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Guilty Verdict for I.M.F. Chief Christine Lagarde: A Primer Guilty Verdict for I.M.F. Chief Christine Lagarde: A Primer
(about 1 hour later)
Christine Lagarde, the head of the International Monetary Fund, has been found guilty of criminal charges linked to the misuse of public funds dating to her time as France’s finance minister.Christine Lagarde, the head of the International Monetary Fund, has been found guilty of criminal charges linked to the misuse of public funds dating to her time as France’s finance minister.
She will not serve jail time or have to pay a fine. Butut her position at the Washington-based I.M.F. is on shaky ground, at a time when the organization faces questions over its participation in a multibillion-dollar bailout for Greece and uncertainty about the United States’ role in the organization. The fund’s executive board will meet later on Monday to consider its options. She will not serve jail time or have to pay a fine. Butut her position at the Washington-based I.M.F. is on shaky ground, at a time when the organization faces questions over its participation in a multibillion-dollar bailout for Greece and uncertainty about the role of the United States in the organization. The fund’s executive board will meet later on Monday to consider its options.
Here is a quick primer on the case.Here is a quick primer on the case.
Ms. Lagarde was accused of “negligence by a person in a position of public authority,” related to a 2007 arbitration case involving Bernard Tapie, a French tycoon close to Nicolas Sarkozy, then France’s president. In the case, Mr. Tapie was awarded more than 400 million euros, or $430 million, to settle a dispute with the partly state-owned bank Crédit Lyonnais.Ms. Lagarde was accused of “negligence by a person in a position of public authority,” related to a 2007 arbitration case involving Bernard Tapie, a French tycoon close to Nicolas Sarkozy, then France’s president. In the case, Mr. Tapie was awarded more than 400 million euros, or $430 million, to settle a dispute with the partly state-owned bank Crédit Lyonnais.
The size of the award stunned and angered the French public, and Ms. Lagarde’s advisers suggested that she annul the decision. But she declined to do because, her lawyer said, it would have resulted in costly new lawsuits by Mr. Tapie.The size of the award stunned and angered the French public, and Ms. Lagarde’s advisers suggested that she annul the decision. But she declined to do because, her lawyer said, it would have resulted in costly new lawsuits by Mr. Tapie.
She maintained her innocence throughout the trial, calling the charges politically motivated.She maintained her innocence throughout the trial, calling the charges politically motivated.
The case was heard by the Cour de Justice de la République, a special court founded in 1993 to consider criminal cases against government officials. It is made up of 12 French Parliament members and three Supreme Court justices.The case was heard by the Cour de Justice de la République, a special court founded in 1993 to consider criminal cases against government officials. It is made up of 12 French Parliament members and three Supreme Court justices.
Prosecutors had halted the investigation into Ms. Lagarde in September 2015, citing insufficient evidence against her. But the special court demanded that she stand trial anyway. The ruling also runs counter to the views of the case’s prosecutor, who said on Thursday that the evidence against Ms. Lagarde was “very weak.”Prosecutors had halted the investigation into Ms. Lagarde in September 2015, citing insufficient evidence against her. But the special court demanded that she stand trial anyway. The ruling also runs counter to the views of the case’s prosecutor, who said on Thursday that the evidence against Ms. Lagarde was “very weak.”
Ms. Lagarde can appeal the case on procedural grounds to France’s highest criminal court, the Cour de Cassation. But her lawyer has suggested she may not because there was not any punishment. Ms. Lagarde can appeal the case on procedural grounds to France’s highest criminal court, the Cour de Cassation. But her lawyer has suggested she may not because there was not any punishment. The court, which noted her national and international stature, spared her a criminal record.
Her position in the I.M.F. is under scrutiny. At the fund’s executive board meeting on Monday, the board could ask for her resignation immediately, or Ms. Lagarde could offer it voluntarily.Her position in the I.M.F. is under scrutiny. At the fund’s executive board meeting on Monday, the board could ask for her resignation immediately, or Ms. Lagarde could offer it voluntarily.
But both of these steps are considered remote, given that the board just backed her for a second term in February.But both of these steps are considered remote, given that the board just backed her for a second term in February.
The I.M.F.’s directors have been well aware of Ms. Lagarde’s legal difficulties in France, which have dogged her for around a decade. With the specter of an acquittal rising, it was expected that Ms. Lagarde would quickly move past the issues.The I.M.F.’s directors have been well aware of Ms. Lagarde’s legal difficulties in France, which have dogged her for around a decade. With the specter of an acquittal rising, it was expected that Ms. Lagarde would quickly move past the issues.
The surprise verdict could increase pressure on the fund to widen its leadership search. The I.M.F.’s practice of awarding the top job to a senior European official has come under increased criticism in recent years, especially as the influence of emerging economies has grown.The surprise verdict could increase pressure on the fund to widen its leadership search. The I.M.F.’s practice of awarding the top job to a senior European official has come under increased criticism in recent years, especially as the influence of emerging economies has grown.
Of the last six leaders of the fund, four have come from France. The last two — Ms. Lagarde and her predecessor, Dominique Strauss-Kahn — have encountered serious legal problems.Of the last six leaders of the fund, four have come from France. The last two — Ms. Lagarde and her predecessor, Dominique Strauss-Kahn — have encountered serious legal problems.