Article Image
Former French Finance Minister Questioned Concerning her Role in 2008 Arbitration Hearing

Friday, May, 24, 2013

In 2008, when Christine Lagarde was France’s finance minister, she was involved in a $520 million arbitration dispute awarded to Bernard Tapie, a French businessman.  She has since moved on to become the managing director of the International Monetary Fund, a financial institution based in Washington, D.C. with major influence on the world economy, but was called in for interrogation this past week regarding details concerning her role in the 2008 arbitration case. 

Questioned by magistrates at the Court of Justice of the Republic, the 57-year-old managing director answered a grueling series of questions pertaining to the Tapie arbitration hearing.  The 2008 hearing had been the final step in a longstanding legal dispute between Tapie and Credit Lyonnais, a French bank that had been liquidated by the courts.  Lagarde was brought in for questioning due to a current investigation regarding possible malfeasance in her role as finance minister and influence on the outcome of the arbitration hearing. 

Since Ms. Lagarde’s current role with the International Monetary Fund involves ensuring that corruption is avoided in countries undergoing financial distress, there is question concerning whether she would be able to continue that role if she is found guilty of malfeasance by the French magistrates.  Gerry Rice, a spokesperson for the International Monetary Fund, stated, “The executive board has been briefed on this matter, including recently, and continues to express its confidence in the managing director’s ability to effectively carry out her duties.”

Lagarde, who has also served as an international lawyer, denies any wrongdoing in participating in the arbitration hearing.  The question on which her career is potentially balanced, however, is whether former President Nicolas Sarkozy had anything to do with her decision to be involved in the arbitrated dispute.