French corruption: Elfs and dwarfs

Date: 15/11/03

The last verdict in the Elf trials

IF THERE was a sense of Déjà vu about the verdicts this week in France's Elf corruption trial, it is because investigations into the former state-owned oil company have creaked along for over nine years. But there was nothing humdrum in the judgment: five years behind bars for the top pair, Lok Le Floch-Prigent, boss of Elf in 1989-1993, and Alfred Sirven, his deputy; four for their ex-“Mr Africa”, Andre Tarallo; and prison sentences (some suspended) for 27 other accused, as well as combined fines of nearly €20m ($23m).

The case grew out of attempts to nail top figures for corruption at Elf under President François Mitterrand in the early 1990s. Most famously, Roland Dumas, a former foreign minister and head of France's constitutional council, was cleared on appeal. But the case against his former mistress, Christine Deviers-Joncour, whose book about the events was entitled “The Whore of the Republic”, was upheld. So were those against Mr Le Floch-Prigent and Mr Sirven, who are already in jail.

In the latest (and last) Elf case, the former businessmen were accused of operating and benefiting from slush funds to the combined tune of some €305m. At first, the trio insisted that they were operating an inherited systeme Elf, designed to further French oil policy and to benefit certain African leaders. Thus, the swanky Paris apartment that he acquired, insisted Mr Tarallo, was for the use of Gabon's president, Omar Bongo. A magnificent villa in Corsica was intended to house a “Franco-African foundation”.

By the end, however, such defences crumbled. Mr Sirven, who fled to the Philippines (and swallowed the chip in his mobile phone) before his arrest, turned on his former boss. He had spent over €100m on Mr Le Floch-Prigent's behalf, he said. This included such acquisitions as a sumptuous $9m house in Paris that Mr Le Floch-Prigent had termed a “business flat”. A picture emerged of an extraordinary world of bribery and personal profit, of jewellery and fur, villas and mistresses.

One conclusion from this case might be that all French corporate practices are irredeemably corrupt. Certainly, Elf is not alone in being investigated. Possible American criminal charges hang over Credit Lyonnais, a French bank, in relation to its purchase of Executive Life, an insurance company, in 1991. Official investigations are still going on into Jean-Marie Messier, former head of Vivendi, who steered the French media conglomerate to the edge of bankruptcy last year.

More plausibly, though, the Elf trial may show that French justice is at last getting to grips with corruption. Many recent cases relate to a former era. These include the trial of Alain Juppé, head of the ruling Union for a Popular Movement, and others over “ fictitious jobs” for party workers at the Paris town hall, in which a verdict is due in January. New party-financing rules are supposed to make such practices obsolete. At the least, French prosecutors are no longer shy of fingering top businessmen or politicians. With one big exception: the only figure protected from prosecution while in office is the man who was in charge of the town hall as mayor, President Jacques Chirac.

• Primary Source