August 28, 2014 in Business

IMF chief investigated in French corruption case

Associated Press
 

PARIS – Christine Lagarde, the chief of the International Monetary Fund, was put under official investigation for negligence in a French corruption probe that dates back to her days as France’s finance minister.

After a fourth round of questioning before magistrates on Wednesday, Lagarde said she was returning to her work in Washington, and called the investigation “without basis.” She is the third IMF managing director in a decade to face legal troubles.

Lagarde and her former chief of staff have faced questions about their role in an arbitration ruling that handed $531 million to a French businessman with a checkered past.

“After three years of proceedings, dozens of hours of questioning, the court found from the evidence that I committed no offense, and the only allegation is that I was not sufficiently vigilant,” she said in a statement.

Under French law, the official investigation is equivalent to preliminary charges, meaning there is reason to suspect an infraction. Investigating judges can later drop a case or issue formal charges and send it to trial.

Defense lawyer Yves Repiquet said the negligence claim was “paltry,” “extremely minor” and “unfounded,” and said investigators could not make a valid case for tougher penalties. He said he will file a motion to have the preliminary charge dismissed.

“There was no reason for her to resign,” Repiquet said by phone. Lagarde’s predecessor at the IMF, Dominique Strauss-Kahn, quit after he was charged with attempted rape in the United States. The New York charges were later dropped. Strauss-Kahn is charged with aggravated pimping in a separate case in France.

A previous IMF chief, Rodrigo Rato, faced allegations of fraud in Spain after the bank he led as chairman collapsed. The collapse of Bankia came well after Rato’s tenure in the Washington-based IMF ended in 2007.

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