Court hears of shock at Tapie payout
Print Edition
A FRENCH ex-treasury official has told a court trying IMF chief Christine Lagarde for negligence that he had been shocked at how quickly the government had given up on contesting a huge state payout to business tycoon Bernard Tapie in 2008.
Lagarde, 60, faces charges of being negligent when, as French finance minister, she approved the payout, a rare out-of-court settlement which cost the French taxpayer 400 million euros (US$425 million).
It is alleged Lagarde showed negligence, leading to the misuse of public funds, by accepting too easily a costly arbitration settlement with Tapie and not contesting it to the benefit of the state.
On Tuesday, Lagarde withstood aggressive questioning at the special court in Paris which hears cases involving government ministers. The managing director of the International Monetary Fund faces up to a year in jail and a fine of 15,000 euros if convicted.
A maximum sentence could raise questions about her ability to hold on to her job at the Washington-based organization, where her French predecessor Dominique Strauss-Kahn resigned in 2011 over a sex scandal.
Evidence from Bruno Bezard, a treasury official involved in the case at the time, painted a picture of cronyism and string-pulling in Tapie’s links with the government under Nicolas Sarkozy’s presidency from 2007 to 2012.
He told the court yesterday that he was aware of “curious relationships” at the finance ministry at the time and suggested Tapie had had the run of the place.
“I recall that my employees would meet Monsieur Tapie in the ministry corridors which was rather unexpected,” said Bezard, who headed a body regulating state corporate holdings which opposed a private settlement with Tapie.
The case dates back to when Tapie sued the state for compensation after selling his stake in sports company adidas to then state-owned Credit Lyonnais in 1993.
He accused the bank of defrauding him after it resold its stake for a higher price. With the case stuck in the courts, the two sides agreed to a private settlement and a 403-million-euro payout to Tapie. Lagarde approved it.
Asked whether he was shocked by the speed of the arbitration ruling in Tapie’s favor, Bezard replied: “I was more shocked by the speed with which we gave up on contesting it than by the speed of the arbitration decision.”
Not to appeal against a “scandalous” decision was an error, he said. “Even if we had had one chance in 1,000 of winning, there were only advantages and no inconvenience,” he said.
Lagarde told the court she had spent a long time considering whether to contest the settlement but had approved it in the best interests of the state and to draw a line under an affair that had dragged on for 15 years.
Lawyers for Lagarde have said the Tapie file had been largely handled by her chief of staff at the time, Stephane Richard, who is now chief executive of French telecoms group Orange. They have suggested he had failed to pass on some necessary documents.
Richard is under a separate investigation, with five others, on suspicion of embezzlement linked to the Tapie case.
He had been due to appear as a witness at Lagarde’s trial but his lawyers said his testimony could prejudice the case against him.
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