News / Economy

IMF's Lagarde Under Investigation in France

IMF chief Christine Lagarde poses on the sideline of a press conference, Aug. 27, 2014.
IMF chief Christine Lagarde poses on the sideline of a press conference, Aug. 27, 2014.
Lisa Bryant

International Monetary Fund chief Christine Lagarde says she has no intention of stepping down from her job, despite being under investigation in France in a longstanding corruption case. 

In a statement to reporters Wednesday, Lagarde said she would contest the decision by French magistrates to put her under formal investigation.  At issue is a tangled case of political fraud that dates back to her time as France's finance minister, before her move to Washington.

Lagarde said that after three years of questioning, magistrates had concluded she had committed no offense, but had not been sufficiently vigilant.  She said she is asking her lawyer to take all measures against the decision.  She said she is returning to her job at the IMF in Washington.

As French finance minister under former President Nicolas Sarkozy, Lagarde ordered an arbitration panel to look into a complaint of fraud by French tycoon Bernard Tapie, who was a friend of Sarkozy's.  The panel ultimately ordered a massive payout to Tapie.  Critics say the settlement was far too generous and the matter should have been settled in court.

Lagarde has steadily denied wrongdoing.  But she has been questioned four times under the status of "assisted witness."

Being placed under formal investigation suggests prosecutors might have evidence of wrongdoing.  Under this status, the case can later be dropped, or formal charges could be pressed.  

If found guilty, the offense of negligence carries a maximum penalty of a year in jail and a $20,000 fine.

Lagarde was a star in President Sarkozy's government.  She became the IMF's first female head in 2011, replacing fellow Frenchman Dominique Strauss Kahn who resigned amid allegations of sexual assault.  The charges were later dropped, although Strauss-Kahn has faced other sex-related probes.

In July, Sarkozy was also placed under formal investigation on suspicion of influence peddling in a separate probe. 

 

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