The sting in the tale of Tapie and the Crédit Lyonnais payout

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A public liability established by Strauss-Kahn

"I've always done everything in complete transparency, always," Lagarde insisted in a press conference on April 4th. In a communiqué released separately by her ministry, Lagarde warned that she was even considering her own legal action against the Socialist MPs for suggesting her complicity in any wrongdoing. The communiqué defined her role as that of "managing the bankruptcy of the Crédit Lyonnais into which its directors had led it into during the 1990s". It claimed that the decision to go for private arbitration was "to safeguard the interests of the State" by halting legal action in court that had already lasted "numerous years" and could have otherwise lasted for "several more years".

Meanwhile, the Court of Accounts, the national audit office, has recommended that two senior officials should be sent before a disciplinary court for their role in the huge payout to Tapie. One of them, CDR head Jean-François Rocchi is suspected of having modified the records of the CDR board meeting that ratified the sum. He has strenuously denied any wrongdoing.

Now Mediapart has learnt that the basis for public liability for payment of the compensation awarded to Tapie was established in 1999 by the current International Monetary Fund chief Dominique Strauss-Kahn when he was French economy and finance minister.

Strauss-Kahn, serving in the Socialist government led by then-prime minister Lionel Jospin, oversaw the privatization of the Crédit Lyonnais in 1999. In an attempt to raise the value of the bank, he ordered that the CDR, established in 1995 to manage its liabilities, would be responsible for a "certain number of litigation risks", according to a letter he wrote on March 17th 1999 to the bank's then-chairman Jean Peyrelevade. Among them, Staruss-Kahn wrote, were the "eventual financial consequences of the actions engaged by the mandated liquidators of the Tapie group." In effect, Strauss-Kahn relieved the bank's future owner, the Crédit Agricole, of any danger it would inherit a financial liability in the Tapie case.

In a report sent this year to French Prime Minister François Fillon, dated February 3rd and reproduced below here, the president of the Court of Accounts, Didier Migaud, questioned the legality of Strauss-Kahn's move.

"The scope of the CDR's guarantee towards [Editor's note: the liabilities of] the Crédit Lyonnais remains a source of dispute, which has already led the Court [audit office] to express its reservations after its earlier audit," wrote Migaud. "The Court considers that the CDR substituted itself in place of the responsibility of the Crédit Lyonnais in the Adidas-Tapie case, above what could have been authorized in its [founding mission] protocol. The letter of the Minister of the Economy, Finance and Industry dated March 17th 1999 cannot be considered as simply interpretative."

 

Didier Migaud's letter to Prime Minister François Fillon (click on the document to enlarge):

 

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The sums awarded to Bernard Tapie, gross and net, cited in this report were corrected on May 21st according to latest information revealed by the French national audit office, the Court of Accounts. They were in fact greater than originally reported, by 13 million euros for the gross sum, and by 10 million euros for the net sum, he received.