiquet, a lawyer for Lagarde, told France's BFM TV
that Lagarde had received the news calmly and even with relief, following
months of speculation over whether a complaint brought by the Socialists over the
case would end up in a probe.
"This procedure is in no way incompatible with the
current functions of the managing director of the IMF," Repiquet said in a
statement emailed directly after the court's announcement.
He said Lagarde had acted perfectly legally in letting the
Tapie case be settled by arbitration.
Lagarde is tasked with drawing a line under the
Strauss-Kahn scandal, but she now faces being called for questioning by
investigating judges in a process that could run for months or even years.
"An investigation could take a very long time, one
could expect it to take several years as there would be a lot of witnesses to
interview, among them Madame Lagarde, who could also be investigated as a
suspect," Virginie Duval, general secretary of France's USM magistrates
union, told Reuters television.
Lagarde is accused of overruling objections from advisers to
settle the case with Tapie, who said Credit Lyonnais bank had defrauded him in
the 1993 sale of his stake in sports clothing group Adidas.
