I.M.F. Chief, Lagarde, Under Investigation in France 

Christine Lagarde, the head of the International Monetary Fund, said on Wednesday that French prosecutors had placed her under formal investigation over a murky business affair that dates to her time as finance minister under former President Nicolas Sarkozy.

Ms. Lagarde said in a statement through her lawyer that she was being investigated for “simple negligence,” by the Court of Justice of the Republic, the judicial body that is charged with investigating the conduct of high government officials.

Ms. Lagarde, who has denied wrongdoing from the start, said in a statement that the decision by a judicial committee to place her under formal investigation was “totally unfounded” and that she would be returning to work in Washington on Wednesday afternoon.

“After three years of investigation and dozens of hours of interrogation, the committee concluded that I had not been guilty of any infraction,” the statement said, “so it was reduced to claiming that I had been insufficiently vigilant during the arbitration.”

In the French legal system, a formal investigation suggests prosecutors believe they have enough of a case that they may ultimately bring criminal charges and trial.

Ms. Lagarde had served as Mr. Sarkozy’s finance minister from 2007 until leaving for the I.M.F. Prosecutors have been examining Ms. Lagarde’s role in a 2008 arbitration proceeding between the government and Bernard Tapie, a onetime cabinet minister and the former owner of the Adidas sportswear empire.

Mr. Tapie, who had been in a long dispute with a state-owned bank, Credit Lyonnais, walked away from the arbitration with more than 400 million euros, or nearly $530 million at current exchange rates.

Source: NYT

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