A senior Paris public prosecutor has found evidence suggesting French finance minister Christine Lagarde, candidate to replace Dominique Strauss-Kahn as head of the International Monetary Fund, acted in a manner of "obstructing the law" in the controversial arbitration procedure that awarded French tycoon Bernard Tapie 403 million euros of public funds in 2008. Mediapart has obtained exclusive access to a report sent by the prosecutor, Jean-Louis Nadal, to the Court of Justice, which investigates cases of suspected misdeeds by serving ministers, in which he says Lagarde "constantly" usedher ministerial position to reach a "favourable" outcome for Tapie. Michel Deléan reports.
It was in April that Jean-Louis Nadal, public prosecutor with the Cour de cassation, France's highest court of appeal, was petitioned by a group of Socialist Party Members of Parliament to investigate evidence of suspected grave ministerial misconduct surrounding an arbitration procedure that awarded French businessman and one-time maverick politician Bernard Tapie with 403 million euros in July 2008.
Tapie was involved in a lengthy legal fight for damages which he brought against the Consortium de Réalisation (CDR), the French government entity responsible for the liabilities of the defunct bank, which collapsed following a high-risk lending scandal in 1993.
The Socialist MPs were concerned by the motives for the decision by French finance minister Christine Lagarde, 55, and her predecessor, Jean-Louis Borloo, a close friend of Tapie for whom he once served as a lawyer, to remove the case from the justice courts and opt for a private arbitration procedure that was highly favourable for Tapie. The decision to drop the legal fight and enter into arbitration was taken despite an October 9th 2006 plenary meeting of magistrates at the Cour de cassation (highest appeal court) had reached a judgment in the case that was considered to be favourable to the interests of the CDR and, by consequence, the state.
Lagarde, who became finance minister in June 2007 and who on Wednesday announced her candidature to become IMF Managing Director, has repeatedly denied any wrong doing and insisted that the reason to opt for arbitration was to save the state further legal fees as the dispute dragged on through the courts.
But an investigation by French parliament's Finance Commission, and a detailed report on the matter by the France's national audit office, the Court of Accounts, both found evidence that raised doubts over the conduct of Lagarde andother senior officials concerned by the case.
On May 10th, Prosecutor Nadal , after a preliminary enquiry into the MPs' petition, requested the Court of Justice of the French Republic, the CJR (which investigates cases of suspected misdeeds by serving ministers), to investigate a possible "abuse of authority" by Lagarde in her role for the settlement between the CDR and Tapie. The CJR's commission des requêtes, a ‘Petitions Commission' made up of a panel of judges which considers the validity of cases sent for the attention of the court, is expected to reacha decision in June.
Mediapart has gained exclusive access to the text of the report Nadal sent to the CJR, which we cite over the following pages (reproduced in full on page 3), in which the prosecutor described Lagarde's behaviour as "aimed at obstructing the law". The tone of the document, officially termed ‘Arequest for advice' and sent to Gérard Palisse, president of the commission des requêtes, is scathing.
Meanwhile, two separate reports have been sent to the French Budget and Finance Disciplinary Court (Cour de discipline budgétaire et financière) by the French national audit office, the Court of Accounts, (la Cour des comptes), concerning the questionable behavior of two senior civil servants involved in agreeing the settlement with Tapie.