It was over a year ago when we reported that a French court has put Christine Lagarde, head of the International Monetary Fund, under a formal probe for negligence in a corruption investigation involving famous financier Bernard Tapie, dating back to her days as finance minister.
Back then Lagarde said the decision was "without basis," adding she would challenge it with a higher court. The investigation is part of a complex, drawn-out probe into the alleged misuse of state funds. The case stems from a decision in the 2008 to use arbitration to settle a dispute with business tycoon Bernard Tapie. The arbitration panel awarded €420 million to Mr. Tapie.
"The magistrates of the court of justice of the Republic have decided to place me under formal investigation," Ms. Lagarde said in statement in August of 2014. "After three years of procedure, the sole surviving allegation is that through inadvertence or inattention I may have failed to intervene to block the arbitration that brought to an end the longstanding Tapie litigation," she added.
We said that this development was hardly a shock: after two years ago the news hit that "IMF's Lagarde Flat Raided Over French 'Payout' Probe" with her ascent to the head of the IMF also riddled with numerous allegations of impropriety involving the Tapie matter. However, a year ago, such outside interventions were below the radar, and certainly never escalated to anything formal or official.
We left it by wondering who and why had been angered by her policies over the past three years, and who could be her replacement, confident her days as IMF head were over: "as for Lagarde, we are confident she and Angelo Mozillo will have enough fake tanning tips to exchange during their long and worry-free retirement."
Then, in a surprise to us, the Lagarde scandal did what it has done so well for the past 4 years: it went dormant again... until earlier today when in a surprising escalation, and one which is as financially motivated as it is political, a French court ordered the orange-skinned IMF head to finally face trial over her alleged role in the Tapie payout scandal.
Reuters reports that the case, which has roots dating back more than 20 years, will be heard by magistrates at the Cour de Justice de la Republique, which judges ministers for crimes in office, France's prosecutor general said.
Lagarde, who is accused of alleged negligence over the Tapie affair while serving as France's finance minister, said she would appeal against the decision, adding that she shared the prosecutors' view there was no basis for any charge against her.
"Ms. Lagarde would like to reaffirm that she acted in the best interest of the French state and in full compliance with the law," said a statement issued by her office.
But what is most unexpected about this outcome is that France's top prosecutor had recommended in September that investigations against Lagarde in the case be dropped.
Her lawyer, Yves Repiquet, was stunned: "A decision like this is incomprehensible."
"I sent her a text, she was really surprised and very disappointed," he said, adding that his client was currently in Washington. Well, yes: who wouldn't be surprised to learn they are not above the law.
The IMF's executive board reaffirmed its confidence in Lagarde's ability to effectively carry out her duties, IMF Communications Director Gerry Rice said in a statement.
Nonetheless, the fact that Lagarde is now going to trial despite the top prosecutor demanding that her trial be thrown out, shows that this is now a financial matter, one which very likely involves the IMF's desire to see Greek debt haircuts, something which made Lagarde and company many enemies over the summer when it was the IMF's policy recomomendations themselves which pushed the Greek anti-austerity movement over the edge and led to the ill-fated Greek referendum (everyone knows what happened then).
And while Europe may desperate want to give the impression it has moved in, it certainly has not forgotten, and now an unknown someone in the dark corridors of Brussels, or perhaps the C-suites of Wall Streets, is demaning a new and clean slate at the top of the world's sovereign debt guarantor, one who has a more "pro-Brussels/anti-debt reduction" philosophy than Lagarde.
Of course, this wouldn't be the first time that an IMF head has been "sacrificed" for the greater good: recall the impressive framing of Lagarde's predecessor Dominique Strauss-Khan, who from frontrunning French presidential candidate, suffered a political and career trainwreck overnight when he allegedly raped a maid at a NYC hotel.
As for Lagarde, we are confident that after a kangaroo court lasting at least several weeks, she herself will submit her resignation, and while the ending may not be literally taken from "Kill Bill" despite the eerie similarities...
... her career at the IMF has entered its terminal countdown.