A Report From the Trial of the Head of the IMF

 

The Financial Times reports:

Wherever she travels, Christine Lagarde receives head of state treatment. But back home in Paris this week, in the chamber where Marie-Antoinette was sentenced to death by guillotine during the French Revolution, the chief of the International Monetary Fund faced unimpressed judges and uncompromising former colleagues.

For five days in the small, wood-panelled room, she gave evidence and listened to damning testimonies that pointed to her alleged failings in preventing a fraudulent €403m payout to businessman Bernard Tapie when she was French finance minister under President Nicolas Sarkozy. Most of the time, she sat on a green leather armchair and diligently took notes. On Friday, Ms Lagarde eventually let her voice crack.

“These five days of hearings bring to an end five years of ordeal, for my family, my partner, my sons, my brothers, who are here, my friends, former members of my cabinet, and in the world and particularly in Washington those who follow this trial,” she told the black-cloaked judges, holding back tears.

Ms Lagarde’s trial, on charges of negligence, was always going to be a humbling experience. She sought to convince the tribunal that she had seen nothing coming when she was presented with the option to settle a longstanding dispute with Mr Tapie. She portrayed herself as a political novice who was too trustful of her staff and did not master the codes of the powerful administration she had under her watch.

Ms Lagarde admitted not reading internal memos advising against an out-of-court arbitration, that contradicted her chief of staff’s recommendation. She said she was kept unaware of an important meeting at the Elysée attended by her chief of staff — Stéphane Richard — and Mr Tapie. Challenged on her decision not to appeal the settlement, Ms Lagarde, a former lawyer, said she did so after carefully weighing the appeal’s chances of success.

“Was I deceived? Were a number of us deceived? Perhaps,” Ms Lagarde asked. “Was I negligent? No.”

A conviction — Ms Lagarde is facing up to one year in jail and a €15,000 fine — could weaken her position at the helm of the IMF and hurt her reputation...

The IMF board is expected to meet on Monday, when the verdict will be announced. People close to Ms Lagarde say the IMF could reiterate its support even if she is found guilty, depending on the sentence.

Ms Lagarde’s line of defence seemed at times to irk the court president, Martine Ract Madoux, who pointed out that no fewer than 22 notes from the treasury unit that had sounded the alarm bell had been sent to her and that articles in the press had pointed at the suspicious nature of the arbitration.