By Chine Labbe and Julien Ponthus, Reuters
PARIS - French police searched the Paris apartment of International Monetary Fund chief Christine Lagarde on Wednesday as part of an investigation into misuse of public funds in her previous role as finance minister of France.
The probe centers on her awarding of a 2008 arbitration payment to a businessman supporter of ex-president Nicolas Sarkozy, her lawyer said.
Lagarde, who was serving in Sarkozy's government at the time, has repeatedly denied wrongdoing in ending a judicial battle against billionaire Bernard Tapie and instead opting for arbitration.
Investigating magistrates suspect her of complicity in embezzling public funds after she overruled objections from advisers to proceeding with the controversial $367 million to Tapie.
"This search will help uncover the truth, which will contribute to exonerating my client from any criminal wrongdoing," Lagarde's lawyer, Yves Repiquet, told Reuters.
It was conducted a day after France's budget minister resigned after being targeted in a tax fraud inquiry.
Socialist President Francois Hollande came to power last May vowing to crack down on the cozy relationships between politicians and businessmen he said were rife under Sarkozy.
Lagarde was in Frankfurt and not in her Paris flat at the time of the search, a spokesman for the IMF chief said.
Copyright 2013 Thomson Reuters
Iceland told the IMF to take a friggin' hike. Argentina told IMF to take a friggin' hike. Now the Cyprus parliament has told IMF to take a friggin' hike. Could turn into a trend! Oh, well, there goes global domination by the banker boys. And anyone who conflates Cyprus to Prince Ferdinand needs to take a hike too.
This police raid and the 20-year old case is tied directly to her colossal failure in Cyprus. It is also directly tied to Bernanke’s indication that he wouldn’t seek to be Chairman of the Federal Reserve after his term is up.
Again, what the IMF’s catastrophe in Cyprus has done is put into jeopardy every single dollar that any central bank has put in to maintain sovereign solvency. This is enormous. The IMF originally telling Cyprus to ‘Go to hell,’ has in fact said to the world, ‘Go to hell.’ The Western financial world may now indeed go to hell, and Fed Chairman Bernanke knows it.”
Eric King: “Just so I understand this, the degree of damage that has been done because of the IMF disaster in Cyprus now has Bernanke saying, ‘I want out.’”
Sinclair: “This historic event is one of the single largest and most important in my 50+ years of being involved in markets. It is as serious as what I have said, and the Chairman of the Federal Reserve is saying, ‘They are going to screw up all of my work; to hell with them, I don’t want to be Chairman when this hits the fan.”
Today legendary trader Jim Sinclair told King World News that Lagarde’s IMF Cyprus disaster, in stunning fashion, has now forced Chairman Ben Bernanke out of the Fed. Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, takes readers on a trip down the rabbit hole that has become know as “The Cyprus Catastrophe” in this extraordinary and exclusive interview:
Eric King: “Remarkably, just a day and a half ago you stated on King World News that ‘Putin has faced down the International Monetary Fund, which by the way is located in Washington, DC, and is in fact Washington itself. So in the sense of a Cold War, you have Washington vs Moscow, and Moscow won this round. The bottom line here is Lagarde took on Putin, but Putin has checkmated both her and the IMF the same way a Russian grandmaster chess player would destroy his opponent.’ Within hours of KWN reporting that news, Lagarde's apartment was raided by police and she is now scrambling.”
Sinclair: “The important point is, how long has this case been going on in which there was a police raid on the Lagarde’s apartment? This is a 20-year old case, making it look a little less like just a coincidence. I would also add to that I don’t think it’s any coincidence that the Chairman of the Federal Reserve has now indicated the possibility that he will not be reappointed, and that he will not accept the reappointment....
“In truth, the IMF disaster which has just taken place in Cyprus is comparable to the assassination of Archduke Ferdinand that started World War I. This is a major event in history. We have the mainstream media and some talking heads telling people that ‘Cyprus is a tempest in a teapot.’ That is completely false.”
Eric King: “This IMF disaster which has occurred, and obviously Lagarde is now being dealt with, but going forward you talked about the possibility of destabilization in the Western world. You are saying they can’t make a misstep here, and what about this Bernanke development?”
Sinclair: “The gamble was they were going to shift the onus of the funds required from the busted banks to the depositors and away from central banks. That would have been to the depositors, and away from QE. This is also being proposed in New Zealand and in Spain, but in tiny, negligible amounts. Obviously no amount of theft is acceptable, but the theory coming out of Cyprus was a 10% theory, and that is enormous money.
It was a historic mistake because what Mrs. Legarde and the IMF have done is potentially ruined all of Bernanke’s work. It has also potentially ruined all of the work of the central banks which have been doing QE in order to maintain sovereign solvency.
If she (Lagarde) had succeeded, the ease would have been to the governments, and the pressure would have been to the depositors. Up to now what has been done is to insure the bank depositors without them having to lose. This was the ‘Super Glue’ to hold together the possibility of an economic recovery. That’s what has been put into risk because of this debacle by Mrs. Legarde and the IMF in Cyprus.