Elf, oiling the wheels of corruption

29th July 2003, Comments 0 comments

The 'Elf trial' has begun revealing how the French oil giant was used as a multi-million euro cash-cow for personal gain and murky political deals - and there's much more to come. Hugh Schofield reports.

Just a month into one of France's biggest ever corruption trials, an avid public has gorged on a rich diet of African bribes, political skulduggery and sensational divorce — all paid for from the illicit millions of the formerly state-owned oil company Elf.

Days of cross-questioning of defendants and witnesses at the criminal court in Paris have provided a feast of insights into the extraordinary profligacy practiced in the early 1990s at the top of one of the country's biggest enterprises — with the knowledge and collusion of the political elite.

Elf's former president, 59 year-old Loik Le Floch-Prigent, explained in painstaking detail how he won the approval of the late Socialist president François Mitterrand to use the equivalent of EUR 5 million (USD 5.45 million) of company money to pay for his divorce.

Realising in 1991 that he could no longer live with his wife Fatima Belaid — who he believed possessed a number of sensitive secrets about the conduct of Elf affairs — Le Floch-Prigent went to see his political patron at the Elysée palace.

"I told (Mitterrand), 'I am probably going to divorce my wife and that could have repercussions given her character. We made a lot of trips to Africa together and the collateral damage could be significant for the country and Elf,'" he told the court on Tuesday.

Mitterrand then refused his offer to resign and instead told him, "You must sort out the problem" which Le Floch-Prigent took as authority to buy his wife's silence with Elf cash.

The story was revealing of the climate of easy money at the then publicly-owned company, which after eight years of investigations and the accumulation of 250 volumes of evidence is now at the centre of a mammoth four-month trial featuring a total of 37 accused.

At the heart of the case is the charge that Le Floch-Prigent and two other top executives Alfred Sirven, 76, and André Tarallo, 75, creamed off millions of euros for themselves from the secret accounts that Elf ran in Switzerland and elsewhere for the purpose of buying influence and contracts.

But the evidence used to substantiate this has itself shed light on practices which at the time — just 10 years ago — were apparently regarded as acceptable by French governments of all hues and continued till Elf's privatisation in 1994. It is now part of TotalFinaElf.

Chief among these was the bribery of African leaders in order to exploit oil-fields and extend French influence on the continent.

Tarallo - who was known as Elf's Mr Africa because of his contacts there - has told the court that he was asked by President Omar Bongo of Gabon to put money into Swiss accounts as an insurance policy against his possible fall from power.

Sirven has also admitted enriching himself from accounts he set up on behalf of the former president of Congo, Pascal Lissouba. However both African leaders have denied the allegations and neither has been asked to appear before the court.

The court has also heard from Le Floch-Prigent and Sirven confirmation of long-standing rumours that money from the secret acounts financed French political parties as well as candidates for the presidency.

Sirven said that he himself "took personal charge of things of this nature," and Le Floch-Prigent said that, when he took over as Elf president in 1989, he was asked by Mitterrand to "balance things out" so that the Socialists benefitted as well as the Gaullists of France's current president Jacques Chirac.

Mitterrand's foreign minister Roland Dumas, who was himself acquitted in a related corruption trial, said Elf had become a "cash-cow. Its capital was used to reward African heads of state, but also - one thing leading to another - to bail out certain empty coffers."

Apart from the three main accused, the other 34 are Elf executives and private intermediaries who are alleged to have arranged pay-offs around the world and helped hide the funds in secret accounts in Switzerland, Luxembourg and other tax havens.

The trial is due to last until July, with a verdict expected towards the end of the year.

See also: Elf: no place for pixies

April 2003


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