IMF CHIEF LAGARDE – CRIME BUT NO PUNISHMENT




Robert Harneis – TDO – In a curious decision, the French Court of Justice of the Republic (CJR) has found Christine Lagarde, Director-General of the International Monetary Fund, guilty but imposed no punishment. Nor will the conviction be entered on her record. The IMF has said that they ‘stand behind her’.

The crime of which she was accused was ‘negligence’ in allowing a case between the nationalized bank Credit Lyonnais and the businessman and former minister Bernard Tapie to go to arbitration rather than continue on its way through the public courts. This arbitration subsequently awarded Tapie 400 million euros in damages and compensation. The court held that she was not negligent in allowing the case to go to arbitration but held that she too easily agreed that there should be no appeal against this generous award and did not take sufficient account of contrary advice.

The judicial official representing the government and advising the court, the Procureur-Général, Jean Marin, had called for the former Finance Minister to be found not guilty.

Having found her guilty the court went on to say that having regard to her ‘character’, her ‘international reputation’ and the fact that she was at the time wrestling with an international crisis, were factors that should be taken into account in her favor and justified imposing no penalty.

The mixed message given by the court may reflect its political nature. The judges who are mostly members of the French parliament and not lawyers may have wished to do enough to support the case against Bernard Tapie, the man who benefited from Lagarde’s ‘negligence’, but not enough to give grounds for Lagarde to be dismissed from her post at the IMF and discredit France.

In her final statement to the court Lagarde said that she stood by her decisions and that all she had done was to act in the public interest.

The proceedings were hampered by the absence of the key witness Stéphane Richard, formerly head of Lagarde’s private office when she was minister, who took advantage of his right not to give evidence because he is involved in criminal proceedings regarding the arbitration proceedings themselves. The arbitration was annulled in 2015 and Tapie has been ordered to return the money.

There have been widespread calls for the reform or even abolition of the CJR from whose decisions there is no appeal. In its 23-year existence, it has only sat four times and never given the accused a prison sentence.