Robert Harneis - TDO France - Christine Lagarde, France’s first woman Finance Minister and a brilliant international lawyer, is currently on trial before the Court of Justice of the Republic (CJR) for ‘misappropriation of €404 million of public funds by a third party and for negligence’. The accusation relates to the award in 2008 of 404 million euros of compensation to the business man and ex Minister Bernard Tapie, resulting from his dispute with the nationalized bank Crédit Lyonnais. Madame Lagarde agreed to an arbitration that led to the award. The context of the case is the suspicion that Tapie was favored by the Sarkozy government in exchange for support in the 2007 presidential elections.
The French public have already been stunned this month by the former Minister of Finance and chief tax collector, Jérome Cahuzac, receiving a three year prison sentence for tax fraud. Before that the previous French Director General of the prestigious IMF, Dominique Strauss-Kahn had to resign after he was hauled off an aircraft in New York and publicly humiliated on a charge of raping a hotel cleaner. He claimed she consented. The case was settled. He was subsequently put on trial in France for involvement in a prostitution ring for sex parties. He claimed he did not know the young women were paid for their services and was acquitted.
No one can claim that France’s financial political heavyweights lead uninteresting and sheltered lives.
The legal dispute between Tapie and Crédit Lyonnais and the related litigation goes back twenty three years. His compensation has been annulled by the courts and those involved in the arbitration are under investigation.
The case against Lagarde is not however straightforward on legal grounds. The Procurer General of the court decided that there was no case to answer but the case against her went ahead anyway. The make up of the court is largely political and is only for offences by ministers in office. It has only sat in judgment four times since it came into existence in 1993.
So far, the IMF has continued to express its confidence in Madame Lagarde. If she is convicted her position will be embarrassing. The French government will not relish having two of their number forced to resign as Director General one after the other.