Posted on 12/26/2003 8:40:54 AM PST by Leisler
A decade of corruption trials has chastened the French elite. But few heads have rolled and little has changed. What are the roots of French corruption?
Tim King
The business of uncovering corruption is not for the faint-hearted. In France, Eva Joly, the country's best known magistrate, lived under 24-hour police protection for six years: six years spent in the knowledge that someone out there was being paid to track her and, given the opportunity, kill her. Joly didn't investigate Colombian drug barons or mafia networks - her work took place in a country which is one of the world's most civilised. She was investigating corruption among French politicians, lawyers and company directors.
Corruption is usually a crime of the elite, of those with access to money and power. Since the mid-1980s, France has been intermittently convulsed by scandals which have crept ever higher up the country's social ladder. Those tainted by, if not convicted of, corruption have included Jacques Chirac, Alain Juppé, Roland Dumas and (godfather of them all) François Mitterrand. These are people who are educated in the same schools, and are bound by common values and ideas. They also, according to sociologist Pierre Lascoumes, share a conviction that they are above the law. Those who have actually been sent to prison for corruption (Bernard Tapie, Loïk le Floch-Prigent, Alfred Sirven) may have been government ministers or company directors, but they did not belong to that charmed circle of the French elite. It follows that those who fight corruption are usually outside the elite, and Eva Joly was the epitome of the outsider in the fight against French corruption.
Gro Eva Farseth arrived in France from Norway in 1964, aged 20, to study the language. She found temporary work as an au pair with the Joly family, part of the Parisian haute bourgeoisie, living in a hôtel particulier near the Luxembourg Gardens, and made the classic mistake of falling in love with her employer's son. "You mustn't marry this girl," wrote Dr Joly to his son. "Gro is not rich and is not likely to become so. We don't know her family. Think how coarse her features are. In our family, we have always had such fine looks." ("Gro" sounds like the French word for "fat.")
Despite this disapproval, Pascal Joly and Eva married. She had children and studied law in the evenings, sitting the entrance exam for the Ecole Nationale de la Magistrature aged 37. She was 50 before she joined the brigade financière in Paris. At that time, few magistrates volunteered to investigate fraud. "In my first interview," she wrote later, "the president of the tribunal told me, 'I've never understood these immense cases which drag on for ever. I imagine you chose fraud because you're Norwegian and Protestant.'"
During the next nine years, Joly rose to become, if you believed the headlines, the most feared woman in France. She reached the height of her fame in 1996, by which time some of the biggest names of French business and politics had been carted off to prison on her orders. The political elite, it was said, trembled at the thought of being summonsed by her.
For a period, the press loved her and the country united behind her. A handful of examining magistrates - young, dynamic warriors - were purging the corrupt old guard. Then Joly flew too high. As she opened what was to become France's biggest and most complex corruption case, the Elf investigation, she uncovered enormous bribes being offered by the then state-owned oil company, with government approval, to guarantee contracts with certain African heads of state. This had been a long established practice under governments of both left and right, but Joly found some hard evidence. Elf's business practices also brought Joly closer to home: some of the bribes paid by Elf during the 1992 purchase and construction of the former East German refinery at Leuna had apparently gone to the German CDU, Chancellor Kohl's party. It was alleged that Mitterrand, seeing Kohl slipping in the polls, ordered Elf to pay $15m into his election fund. Such accusations were too much for the French government, which lowered a curtain over Joly's work: the matter was declared secret défense, a state secret.
Public feeling for Joly also began to sour. In January 1998 she arrested Roland Dumas, president of the constitutional court, the fifth highest post in the Republic. The country was thrilled but uneasy. Was it right that France's most senior working lawyer, aged 75, be subjected to this indignity by a foreigner, and a woman? Part of the press turned. Or was it turned? After all, Joly and her colleagues were now accusing people who could pull strings at the highest level.
Like her father-in-law all those years before, the press began by attacking her appearance: the photographs chosen for publication now showed a grumpy middle-aged harridan, worn down by 18-hour days. She was the "former au pair," the "Viking" and the "Protestant." Her accent was mocked. A banker she was investigating refused to answer questions unless they were "in proper French."
Sections of the press pilloried Joly for being obsessed by Dumas's shoes and his mistress, instead of going for what they saw as the real issue: Dumas's possible connection with illegal commissions on the sale of French frigates to Taiwan. But Joly knew that the frigates were a trap: secret défense would be invoked. In January 2001, Dumas went on trial on charges of receiving misappropriated public property, and was found guilty. That vindicated Joly and shocked France. The fact that he got off on appeal - he claimed he had not known that the gifts his lover was showering on him were bribes from Elf - surprised no one in the legal profession. Joly succeeded in putting some other notables behind bars, but none were part of the inner Paris elite. By the time of Dumas's acquittal in January 2003, Joly, overloaded with 90 other cases, few of which would ever succeed, had thrown in the sponge and gone back to Norway.
France's inquisitorial system is very different from the English accusatory one, and some French examining magistrates say that it protects those in power. When a crime is suspected, no investigation may begin without the written consent of a prosecutor. If he decides there will be an investigation, he appoints an examining magistrate. The French examining magistrate has nothing in common with the English magistrate (an unpaid justice of the peace who ensures the proper functioning of the law at its primary level). The French magistrate is a legally trained "detective" with enormous power. He or she can summon anyone in the land, except the president, and keep a suspect in prison for months without trial. (It was revelations about the state of the French prisons experienced by members of the elite awaiting trial in the late 1990s that helped to tip public opinion against the magistrates.) The constitution demands that the examining magistrate be independent. But the person who gives the magistrate his cases, the prosecutor, is not independent. His career depends on maintaining a good relationship with his superiors in the ministry of justice. If he gets the feeling that the ministry would prefer a particular case not to come to court, he can split it into two or more components, allocating each to a separate magistrate, possibly in different parts of the country. According to Renaud van Ruymbeke, one of France's most experienced magistrates, this saucissonnage is the reason we never hear of some very important cases.
When opening an investigation, the prosecutor defines its parameters and the examining magistrate must not go beyond them. If, during an investigation into a false invoice for €10,000, the magistrate discovers other invoices, he can't look into them, seize evidence or interview suspects without further permission from the prosecutor. In a politically sensitive case, his request will almost certainly be taken to the justice minister, who can sit on it for a few weeks and then simply refuse it. At no time is anyone obliged to say why they have made a particular decision.
While waiting, the suspect has time to destroy evidence, move his money and even flee the country. Joly used to get round this by taking a portable fax machine with her on searches. If she found evidence of other crimes, she would fax details to the prosecutor for approval, with the added advantage that the evidence was recorded. But the magistrate's dependence on the prosecutor means that politicians retain a big influence over investigations.
In 1971, when François Mitterrand created the Socialist party, there were no laws controlling the way political parties raised funds. His party was committed to modernising and rebuilding France - hospitals, police stations, town halls, schools. Each local authority would need expert help, so the party set up a building consultancy, Urba, to advise on the site, propose the architect and vet all tenders. For this service, Urba took around 3 per cent of the total cost. The money thus raised was split: 40 per cent for Urba's running costs, 30 per cent for the Socialist party and 30 per cent for the elected representative who had procured the contract.
Urba was conceived as a way of siphoning public money into party coffers and private pockets. The system worked well, and grew rapidly as the demands of the party increased and elected representatives became greedier. Sixteen regional offices were set up, plus various lesser companies and fronts to conceal their activities from the taxman and the police.
Ten years later, François Mitterrand was elected president, the left had a majority in parliament and thousands of town halls had Socialist mayors. Urba flourished. If Mitterrand is remembered for his grandiose building projects, they weren't merely for the greater glory of France. Although Urba was discreet, its illegal practices were suspected by some. A couple of investigations were started, only to be blocked by the ministry of justice before much could be revealed.
By 1987, Urba was collecting 123m francs a year. When Mitterrand was re-elected the following year however, there were enough investigators nibbling at the party faithful for him to grant amnesty, as part of his victory celebrations, to all elected representatives (including himself) then being investigated for financial misdemeanours. Magistrates and police officers who had been pursuing a corrupt mayor or MP found years of work wasted. One can understand why most magistrates were not interested in financial cases. It was left to a couple of police officers to uncover, almost by accident, what we know about Urba.
Two Marseille policemen, Antoine Gaudino and Alain Mayot, had been investigating since 1986 a one-man building firm which had been receiving disproportionately large payments from national building consortia. The che-ques were turned into cash - 15m francs in all - which then disappeared. Three years of investigation had led Gaudino and Mayot to various dead ends. The people they interviewed were senior managers who were prepared to go to prison rather than reveal who received this cash. In April 1989 the investigation briefly touched on the Marseille office of Urba. Expecting little, they were searching for invoices when Gaudino found in a drawer four school notebooks. They contained a record of every internal meeting of Urba. "We read in black and white, in simple, clear terms the description of Urba's real activities," Gaudino later wrote about the discovery. "It was the Socialist party's back office, created to collect money through a system of bribery and corruption organised on a national scale. The 'commissions' paid to Urba as settlement of phoney 'studies' were the heavy tribute which building firms had to pay in order to get public sector contracts." At one point the notebook stated that in January 1989, at Socialist party headquarters in Paris, one of Urba's protégés was told he would be awarded the contract to build the tunnel under Marseille - on condition that he give Urba a backhander of 5.7m francs. A fortnight later Marseille town council ratified his nomination.
However, these notebooks could play no part in Gaudino's investigation of the builder. Before he could remove them from the Urba office, a new inquiry had to be authorised. And then, inevitably, the order came from the prime minister's office to halt the investigation. But Gaudino had first managed to go through the evidence carefully - all 84 boxes of it. Among other things he found proof that in 1988 Urba dropped 24m francs into Mitterrand's election campaign coffers, months after the Socialists themselves had passed a law making such contributions illegal. He distilled the evidence into a 24-page statement, which was handed to the prosecutor, who sent it straight to Paris. For a month there was silence. Then a copy got into the hands of the Canard Enchainé. Urba became front-page news. Finally, Mitterrand responded. In 1990, he announced another amnesty. All wrongdoings connected with party finance, including the funding of the presidential campaign, were wiped off the slate.
Gaudino immediately wrote a book about the investigation: L'Enquête Impossible. The facts shocked France and were so detailed that the government was forced to open a series of investigations, which led to various businessmen and mayors of large towns being sent to prison. Antoine Gaudino, meanwhile, was sacked from the police force.
He paid with his job, but Gaudino had forced the lid off the illegal funding of France's ruling political party. His investigation opened a series of ongoing battles between the judiciary and the elite which have become a staple part of French life. The word "corruption" has embedded itself in the French soul as surely as "occupation" did 60 years ago.
One of the key factors in public perception of corruption - for good and bad - has been the press. The French press is in theory freer than the British or American, since it is not bound by sub judice, but in practice it is less free since it owes greater allegiance to elected leaders. The French press receives grants, direct and indirect, from government. Until the mid-1980s there was tacit complicity between journalists and elected politicians - and, at a higher level, between media owners and government. Tentatively, a few journalists broke the silence. In 1983, Pierre Péan wrote about the unhealthy relationship between Paris and west Africa; and in 1985, the blowing up of the Greenpeace ship, Rainbow Warrior, by French agents could not be ignored. But as long as they kept a respectful distance from President Mitterrand and his family, particularly his illegitimate one, the young journalists were tolerated. Then shared interests began to bring magistrates and journalists together and their idealism gave the anti-corruption cause its impetus. Tales of corruption sold copy; fame brought the magistrates strength. For a while both sides prospered.
Then the climate began to change. Some magistrates allowed their passions and political prejudices to get the better of them. And some journalists, frustrated by delays in the legal system, and not hobbled by sub judice, began anticipating a star magistrate's next move. They grabbed headlines by announcing a search before it happened, thus giving the suspects time to destroy evidence. Investigations became media events. Magistrates became less co-operative, so certain journalists began blackmailing them, threatening to publish their mistakes or to release privileged information to defence lawyers. Joly was a victim of such tactics. During her investigation of Roland Dumas, he gave a long interview to Le Figaro the day before a heavy interrogation, establishing in advance his version of events.
At the same time individual press titles - Le Figaro, L'Express, TF1, Paris Match - were bought by big industrial groups: Lagardère, Dassault (armaments) and Bouygues (construction). "Businessmen, some of whom had already been fingered for corruption, moved their money into the media, knowing that no editor will publish defamatory material about one of the group's major shareholders," Gaudino told me. Articles began defending the poor victimised businessmen, attacking the unpatriotic magistrates (although some publications did continue digging, despite the change of ownership).
But even at their most powerful, journalists were only printing what the magistrates had told them. Rocking the boat with independent investigations is not part of the salaried journalist's job, and those working freelance lay themselves open to being sued - Denis Robert's recent book Révélation$ about the Luxembourg-based clearing house, Clearstream, has 20 libel cases against it, Gaudino's second book, The Mafia of Business Tribunals, has 43.
A friend of mine, Norbert, runs a vineyard in the Languedoc. For 30 years his family have sold wine to the local supermarket. In May 2003, the manager of the wine department changed his mind. My friend went to find out why. "I'll take it if you give me 5 per cent at year's end," said the manager. When Norbert protested, the manager waved his arm round the supermarket: "Everything you see here - from yoghurts to light bulbs - every producer pays a commission to get his product on the shelves."
Most Frenchmen recognise that corruption begins at local level. "I've never offered a single envelope to get a contract," says a builder, quoted in the magazine Capital. "But free swimming pools, oh yes, I've made those. Dozens of them." And bathrooms, even whole houses - this one for a mayor, that one for a local official. It's almost impossible for a builder to land a major contract without greasing a few palms. Similar things happen in many countries, but France has 36,777 mayors - powerful and untrained. The classic scenario is a small-town mayor needing money for his re-election campaign. He goes to a local builder and they dream up a fictitious building project for which the builder invoices the mayor. The mayor draws that money out of the municipal coffers and uses it to pay for his campaign. The builder is rewarded with a real project after the election.
In France, someone convicted of embezzlement or bribery is not ostracised by his compatriots. Following the disclosures about Socialist party financing, the treasurer, Henri Emmanuelli, was sent to prison. That in no way hindered him from being re-elected to parliament when he was released. Indeed, since bribery is considered essential for lubricating a deal, corruption-busting magistrates can find themselves accused of harming French business interests. They are also accused of swelling the National Front - Le Pen's party claims that the "true France" is squeaky clean and laps up voters disillusioned by what they read of corruption in other parties.
Corruption exists in all countries, rich and poor. Does it have distinctive roots in France? According to the writer Edmonde Charles Roux, "the Mediterranean people have a conception of honesty which is peculiar to them." In the case of France there are two aspects of all this which seem to be fundamentally different from life in Britain.
The first is the attitude to money. The British have a fairly clear view (which has been called Protestant) that money is a tool. There is nothing wrong with it in itself, but there is good money, earned by hard work, and bad money gained through greed or dishonesty. At the root of the French attitude is the Catholic view that money is tainted by sin. Yet money is necessary and since corruption is only an abuse of something already sinful, it doesn't matter too much.
That historical, Catholic view, is overlaid by the Republican rejection of all things Catholic (partly because the Catholic church itself was seen as corrupt). According to Republican logic, the term "morality" smacks of the church, so calling a politician immoral is off limits because it mixes state with church, which is forbidden by law. Republicanism has also led to a conviction that the state will foot the bill - for anything. The result in France is a confused way of thinking about money, marked by suspicion and reticence when talking about it.
The second basic difference concerns the French attitude towards politicians. In France, politics is about strength and l'art de paraître. The French don't condemn their leaders' immoral actions if they are for the common good. At one of his trials former minister Bernard Tapie admitted he had committed perjury. "But I lied in good faith," he added. "Better the dishonest minister than the stupid one," says barrister Jean-Pierre Versini-Campinchi, who is defending François Mitterrand's son in an arms trafficking case. The French do not share the notion that a politician should, personally, set a good example.
Some say the current spate of corruption in France began in the 1970s with the creation of Urba and the rise in oil price (to pay for the oil, France became involved in selling arms and nuclear components to such customers as Iraq, Angola and Gabon). But French corruption can be traced to Colbert and even further back. The Third Republic was notoriously open to bribery, yet some of the seeds of today's corruption were more likely sown when Mitterrand's generation came of age during the second world war.
At the beginning of the war, the 23-year-old future Socialist president was firmly on the Catholic right wing. At least two friends of his were members of the Cagoule, a secret society seeking to install a fascist state in France. In 1940, serving as a soldier, Mitterrand was captured by the Germans and spent 18 months as a prisoner of war, before escaping and getting a job as a civil servant in the Vichy government. For most of the war Mitterrand was pro-Pétain and furiously anti-de Gaulle. Early in 1943 he was given a medal for loyalty by Marshall Pétain (a fact he denied for most of his life). But late that year he visited London and Algiers and, seeing which way the wind was blowing, shifted away from Vichy towards de Gaulle.
By the summer of 1944, with the Allied advance from Normandy, France was torn apart by civil war. Tens of thousands of French men and women were killed by their compatriots. Property was seized "in the name of the resistance." Since wealth was associated with collaboration, private fortunes were stolen by those bold enough to seize the moment. Mitterrand was keen to get possession of a particular office building close to the Opéra in Paris. It was occupied by a German commissariat, whose director was a Frenchman by the name of Moreau. At 11am on 20th August, five days before Paris was officially liberated, Mitterrand walked into the main office with three colleagues and stuck a revolver into Moreau's chest. When Moreau asked him what he wanted, Mitterrand replied: "For you to get out!" Moreau coolly told Mitterrand that he had no legal right, Mitterrand replied: "Monsieur, il n'y a pas à discuter: c'est la révolution!"
At midday, having established his own armed guards in the lobby, Mitterrand cycled off to lunch with the mother of Jean Bouvyer, the most active of his old fascist Cagoulard friends, then working for the Germans. Meanwhile, for his personal use, Mitterrand requisitioned a "superb building" on the rue Tilsitt, close to the Arc de Triomphe. The quick-witted, the unscrupulous and the violent did well. Many postwar fortunes were started during those terrible months, along with many other postwar bad habits.
One of those fortunes was made by Mitterrand's resistance comrade and former Renault worker, the financier Roger Patrice-Pelat. In 1982, as president, Mitterrand ordered the Compagnie Générale d'Electricité to buy a company owned by Pelat. The company was valued at 60-65m francs but the nationalised electricity company paid 110m for it, the 50m or so difference finding its way to accounts in Luxembourg.
The year 2003 has seen two much publicised corruption trials in France, one involving Elf, the other the Gaullist RPR party. They surely demonstrate a French commitment to stamp out the disease? Unfortunately it is not so clear cut.
The Elf trial was the second in a long-running series (the first, mentioned earlier, ended up with various principals, including Roland Dumas, being found guilty of dishonestly using public money). Its subject was one of the world's largest thefts of public money - €400m, according to Elf, had simply disappeared. The tribunal president concentrated on the three principals (there were 37 accused in all) and, by constantly asking each one what he thought of the others' testimony, seemed to be hoping they would condemn one other. Inevitably the three men's versions differed, they bickered and got openly angry with each other. But was this a deliberate smokescreen? As enormous sums were disputed backwards and forwards until even the tribunal president admitted he was confused, the real issue was buried. Who benefited from all this money? For instance, 42m francs of public money was spent at Cartier - 2m on a necklace "for a woman in a Gulf kingdom where we'd done a good deal." But which woman? Which Gulf kingdom? Which deal? One of the accused, Alfred Sirven, had promised he had "information which would blow the Republic apart." The trial became a battle of wills to see whether he, or any of the others, would light the fuse. Elf's ex-chief executive Le Floch-Prigent, seemed on the brink a couple of times. Then he would just shrug and say, "Oh, we spread the money out equally to all the parties." Finally, as though bowing to pressure, he admitted: "The candidates for the presidential election each demanded his envelope." Well, there aren't that many presidential candidates, so that's as good as naming names - except that during his tenure as chief executive, there was no presidential election. No further questions. And no one was much the wiser as to who had benefited from the money still unaccounted for. The sentences passed on those involved in this enormous theft of public money have excited less comment in the press than, say, the defeat of the French rugby team in Australia. As well as prison sentences, the president of the tribunal imposed fines totalling €18m and has demanded that €180m be repaid to Elf. Property in France corruptly acquired has been seized. But most of the money went abroad, where it cannot be touched. Nor apparently will they touch the politicians who, no one doubts, were the main beneficiaries of the theft. And the illegal payments made by Elf in the early 1990s, while Dumas was foreign minister, to ensure the sale of frigates to Taiwan, are unlikely ever to be investigated: secret défense.
The other big trial of 2003 involved the former prime minister and current presidential hopeful, Alain Juppé. The existence of a system of misappropriating public funds to pay staff of Jacques Chirac's RPR party, of which Juppé was deputy, is not in dispute. The purpose of the trial was to establish who knew and connived. Some of the fictitious jobs were at the Paris town hall, where Juppé was also treasurer. While many witnesses said it was common knowledge, Juppé stoically maintained he knew nothing about it. The judges are due to pronounce in a few weeks, so we do not yet know who they believe, but the fact that the prosecutor called only for a suspended sentence says much about the way the judiciary see elite corruption. As Arnaud Montebourg, a Socialist champion of the anti-corruption fight said: "This means anyone guilty of speeding could be sentenced more severely than Juppé who appears to have used 25m francs of public money for illegal ends."
"The Elf trial is the culmination of an epoch," wrote Joly, who began the investigation into the company in 1996. "All the signs are that the country will not go further. It is as if French democracy has reached the limit of the revelations it can tolerate."
The French public, press and judiciary are weary - from those heady days in 1996 when police officers swept at dawn into the homes of the highest in the land, to the recent images of old men finally shuffling up the steps of the Palais de Justice to attend trial, everyone has become disillusioned. Many of the examining magistrates who defined the battle have given up. It is no longer fashionable to talk about corruption in France. Instead journalists attack Anglo-Saxon corruption in the City and money laundering in British tax havens.
But corruption weakens a state. France is a major influence in the world, yet the honesty of many of its leaders is questionable. In the last decade, 900 elected representatives and 34 ministers have been summonsed by judges (although far fewer convicted). Chirac may claim the moral high ground on the Iraq war, yet he strains the interpretation of his own country's constitution to evade prosecution for corruption at home. (The constitution rules that presidents are immune from prosecution for actions in office, but it is silent on actions before coming into office. Roland Dumas and the constitutional court ruled that immunity applied to the past too. Dumas is a political opponent of Chirac but knew he might need his help over the Elf trial.) Disregard for the law has become a national habit - as we have seen this autumn with France's attitude towards the EU stability pact. There is also the current case of France's largest bank, Crédit Lyonnais, which is facing charges in the US for lying about a takeover bid in the early 1990s when it was state-owned. Corruption in the French construction industry, too, means that the EU's "level playing field" public procurement policy - in which companies from any EU country should get equal access to contracts - is a joke which infuriates building companies in Britain and elsewhere.
Corruption bleeds a country. Of the 18bn francs it cost to build the special track between Paris and Brussels for the "very fast train" (TGV), 1,200m francs is said to have gone on bribery and embezzlement. Between 1988 and 1996, schools mushroomed around Paris, but of the 28bn francs they cost to build, investigators estimate that 560m francs went into the coffers of political parties.
Some of those in French public life appear chastened by the revelations of the past 10 years, and some new laws have been passed - particularly in the field of political party funding which has been at the root of so much embezzlement. Yet corruption in France will continue to flourish, because the nature of French society and, in particular, the structure of the French judicial system and press, permits people to get away with it. Most corruption takes place in the public sector, whose shareholders show total indifference to individual company results as long as the group as a whole appears to be flourishing.
Moreover, France's elite has no real equivalent in Britain or the US; it has a coherence and unity moulded in the famous, but tiny, grandes écoles which later permits you to float from running a minister's cabinet to running a multinational company and back. This imperviousness of the elite, illustrated so strikingly by the corruption trials, may help to explain the rise of extra-parliamentary, anti-establishment politics in France in recent years. On the right, the National Front seems to speak for a solid 15 per cent of the population, and now the far left and the anti-globalists can claim around 10 per cent. Yet that is still no reason for the French elite to change.
"This is France, Madame!" The barrister laughed as he saw Eva Joly become more and more shocked at the tales coming out of the Palais de Justice. "You wanted to change France! That is impossible."
His laughter was infectious - she couldn't help laughing too. Until tears ran down her face.
Tim King is a writer living in France
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.