Publication: Washington Post Issued: Date: 1998-08-02 Reporter: Geoff Harris Editor:

A Very French Pastry


Publication  Washington Post
Date 1998-08-02
Reporter Geoff Harris


The French were still celebrating their World Cup victory when I was in Paris two weeks ago, but among senior political figures, this has been an anxious summer. The mood was summed up last month by a French magazine called Marianne, which noted that there is a large bomb ticking away in the midst of French political life--a scandal that could explode with tremendous force or, as is often the case in France, be quietly defused and buried.

Just how weird and spooky is this? Political insiders are speculating privately whether a key witness and the judge who's been investigating it for the past two years may wind up dead. At times, the Parisian political gossip has sounded closer to what you might hear in Beirut and Damascus than in a European capital.

What's motivating this elite anxiety is that the French system of political payoffs is coming unstuck. The system has been gossiped about for years--envelopes of cash passed to government ministers, fixers who launder commissions totaling hundreds of millions of dollars, networks of operatives in the French government who are loyal to various political patrons--but this is the first time hard evidence has emerged to substantiate some of the rumors.
The Gallic scandal resembles our own campaign-finance imbroglio in certain respects--notably the allegation that business interests are pumping millions of dollars to politicians. The difference is that, in the French case, rather than going into the politicians' campaign coffers, the money seems to have gone to the politicians themselves.
As it happened, I was in France this summer partly to promote the French edition of my last novel, "A Firing Offense," which describes an imaginary scandal involving huge payoffs and kickbacks on French foreign contracts. A year ago, this plot was regarded as so outrageous that none of the leading French publishers would touch the book. Now, it has become conventional wisdom, and "Le Scoop" is selling well.
Here's a brief tourist's guide to what the French call "L'affaire Elf ," as outlined in French news reports and a superb new book by two journalists, Valerie Lecasble and Airy Routier:
A little over two years ago, a crusading judge named Eva Joly began investigating corruption at the state-owned Elf Acquitaine oil company during the tenure of its former chief executive, Loik Le Floch-Prigent, from 1989 to 1993. Joly gradually gathered evidence of secret Swiss bank accounts, payoffs to political leaders in Germany and Africa and--most damaging of all--kickbacks on big foreign contracts to some prominent political personalities in France.
The central figure in the scandal is now Roland Dumas, the former foreign minister and intimate friend of the late French president Francois Mitterrand. Dumas, now head of the country's highest court, is a Parisian intellectual of the Left--with a network of stylish friends, a distinguished law practice and a famous collection of French modern art. But according to the evidence gathered by Joly, he has been living the life of a cartel kingpin. Specifically, it's alleged that he benefited from millionsof dollars in payoffs to his mistress.
Dumas's link to Elf was a woman named Christine Deviers-Joncour, his "close companion" since the late 1980s. (French magazines have assembled a delightful gallery of pictures of them together--at the French Open tennis matches, at the opera, even on a trip to Beijing!) In 1989, allegedly at Dumas's suggestion, this femme fatale was hired by Elf 's Swiss subsidiary as a lobbyist. A 1990 contract specified that she would be paid a retainer of 50,000 francs a month (about $8,300), plus a credit card on which she charged about 200,000 francs a month (about $33,000). One notorious use of that card was to buy Dumas a $1,800 pair of handmade boots from a boutique in Paris. Her paymaster was the head of Elf 's Swiss subsidiary, a shadowy figure named Alfred Sirven who has emerged as the potential key witness in the case.
These baubles for Dumas's mistress might have garnered a Gallic shrug. What made it a scandale was the allegation that Sirven in 1990 offered her services to another huge, state-owned company, the defense giant Thomson-CSF, which needed French government approval of a $2.5 billion deal to sell frigates to Taiwan. Her cher ami, Dumas, was at that time a key opponent of the frigate deal, arguing that it would harm French relations with Beijing. But it was approved in 1991 (over Dumas's objections, he claims).
As Joly and her investigators dug into the maze of Elf 's Swiss accounts, they found evidence that payments to Deviers-Joncour had totaled more than $10 million. Her loot included a $2.8 million apartment on the fashionable Rue de Lille near St. Germain-des-Pres, and a $70,000 Flemish tapestry. Investigators were also curious about more than $2 million in cash that moved into Dumas's bank account between 1991 and 1992. (The former foreign minister says he sold some of his art collection.)
Dumas has denied any personal wrongdoing. But in defending himself, he has all but confirmed the practice of "retro-commissions," as the kickbacks are known. He issued a statement saying that the commissions paid on the Taiwan frigate deal actually totaled an amazing $500 million (about 25 percent of the purchase price), and suggested he had seen a list naming the recipients. (Sources speculate that the list includes prominent personalities in Beijing, as well as in France and Taiwan.)
What intrigues observers--and provides the ticking-bomb aspect to the scandal--is whether it will stop with Dumas. If not, there's speculation it could widen to include other prominent political figures, such as associates of the former interior minister, Charles Pasqua, or even President Jacques Chirac. That, in turn, hinges on whether the two key players--Dumas and the Geneva fixer, Sirven--will talk to Joly.
The possible involvement of Pasqua's associates -- several of whom were allegedly on the payroll of Elf 's Swiss subsidiary, along with Deviers-Joncour -- is especially sensitive. He is France's version of Italy's former prime minister Giulio Andreotti--the man who knows all the secrets. Though Pasqua is no longer interior minister, he is said to maintain a network of loyal confidants in the French intelligence services, the police and other key agencies.
Although public attention in France continues to focus on Joly's investigation, the real hot seat may belong to President Chirac. He must decide soon whether to encourage an escalation of the judicial probe--and, figuratively speaking, bring down the pillars of the temple--or instead try to contain Joly's investigation.
Chirac has tried to reduce corruption since taking office three years ago--even though a separate judicial investigation into kickbacks and payoffs during his 17 years as mayor of Paris could eventually lead back to him. Soon after moving into the Elysee Palace, he sent emissaries to leading French companies and ordered them to stop paying large commissions overseas--and, more important, to stop kickbacks of these funds to France.
According to French newspaper reports, Chirac's anti-corruption policy was accompanied by tough moves against some of the leading commission agents. Several of these agents were hit with tax investigations after the authorities received anonymous letters detailing their offshore accounts. The French government also quietly torpedoed one prominent intermediary by asking his overseas contacts whether he was truly authorized to represent them.
Like any prominent politician, Chirac knows the system from the inside. He's said to detest it, personally. But some analysts argue that if he keeps pushing the anti-corruption campaign, he could get hit by a ricochet bullet.
Chirac, to his credit, sounded the anti-corruption theme again last month in a Bastille Day interview with French television. He said he had "put a lot of effort" into reducing "large-scale corruption from the big deals and major international contracts." He also disclosed that, when he took office, he had summoned his prime minister and defense minister to "give them extremely clear instructions in this area. . . . I told them: 'I don't want there to be any possibility of new scandals erupting like the ones talked about in various quarters of the world.'"
But the next day, the leading French newspapers ignored Chirac's comments on corruption. What they focused on, naturally enough, was what the president had to say about France's victorious soccer team.
With acknowledgment to Geoff Harris and The Washington Post