By Hector IgbikiowuboVanguard
November 18, 2003
France's mammoth Elf corruption case, probably the biggest political and corporate sleaze scandal to hit a western democracy since World War II, closed last Wednesday as three key former executives of the oil giant were jailed for up to five years over corrupt practices in Africa. Elf's former chairman, Loik Le Floch-Prigent, 60, was sentenced to five years in jail and fined 375,000 euros (US$375,000); his principal bag-man, the former director Alfred Sirven, was given the same prison term and ordered to pay 1 million euros. The company's "Mr Africa," Andre Tarallo, was jailed for four years and fined 2 million euros. The judge, Michel Desplan, said Le Floch bore "the primary responsibility" for the Elf affair and was "personally behind a majority of the misappropriations". To Sirven, he said: "All this would not have happened without Le Floch, but it could not have existed without your help." The three were among 37 defendants on trial for illegally siphoning off an extraordinary 350 million euros of the then state-owned company's funds, from 1989 to 1993, while Le Floch was chairman.
The never-ending stream of cash was used to buy political favours at home and abroad, and to fund some extravagant lifestyles. But the four-month trial, which had France riveted with its tales of political graft and sumptuous living, was also that of a system of state-sanctioned sleaze that flourished in France for years: Successive politicians saw the country's state-owned multinationals not just as undercover foreign policy tools, but as a convenient source of cash to keep friends happy and enemies quiet. Le Floch, whose lawyer said yesterday his client would not be appealing to the court, insisted throughout his trial that he was in "daily contact" with the Elysee palace, and that "all the presidents of France" had known of, and condoned, the company's illicit dealings. Elf, now privatized and part of the Total group, paid "at the very least" 5 million euros a year to all of the main French political parties to buy their support, Le Floch told the court at one stage. Most of the money went to the centre-right RPR party founded by the present president, Jacques Chirac, until the socialist Francois Mitterrand, soon after his presidential election in 1982, demanded that the spoils be evenly spread. In their 1,045-page indictment and a further 44,000 pages of documents, the investigating magistrates described in detail "a large number of operations carried out on the margins of normal functioning of the group's structures, and destined to collect assets off the books."
In addition to jail terms totaling 60 years, the public prosecutors sought a record 34.5 million euros in fines against the 37 defendants, who included business associates of the company and executives' relatives accused of having benefited from the illegal largesse. Among those sentenced was Le Floch's former wife, Fatima Belaid, found guilty of receiving 4.6 million euros from Elf in exchange for her silence over the company's underhand dealings after the couple agreed to divorce. She was sentenced to three years in prison, of which two were suspended, and fined 1 million euros. Many of the missing millions were paid out in illegal "royalties" to various African leaders and their families. Tarallo told the court that annual cash transfers totaling about US$16.7 million were made to Gabon's President Omar Bongo, while other huge sums were paid to leaders in Angola, Cameroun and Congo-Brazzaville. The payments were partly aimed at guaranteeing that it was Elf and not US or British firms that pumped the oil, but also to ensure the African leaders' allegiance to France. In Gabon, Elf was a veritable state within a state. France accounts for three-quarters of foreign investment in Gabon, and Gabon sometimes provided 75 percent of Elf's profits. In return for protection and sweeteners from Elf, France used the state as a base for military and espionage activities in west Africa.
More Information on Corruption and Money Laundering - Regions
More Information on Corporate Crisis
More Information on Transnational Corporations
FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C Â§ 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.