Another day, another criminal investigation of a French IMF chief

I don’t think this will command quite the same level of tabloid outrage as the accusations against her predecessor, but it’s still worth noting:

PARIS — A French court ordered an investigation Thursday into charges that the International Monetary Fund’s new managing director, Christine Lagarde, abused her authority in a 2007 dispute involving a multimillion-dollar payout to a French tycoon while she was the finance minister of France. 

The ruling by the Court of Justice of the Republic, which oversees the actions of French ministers, means that Ms. Lagarde may have to gird for a possibly lengthy legal process to defend against the criminal charge.

But legal experts said it was unlikely to interfere with her management of the fund, which was aware before her appointment that an investigation could be called.

You can click through for the exact nature of the allegation, which concerns an arbitration panel ordered by Lagarde that a $580 million to Bernard Tapie, a former head of Adidas and Socialist minister who supported President Nicolas Sarkozy’s campaign. 

Obviously, if l’affaire DSK taught us anything, it’s to avoid jumping to conclusions this early in an investigation. But I think it’s fair to take this opportunity to ask some questions of the IMF’s executive board, which appoints the managing director. Even if, as expected, Lagarde remains at her post, it’s hard to imagine that the ongoing investigation won’t be distracting and runs afoul of the clause in her contract that requires Lagarde to “strive to avoid even the appearance of impropriety”. After the Strauss-Kahn debacle, why didn’t the board seem bothered by the fact that the French judges were likely to launch this investigation in a matter of months? It’s also worth asking why the 67-year-old Stanley Fischer was disqualified on account of his age, but a pending criminal investigation didn’t seem to be a problem. 

At the very least, I would expect this will give opponents of the gentlemen’s agreement requiring that the IMF chief always be European some more ammunition next time around.