France Struggles With Scandal Even as It Tries to Clean Up Politics

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GERARD JULIEN / AFP / Getty Images

Bernard Tapie, former president of the soccer club Olympique de Marseille, in the French city of Marseille on May 26, 2013

Over the past three decades, Bernard Tapie has periodically hit the headlines in France in roles ranging from working-class hero to capitalist villain. A self-made businessman with a square jaw and sharp tongue, Tapie was already a national figure in 1992 when President François Mitterrand made him a government minister. Three years later he was in disgrace, stripped of political office and jailed for several months after being convicted of rigging a soccer match involving the Marseille club he owned.

Tapie, 70, is in the headlines once again, and as usual, he has come to personify a French obsession. This time, it’s not about sport or class or political swagger, but about the internal workings of government, and in particular the clubby and opaque nature of decisionmaking at the highest echelons of the state.

At issue is a 2008 arbitration proceeding that awarded Tapie €403 million ($526 million) in compensation for a dispute with the former state-owned bank Crédit Lyonnais. Prosecutors say the arbitration was rigged against the state and in Tapie’s favor and have brought fraud charges against a number of those allegedly involved, including Stéphane Richard, the current CEO of France Télécom. At the time, Richard was the chief of staff of Finance Minister Christine Lagarde, the current managing director of the International Monetary Fund. (Lagarde has been questioned in connection with the case but not charged; Richard denies wrongdoing.)

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Tapie himself was released from custody on June 28 after four grueling days of questioning by magistrates. He was formally charged with fraud later in the day. He had collapsed on the first day of questioning and spent the week giving depositions from a bed in the Hôtel Dieu hospital near the Palace of Justice. He has defended himself vigorously, going so far as to publish a book on June 27, which is a lengthy description of his version of events — and strenuous denial of any wrongdoing. “No, I didn’t steal the money that was attributed to me! No, I didn’t receive any beneficial treatment!” he writes.

This new Tapie affair is taking place at a time when several other long-running political-corruption scandals are reaching a climax, and just as the government of President François Hollande is putting in place a slew of legislative measures designed to clean up public life. Among other changes: creating a new government agency that will oversee matters of political transparency, monitoring and vetting members of Parliament and other elected officials who will be required to submit declarations of their assets. However, after a revolt by members of Parliament on June 25, these declarations will not be made public; they will only be accessible to the staff of the new agency, a change of plan that has been roundly criticized, including by Transparency International. The legislation still needs to pass the French Senate.

France has lagged behind many other European countries and the U.S. in its efforts to control conflicts of interest and shine a public light on political dealings. While the nation has an array of penalties for criminal wrongdoing of politicians and civil servants, it has so far paid less attention to prevention of conflicts, according to a 2010 government commission that suggested a number of remedies that form the core provisions of the new legislation. But France is also different from many other countries in that the top echelons of government and business are dominated by graduates of just two prestigious but very small graduate colleges, the École Polytechnique and the École Nationale d’Administration, both of which were set up to educate the nation’s ruling elite. Fewer than 500 young men and women graduate from these two schools each year, but they go on to hold many of the top positions in both government and the business world. Already back in the 1960s, an American business professor, David Granick, noted in a comparative study the “amazing” degree to which old school ties played a determining role in French society. The result is a series of closed networks that tend to make government decisions relatively opaque.

Richard of France Télécom is a product of this system, as are several of those implicated in one of the other long-running party-financing scandals, involving a Lebanese businessman, Ziad Takieddine, who confessed to prosecutors that he illegally funded the presidential campaign of former Prime Minister Édouard Balladur in 1995 using kickbacks from arms contracts he had helped to negotiate with Saudi Arabia and Pakistan, according to testimony published by Le Monde on June 26.

Tapie himself frequently rails against this system, positioning himself as the little guy taking on the entrenched powers, a sort of latter-day Robin Hood, French-style. “I was robbed by the ‘big guys,’ the rich and the powerful, and in the end I made them pay back,” he writes in his book, Un Scandale d’Etat, Oui! Mais Pas Celui Qu’ils Vous Racontent (Yes, It’s a State Scandal, but Not the One They’re Telling You).

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The controversy is an old one, dating back to 1983 when Tapie sold Adidas, the sportswear manufacturer, to Crédit Lyonnais. Tapie alleges that Crédit Lyonnais tricked him over the price and then went on to sell Adidas to another buyer for twice what it paid him. That version of events is strongly contested by former senior Crédit Lyonnais officials, including Jean Peyrelevade, who was chairman of the bank from 1993 to 2003. According to widespread leaks in the French press, prosecutors have been focusing on why the case went to arbitration at all and whether that arbitration was rigged. Peyrelevade, for one, has characterized the arbitration proceedings as “a gigantic manipulation.” Tapie writes in his book that he believes the ulterior motive of the critics of the arbitration is political, an attempt to attack Nicolas Sarkozy, who was then President and who met with Tapie on several occasions at the time. Tapie started his political career on the left but switched allegiance to Sarkozy in 2007, and remains loyal to him.

Whatever the outcome of the case, the Tapie affair has brought to light a number of apparent anomalies. Several of the participants in the arbitration hearing who were supposed to be neutral turned out to have had some prior relationship to Tapie that they allegedly didn’t declare. They include Pierre Estoup, the principal arbitrator, who has been charged with fraud.

It remains to be seen how long it will take for the Tapie case to come to trial. One thing is certain: the combative entrepreneur is a street fighter who is still scrapping for a fight, even from his hospital bed. The bigger question is whether the long drawn-out affair will help push French politics into a more transparent future.

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4 comments
lucio
lucio

Não há país e não há continente onde a história não se repete: toda vez que se elegem governantes, abrem-se as portas do Tesouro Nacional aos mais diversos grupos de criminosos. Esse é o grande motivo da crise na Europa; não é possível sem a ação de assaltantes de casaca, que em países de sociedade estável, se mergulhe em crises financeiras profundas: França e Itália, por exemplo, recebem remessas de lucros de suas empresas espalhadas pelo mundo, que por si só, garantiriam suas estabilidades financeiras.  

Atualmente a atividade política deve ser sempre analisada como atividade umbilicalmente ligada ao crime organizado, indistintamente do país.

LooseBooth
LooseBooth

The French govt has been corrupt since Charlemagne passed. When USA began its drug wars, France attacked anti-drug groups. It persecutes groups who want to set up *secular* anti-drug education in schools. There's big drug money coming into the French government's pockets. Their legislators' consistently oppressive actions against reform prove it. 

Jaguar6cy
Jaguar6cy

Government is the font of fraud, corruption and abuse.  The is why so many are attracted to "public service".  Vast quantities of available tax revenue make the pickings very attractive and available.  Yet many fools still vote for more government.

WilfTarquin
WilfTarquin

Well, it's only countries which try to keep their politics clean which have scandals. The more you look for them the more you tend to find.

There's no scandals, only palace intrigues, in countries where corruption is accepted, like China and Russia.