Did the IMF make the right call when it re-appointed Christine Lagarde to a second five-year term as managing director in February? It’s a question that’s raising eyebrows, now that a French court has ruled Lagarde must face trial for alleged negligence over a €405 million government payout to French tycoon Bernard Tapie.
Lagarde, whose lawyer said allegations in the long-running dispute are “without merit,” failed last Friday in her attempt to have the case dismissed. At issue is the payment made to Tapie, a backer of former President Nicolas Sarkozy, to settle a dispute with Credit Lyonnais in 2008. Lagarde was France’s finance minister at the time.
While the IMF said in a statement its board has “confidence” in Lagarde’s ability to “effectively carry out her duties,” others aren’t so sure. As Stephane Bonifassi, a criminal lawyer in Paris, told Bloomberg: “Being accused of negligence in handling public funds when at the head of an organization that regularly lectures states” is “a bit contradictory.”
It would seem the case, which does not have a trial date yet, threatens to draw a dark cloud over Lagarde’s second term at the helm of the IMF, which, after all, is an organization that prides itself on having a strong moral authority.
Laura Cohn
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