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Lagarde, IMF Chief Found Guilty of Negligence | ||||||||
2016-12-20 | ||||||||
The International Monetary Fund threw its support behind its leader, Christine Lagarde, on Monday despite her conviction in a French court on charges of misusing public funds.
In a statement, the directors of the I.M.F. said they had considered the court’s decisions and had “full confidence in the managing director’s ability to continue to effectively carry out her duties.” Yet the verdict — with its potential to tarnish Ms. Lagarde as a leader — came at a critical juncture for the I.M.F. Founded and largely managed by Europeans and Americans, the fund oversees a global economy in which faster-growing countries like China are seeking a greater role.
“She has been a very effective leader,” said Edwin M. Truman, a specialist in international finance formerly at the Federal Reserve and the United States Treasury. “Yes, there are big questions about the fund’s future. But for her to have to step down now — well, that would be complicated.”
For the Trump administration, “I don’t think this kind of ethical question is likely to be the highest priority,” Mr. Truman said. While the I.M.F. and other global institutions did not figure in the presidential debate, Mr. Trump repeatedly criticized a “global power structure” that fixed the economy against workers. “At bottom, it’s all about French politics,” Mr. Truman said. Members of the I.M.F. board were well aware that Ms. Lagarde was facing trial in her native France over allegations that occurred when she was the finance minister in the administration of Nicolas Sarkozy. The consensus among the directors was that Ms. Lagarde’s transgressions occurred when she was not at the fund — in contrast to those of her predecessor, Dominique Strauss-Kahn — and since taking charge in 2011, she had proved to be a leader capable of presenting a softer side of the fund while fighting hard to bolster its legitimacy in the aftermath of the financial crisis. More so than her predecessors, Ms. Lagarde has pushed the fund to be more aggressive in taking up the cause of women and focusing attention on growing issues of inequality around the world.
Nevertheless, while Ms. Lagarde may have retained the backing of her board for the moment, over the longer term, her French legal problems may have hurt her most valuable asset — her carefully constructed public persona. “She was a breath of fresh air, someone representing true change from the past,” said Peter Doyle, a former economist at the fund and now an outspoken critic. “Now she is just another tainted European leader.”
“It would be complacent if not delusional to say there will be no impact on the institution,” said Nicolas Véron, a specialist on international economics at the Bruegel Institute in Brussels. “The only question is how big is the impact — and how does it compare with the need for stability.” Ms. Lagarde’s legal issues in France have dogged her work at the fund since she was appointed in 2011. She took over as managing director after Mr. Strauss-Kahn resigned following accusations that he sexually assaulted a maid in a New York City hotel. The case against Ms. Lagarde centered on Bernard Tapie, a former entertainer and owner of Adidas who had previously been jailed on corruption charges. Mr. Tapie accused the lender Crédit Lyonnais, in which the French state had a stake at the time, of cheating him when it oversaw the sale of his share in the sportswear empire in 1993. Years of costly legal battles ensued. The court did not fault Ms. Lagarde for approving the arbitration, but it ruled that she had been negligent for not appealing the decision. The court, noting that a judge had previously invalidated the payout of 400 million euros to Mr. Tapie in a 2015 ruling and that she had “national and international” stature, decided not to punish Ms. Lagarde and spared her a criminal record. Speaking to reporters after the hearing, Ms. Lagarde’s lawyer, Patrick Maisonneuve, said he had a “mixed” reaction to the verdict. “On the one hand, she is found responsible, but given the circumstances, given the responsibilities that Ms. Lagarde had at the time — in 2008, we were in a major economic crisis — the court decided that it would not sentence Ms. Lagarde to anything,” he said. | ||||||||
Posted by:Steve White |
#3 From 1993 to 2008 there was a long legal battle between Tapie and the Crédit Lyonnais bank (partly state-owned bank). Crédit Lyonnais had From 1993 to 2008 there was a long legal battle between Tapie and the Crédit Lyonnais bank (partly state-owned bank). Crédit Lyonnais had allegedly defrauded Tapie in 1993 and 1994 when it sold Adidas on his behalf to Robert Louis-Dreyfus, apparently by arranging a larger sale with Dreyfus without Tapie's knowledge. In 2008 a special judicial panel ruled that Tapie should receive compensation of €404 million from the French Ministry of Finance, headed by Christine Lagarde. She decided not to challenge the ruling. On December 3, 2015 court ruled that Tapie should return this compensation with interest, following investigation into alleged abuse of power by Ms. Lagarde.[3] On December 19, 2016 Lagarde was convicted of negligence; however, the conviction was not deemed a criminal record. A 23 years "saga", so far. |
Posted by: Willy 2016-12-20 11:37 |
#2 What, no French Guiana? |
Posted by: no mo uro 2016-12-20 05:20 |
#1 A conviction doesn't mean shit if there's no jail time or a huge fine. She skated, pure and simple. |
Posted by: Raj 2016-12-20 00:55 |