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| Christine Lagarde avoids jail despite guilty verdict in negligence trial | |
| (about 1 hour later) | |
| Christine Lagarde has been found guilty of negligence in approving a massive payout of taxpayers’ money to controversial French businessman Bernard Tapie but avoided a jail sentence. | Christine Lagarde has been found guilty of negligence in approving a massive payout of taxpayers’ money to controversial French businessman Bernard Tapie but avoided a jail sentence. |
| A French court convicted the head of the International Monetary Fund and former government minister, who had faced a €15,000 (£12,600) fine and up to a year in prison. But it decided she should not be punished and that the conviction would not constitute a criminal record. | A French court convicted the head of the International Monetary Fund and former government minister, who had faced a €15,000 (£12,600) fine and up to a year in prison. But it decided she should not be punished and that the conviction would not constitute a criminal record. |
| The verdict came as a surprise as even the public prosecutor had admitted the evidence against Lagarde was “weak” during a five-day trial last week. Jean-Claude Marin told the court Lagarde’s actions fell into the category of politics and not criminality and called for her to be acquitted. | The verdict came as a surprise as even the public prosecutor had admitted the evidence against Lagarde was “weak” during a five-day trial last week. Jean-Claude Marin told the court Lagarde’s actions fell into the category of politics and not criminality and called for her to be acquitted. |
| Lagarde, who has always argued she did nothing wrong and acted “in the public interest”, was not present for the judgment. Her lawyer Patrick Maisonneuve said she had flown back to Washington DC, where the IMF is based. | Lagarde, who has always argued she did nothing wrong and acted “in the public interest”, was not present for the judgment. Her lawyer Patrick Maisonneuve said she had flown back to Washington DC, where the IMF is based. |
| Within hours of the court’s decision, the IMF’s 24-member board convened a meeting to discuss Lagarde’s future. The IMF’s shareholders were aware of the pending court proceedings when they appointed Lagarde to a second five-year term earlier this year and were weighing up whether she – and the IMF – had suffered lasting reputational damage. The decision not to impose any penalty despite the guilty verdict was seen by some observers as enhancing the chances of the IMF’s managing director holding on to her job. | Within hours of the court’s decision, the IMF’s 24-member board convened a meeting to discuss Lagarde’s future. The IMF’s shareholders were aware of the pending court proceedings when they appointed Lagarde to a second five-year term earlier this year and were weighing up whether she – and the IMF – had suffered lasting reputational damage. The decision not to impose any penalty despite the guilty verdict was seen by some observers as enhancing the chances of the IMF’s managing director holding on to her job. |
| Support for Lagarde came from the former US Treasury secretary, Larry Summers, who said it was a “sorry day for French justice”. Lagarde was the “best thing” to happen to the IMF in a long time, Summers added. | Support for Lagarde came from the former US Treasury secretary, Larry Summers, who said it was a “sorry day for French justice”. Lagarde was the “best thing” to happen to the IMF in a long time, Summers added. |
| Lagarde had appeared before the Cour de Justice de la République, a special tribunal set up to judge ministers and public officials for alleged crimes committed while in office. It is made up of three professional judges and 12 politicians from the French houses of parliament. | Lagarde had appeared before the Cour de Justice de la République, a special tribunal set up to judge ministers and public officials for alleged crimes committed while in office. It is made up of three professional judges and 12 politicians from the French houses of parliament. |
| It was only the fifth time the court had sat and its judgments cannot be appealed against. | It was only the fifth time the court had sat and its judgments cannot be appealed against. |
| Lagarde’s lawyer Patrick Maisonneuve told journalists after the judgment: “We would have preferred an acquittal, but it should be remembered that the court has not imposed any sentence whatsoever.” | Lagarde’s lawyer Patrick Maisonneuve told journalists after the judgment: “We would have preferred an acquittal, but it should be remembered that the court has not imposed any sentence whatsoever.” |
| The Tapie case has rumbled on since 1993 when the businessman sold his majority share in the sportswear company Adidas to Crédit Lyonnais, a bank then part-owned by the French state, to avoid a conflict of interest when he took up a government post. | The Tapie case has rumbled on since 1993 when the businessman sold his majority share in the sportswear company Adidas to Crédit Lyonnais, a bank then part-owned by the French state, to avoid a conflict of interest when he took up a government post. |
| Tapie, 72, accused the bank, which later sold the shares at a higher price, of defrauding him by undervaluing his investment. | Tapie, 72, accused the bank, which later sold the shares at a higher price, of defrauding him by undervaluing his investment. |
| Lagarde, 60, was the finance minister under Nicolas Sarkozy between 2007 and 2011, when she became head of the IMF – replacing her disgraced compatriot Dominique Strauss-Kahn, who had been put on trial for attacking a New York hotel maid. She referred the case to a private arbitration panel, which awarded Tapie more than €400m. She was accused of “negligence with public money” for having paid up and not contested the award, which experts had advised against. | Lagarde, 60, was the finance minister under Nicolas Sarkozy between 2007 and 2011, when she became head of the IMF – replacing her disgraced compatriot Dominique Strauss-Kahn, who had been put on trial for attacking a New York hotel maid. She referred the case to a private arbitration panel, which awarded Tapie more than €400m. She was accused of “negligence with public money” for having paid up and not contested the award, which experts had advised against. |
| She denied any wrongdoing and claimed she had not seen all documents suggesting the payout should not be made. Six others, including her former chief of staff Stéphane Richard, now head of telecoms giant Orange, are being investigated for fraud. All have denied acting illegally. | She denied any wrongdoing and claimed she had not seen all documents suggesting the payout should not be made. Six others, including her former chief of staff Stéphane Richard, now head of telecoms giant Orange, are being investigated for fraud. All have denied acting illegally. |
| Tapie has since been ordered to pay back the €400m but is appealing against the decision. | Tapie has since been ordered to pay back the €400m but is appealing against the decision. |
| Detectives have spent years trying to establish if the award was given to Tapie under Sarkozy’s orders in return for the businessman’s support in his successful 2007 presidential campaign. | Detectives have spent years trying to establish if the award was given to Tapie under Sarkozy’s orders in return for the businessman’s support in his successful 2007 presidential campaign. |
| The IMF’s administrative body was due to meet to discuss the conviction on Monday. If Lagarde is forced out after the verdict, the battle to replace her will be a tough one. The IMF has 24 voting board members who represent 189 countries. Lagarde won last time despite widespread criticism that the organisation has failed to appoint a non-European leader in its 72-year history. | The IMF’s administrative body was due to meet to discuss the conviction on Monday. If Lagarde is forced out after the verdict, the battle to replace her will be a tough one. The IMF has 24 voting board members who represent 189 countries. Lagarde won last time despite widespread criticism that the organisation has failed to appoint a non-European leader in its 72-year history. |
| Lagarde had the backing of then US Treasury secretary Tim Geithner whose support denied the job to Agustín Carstens, current governor of the Bank of Mexico, who will be a strong candidate to replace Lagarde if she is made to go. Carstens is set to become general manager at the International Bank of Settlements in Basel, Switzerland next year. | Lagarde had the backing of then US Treasury secretary Tim Geithner whose support denied the job to Agustín Carstens, current governor of the Bank of Mexico, who will be a strong candidate to replace Lagarde if she is made to go. Carstens is set to become general manager at the International Bank of Settlements in Basel, Switzerland next year. |