New IMF Chief Runs Into Own Legal Troubles
Critics allege Lagarde abused her power to help a controversial Sarkozy ally.
| Posted Thursday, Aug. 4, 2011, at 2:44 PM
The IMF can’t catch a break.
Christine Lagarde, who took over for former IMF chief Dominique Strauss-Kahn this year, has run into her own legal troubles (though of a much less scandalous variety).
The French government announced Thursday that it is looking into a possible abuse of power by Lagarde during her time as French finance minister, the Associated Press reports.
The investigation is focused on a $400 million arbitration deal in 2008 in favor of a controversial French tycoon, who was a high-profile backer of French President Nicholas Sarkozy. Critics allege that Lagarde exerted improper influence in the case in favor of the businessman.
Prosecutors say they are investigating possible charges of "complicity to embezzlement of public funds" and "complicity to forgery."
The investigation will likely take months, and Lagarde can only face questions from prosecutors if the probe results in legal charges. Later on Thursday, the IMF's executive board expressed confidence in Lagarde and said in a statement that the investigation should not interfere with her job.
In response to the news of the inquiry, Lagarde's lawyer, Yves Repiquet, said he was, likewise, confident his client would be vindicated. "We'll get to the bottom of things," Repiquet said. "There will no longer be the least doubt."
