Tuesday, December 22, 2009

1999: THE MITTERAND MYSTERY


I stored this subject, article, above/below, in my own files, online, for quite a long time, as you can see from the date.
Probably, however, not from 1999, but, soon thereafter, most likely.
And, I always meant to follow up on it and do more reading and research.
But, other events took precedence after 2001 and it languished in my files.
Finally, I thought I would resuscitate it with THE CAVEAT I HAVE NOT researched or read further and one report is not sufficient.
Nonetheless...
I could NOT find a link for this online, after many fruitless searches.
So, I reproduced the text entirely, instead.
One reason, amongst others, I chose to post, highlight, this now is the PATTERN it represents AND the fact, for example, Greek debt is now downgraded by international financial markets.
Many ways are utilized to COMPROMISE, squeeze, bring down, overturn, infiltrate any Socialist/Communist ELECTED government from the following to direct military intervention.
They have numerous, creative techniques to skin a cat.
By the way, if you believe the assertion below Citibank did NOT know what it was doing, than, you also believe in Santa Claus.
The Saudis, Citigroup's largest private shareholder, Saudi Prince Talal, Rockefeller and Exxon are interchangeable names, as well as NAZI and Fascism.
MY EMPHASIS, below, in BOLD and RED the points I thought most important.
IF you have further links, factual information, followup to add, both for my own and everyone else's edification and benefit, there is always the public comment section, below.
So...


February 7, 1999

THE MITTERRAND MYSTERY
Did François Mitterrand preside over the scandal of the century?
Tony Allen-Mills reports on an explosive affaire that France is afraid to investigate

"On the third anniversary last month of the death of François Mitterrand, a touching scene unfolded on a grey, chilly morning in a cemetery in southwestern France. 

Mazarine Pingeot, the illegitimate daughter of the late Socialist president, stood alone before her father's stone sepulchre at Jarnac, a few miles west of Angoulême. 
At her feet lay vast official wreaths dispatched from Paris by President Jacques Chirac and his prime minister Lionel Jospin.Mazarine carried a single red rose wrapped in Cellophane. 
After a few moments lost in thought, she placed her tribute and walked away. 
Her face, unknown to the French until the dying months of Mitterrand's 14-year reign, was solemn but composed
That evening Mazarine dined in Paris with the keepers of the Mitterrand flame. 

It has become an annual ritual. 
The veteran Socialist president's family and closest friends gather to toast his memory in one of his favourite oyster restaurants - L'Assiette on the Rue du Château. 
It is both a private and a public occasion: cameras are permitted, as if to prove to the world that whatever calumnies and scandals have scarred Mitterrand's posthumous reputation, there is still a loyal circle of friends determined to honour his name.
This year's dinner was especially poignant. 

At one end of a long table laden with bottles of robust country wine sat Danielle Mitterrand, the widow obliged to endure the most torrid public exposure of her late husband's sexual conquests. 
At the other end sat Mazarine. 
The child of a presidential mistress, she remains the object of intense fascination in a country that has only recently begun to realise the depths of deceit and betrayal that were plumbed during the Mitterrand era.
The evening ended with a kiss. 

Whatever Danielle may feel about her husband's extramarital past, she is not about to betray him in public. 
She embraced Mazarine, who is 24, as if she were her own daughter. 
It was a magnificent display of family solidarity, yet even as the bottles were being cleared away, the table was being set elsewhere for the mother of all Mitterrand scandals.
Within a week of the family dinner, Paris newspapers were reporting jaw-dropping allegations of a multi-billion-dollar fraud concerning a government loan allegedly negotiated with Saudi Arabia in 1983, two years after Mitterrand became president. 

It has become known as l'affaire Josephine and one of the few things that can be said about it with certainty is that, unlike many recent French political scandals, it does not involve a beautiful woman - Josephine is the name of the 18th-century bank salon where the deal was allegedly struck. It does involve, however, all manner of sleaze and murk.
It is alleged in the Josephine affair that French officials conspired to skim more than $1 billion in illicit "commissions" from a $25 billion loan supposedly negotiated with Saudi Arabia in 1983. 

The allegation has variously been dismissed as a CIA plot to destabilise France's Socialists, as a hoax by extreme rightwingers and as an attempted fraud by international conmen.
Not its least remarkable feature is that despite - or perhaps because of - the enormity of the alleged corruption involved, no judicial inquiry has ever attempted to establish what on earth happened.
In two crucial respects, the affair has confounded government attempts to ignore it, however. 

First is the determination of Jean Montaldo, a controversial investigative writer, to play the accuser. 
"They looted $1 billion," claims Montaldo. 
"It's the biggest political and financial heist in the history of humanity. You can't just pretend it didn't happen."
Second, the fallout from the scandal has engulfed a figure who had hitherto managed to steer clear of the sleaze-filled Mitterrand avalanche. 

Jacques Delors, the former president of the European commission, was France's finance minister at the time the Saudi loan is alleged to have been negotiated. 
Delors has publicly denied all knowledge of l'affaire Josephine, but that has not stopped the French media from rampant speculation.
According to a former official quoted in France-Soir, the Paris daily, Josephine may be the answer to one of the most puzzling questions of recent French political history: why did Delors, one of the most accomplished statesmen in Europe, never try to become president of France - a prize that many believe should have been easily within his grasp? 

Is there something in the Josephine file that confines him to the political shadows? 
Or is he the victim of a hoax?
Last week, Delors confirmed publicly for the first time that France had indeed negotiated a loan from Saudi Arabia, although he insisted that it was of $2 billion and not $25 billion. 

He also revealed to The Sunday Times that he had seen a document from the Josephine file purportedly bearing his signature. 
"The document is false and the signature is an imitation," he said.
FRANCE has long been resistant to Anglo-Saxon traditions of investigation and exposure: whenever a scandal threatens, the ruling elite closes ranks, particularly when there is a danger that the country's image may be damaged abroad. 

While a new breed of magistrate is attempting to wield a new broom, much of the legal and media establishment still takes its orders from the government.
Montaldo first mentioned the Josephine affair in a bestselling exposé provocatively entitled Mitterrand and the 40 Thieves. 

At the time, he tried to persuade the French authorities to investigate Josephine. 
Their response was comical.
"Picture this," he recounted, tucking into a grilled sole in a Paris hotel last week. 

"I walk with my lawyer into the office of the public prosecutor. 
I am carrying my black leather briefcase with gold locks. Inside is my Josephine file.
"My revelations are apocalyptic. I have bank documents, witness statements, photocopies, originals, affidavits, everything about the Saudi loan. I say to the prosecutor, this is what I am going to publish in my new book in 15 days' time. Here is the evidence for my allegations. I start to undo my locks. He turns white as a sheet, and says: 'Don't open that'."
Montaldo's lawyer insists that the prosecutor must read them. "My client is offering you this evidence spontaneously," the lawyer says. 

"Ah," replies the prosecutor. 
"But these things are excessively complex. We will read your book and advise you." 
That was in 1995. 
Montaldo is still waiting for the call.
As long as Montaldo was the only accuser, Josephine seemed likely to die with him. 

For all his investigative prowess, he has many enemies in the media. 
Some suspect him of links to the extreme right. 
Others claim he has a pathological hatred of Mitterrand as a result of some past slight to Montaldo's father, a former French colonial official in Algeria.
Many more scorn Montaldo's readiness to breach the taboo on politicians' private lives. 

In Mitterrand and the 40 Thieves, published two years before the president's death, he became the first writer to discuss publicly the existence of Mazarine and her mother, Anne Pingeot. 
He also delved into the network of rancid cronyism around Mitterrand's closest friend, Roger-Patrice Pelat, who died of a heart attack while awaiting trial on corruption charges.
These revelations turned Montaldo into one of France's fastest selling authors. 

He is a short, dapper figure with the bearing of a retired tank commander. 
When he was recognised at our lunch by a television producer, she came up to me and said: 
"You're lucky to be talking to him. He's crazy - but great."
It was not until last month, when Montaldo appeared in court accused of defamation, that the French media began to take notice of Josephine and this story of the bleak early days of the Mitterrand government began to emerge.
It would be difficult to overstate the enormity of the task facing Delors when he took over as finance minister in 1981. 
Mitterrand's election victory over Valéry Giscard d'Estaing had stunned the financial markets. 
After decades of Gaullist hegemony, the Socialists had scrambled into power and taken the Communist party with them. 
The cold war was still very much alive and suddenly there were Communist government ministers in Paris. 
There was an immediate run on the franc as the wealthy poured their funds abroad. 
Mitterrand set about nationalising companies with a vengeance. 
The International Monetary Fund began issuing alarms about France's national debt. 
The economy tottered towards bankruptcy. 
Delors seemed to be presiding over a debacle.
Reports of a Saudi Arabian bail-out loan began circulating in the Paris media in 1984. 

Delors had come under fire for understating the extent of France's foreign debts and a parliamentary inquiry was launched to establish the true position. 
According to one report from the time, Delors had been arranging short-term loans to cover repayments of long-term debts. 
Asked about the Saudi loan, the finance ministry refused all comment but at least two instalments of $2 billion were reported to have been received.
The Sunday Times has obtained a photocopy of a purported affidavit sworn at the American embassy in London on October 24, 1983. 

It bears the signature and seal of Janet L Bogue, vice-consul, and appears to be one of the keys to the Josephine affair. 
According to this affidavit, France had decided in the summer of 1982 to obtain "a private placement of funds". 
This had to be done discreetly and not in the name of the French government, "as the loan would not be recorded through the IMF".
A series of meetings was eventually held at the Mayfair offices of Peter T James and Co, a London firm of solicitors, according to the affidavit. 

Alan Lowe, then a senior lawyer at the firm, presided over the meetings, it states. 
On at least one of these occasions, on April 25, 1983, Delors was allegedly present while the terms of the loan were agreed. 
According to the affidavit, a Saudi Arabian trust would provide an unspecified loan that would be "drawn down in increments of $2 billion on a weekly basis". 
The money was to be delivered through the London branch of Citibank. 
There is no suggestion that the bank or any of the English lawyers named was aware of any illegality or corruption.
So far, so straightforward - except for one detail. 

The affidavit was sworn by a group of American businessmen, acting for companies and offshore trusts in the Cayman Islands, who claimed to have been cheated out of their commission on the deal. 
Commission? 
On a government loan? 
It was one thing to suggest that France's Socialist government might be resorting to unorthodox means to shore up its beleaguered budget; quite another to suggest that a slice of the proceeds was being skimmed off the top.
Yet if the affidavit is a forgery, someone has gone to enormous trouble to create a convincing tale. 

Peter T James and Co, which also has offices in Saudi Arabia and Washington, confirmed last week that an Alan Lowe had worked for it in 1983. 
He had left to start his own firm and he continues to work in London, but he did not respond last week to requests for an interview. 
The American embassy confirmed that it offers affidavit services to businessmen with grievances, but it could not provide 15-year-old records.
Then there is the awkward matter of Delors. 

Responding last week to a list of questions put to him by The Sunday Times, he denied that he had been present for any negotiations in London. 
"I don't know this Peter James firm," he said.
For the first time, however, he publicly acknowledged that France had negotiated a $2 billion loan from Saudi Arabian funds. 

"It is true that this loan was negotiated at the end of 1982 or the beginning of 1983," he said. 
"It was a difficult time for the French economy. But I have checked with my officials at the time, in case my own memory is faulty. No commissions were paid. And all my collaborators confirmed that they had never heard of the people mentioned in this affair."
Delors recalled that the government was approached at the time by a number of intermediaries offering to provide funds. "We refused many offers," he said. 

The government concluded only two official agreements - the Saudi Arabian loan and another through the European Community.
Was it possible that Delors might have been unaware of subsequent manipulations that, according to Montaldo's files, raised the interest rate on the Saudi loan, thereby increasing the amount of repayments and providing a margin for illicit commissions? 

"Nobody accepts that," he said. 
"A member of the Elysée Palace staff told me they recognised that all the documents [in the Josephine affair] were false."
Delors insisted he had no idea who might be behind this apparent attempt to smear him. 

As for why he has resisted calls to run for president of France, he said: "I've been working for 55 years. I'm tired."
So where does all this leave Montaldo? 

In the middle of a thickening plot.
IN May 1996, there was a devastating fire at the Paris headquarters of Crédit Lyonnais, the scandal-plagued bank that had run up so many debts through fraud and reckless management - the bill to the French taxpayer may eventually top $30 billion - that it became known as Debit Lyonnais.
The fire all but destroyed a wing of the bank on the Rue du 4 Septembre. 

Among the files that burnt were all those relating to the bank's international affairs. 
Investigators would later establish that the cause of the blaze was arson.
Montaldo could not resist it. 

He had already publicly identified Crédit Lyonnais as the bank that had managed the juggling of interest rates which allegedly sliced the icing off the Saudi Arabian loan. 
Although the bank had formally denied all knowledge of the Josephine affair, Montaldo suggested in Le Point magazine last year that the fire had been arranged to destroy the Josephine records filed in the Crédit Lyonnais archives. 
The bank promptly sued for defamation.
This time Montaldo did not fight alone.

From the shadows of the French secret service stepped a figure called Bernard Pichon. 
He claimed to have carried out the parliamentary investigation in 1984 into the French foreign debt, and he was keeping the records in a battered blue cardboard file secured with an old rubber band.
The two men exchanged files, and Montaldo was astonished. "I remember his stuff as if by heart," he said. 

"It confirmed everything I had suspected and went further."
When Pichon attempted to present his blue file as evidence during Montaldo's defamation hearing last month, however, the judge would not let him open it. 

"The tribunal wants no incidents," the judge said.
Last week Pichon sat in the corner of a Paris bar, chain-smoking filtered Chesterfield cigarettes and looking every inch what the French call a barbouze - a government security agent - and revealed what was in the file. 

A loyal Socialist, Pichon had, according to his own account, been based in the French Caribbean, dabbling in real estate and writing occasional reports for the French secret service, before returning to Paris to assist with Mitterrand's presidential campaign. 
He was later summoned by the president of the national assembly's finance committee and asked to investigate reports of a Saudi Arabian loan that did not appear in the finance ministry's accounts. 
The paper trail took him to Texas, London and Switzerland, via the Cayman Islands and Lebanon. 
Pichon claims to have spent six months tracking bank transfers and calling on old secret service contacts for details of private accounts. 
His version of the Josephine affair differs in details from Montaldo's, but not in substance. 
By manipulating interest rates, he claims, some of those involved in the Saudi loan made off with hundreds of millions of dollars.
As we talked, Pichon repeatedly delved in his blue file for papers to support his argument. 

He showed memos that indicated a $25 billion Saudi loan originally financed at an 8.0830% rate of interest, which should have yielded repayments over 20 years of $40,415,150,000. 
Then the rate was raised to 9.5367%, yielding $42,915,150,000. 
The difference of $2.5 billion provided a handsome surplus from which the middlemen were to take their cut.
Pichon claimed to have identified at least $700m in "commissions" that were subtracted from the first installments of the loan. 

The affair might never have come to light, he said, had the French side not become greedy and failed to pay the American intermediaries the share they had agreed.
Much of Pichon's material was photocopied and therefore unverifiable. 

Some of the headings on letters purporting to come from Cayman Islands companies looked distinctly fake. 
Several documents written in English - notably the affidavit - were riddled with spelling mistakes. 
At the same time, however, other documents appeared genuine.
Whether or not this affair is a Byzantine invention by a sinister genius, it seemed incredible that the first person apart from Montaldo or Pichon to be examining the mountain of evidence should be a British reporter and not a detective from the French ministry of justice.
Suppose for a moment that the Josephine affair is the work of forgers and conmen. 

If that is the case, then a number of crimes have evidently been committed. 
The victims include Mitterrand, Delors, Pierre Mauroy, the former Socialist prime minister, and Roland Dumas, the former foreign minister. 
Add to the injured list the American embassy in London and sundry British solicitors and bankers, all of whom appear in Montaldo's and Pichon's files, and the question might fairly be asked: why isn't someone investigating the truth of the Josephine affair?
"In France we lack a tradition of l'auto-critique (self-criticism)," said Pichon as he lit up another Chesterfield. 

He settled back in his chair and blew out a cloud of smoke. "There is a new generation of magistrates and even journalists who are starting to change things. 
But this internal revolution still needs a little time to acquire critical mass." 
For France's European partners, this reluctance to address past sins remains acutely worrying as a new era approaches of financial and political harmonisation.
British confidence in the euro will scarcely be enhanced if Paris continues to give the impression that big international transactions are subject to a 10% rake-off by les commissionaires - the officials who take their commissions.
One problem with getting to the bottom of these scandals is the French accent on an elite cadre of professional administrators who are trained to progress smoothly from government to business and back again. 

They are experts at governing France, but when trouble starts their first move is to pull down the shutters.
Another problem - perhaps the only one that really matters - is the brooding enigma of Mitterrand himself. 

He arrived in power in 1981, committed to la force tranquille - the virile Socialist reforms that would ease France away from its post-war Gaullist malaise. 
By the time he departed in 1995, stricken with prostate cancer, there was little Socialism left in the Mitterrand regime. 
He had become a remote, regal figure surrounded by fawning courtiers. 
The satirical press nicknamed him Dieu. 
The Elysée Palace became known as le château.
Rumours about Mitterrand's Swiss bank accounts dogged most of his career. 

During his failed 1974 presidential campaign, Paris journalists were sent anonymous documents identifying the Swiss banker who allegedly controlled Mitterrand's private fortune. The banker, Jean-Pierre François, would later become a regular visitor to the Elysée Palace.
Yet Mitterrand always presented himself publicly as a man of simple tastes, who preferred the neighbourhood bistro to three-star restaurants. 

For holidays he would retire to his cottage near Bordeaux, where he would take his labradors truffle-hunting. 
He repeatedly expressed contempt for money. 
What possible use could such a man have for several hundred million dollars supposedly skimmed from a loan?
Montaldo and Pichon assert that the primary aim of the Josephine affair was not so much to line Mitterrand's pockets but to provide his Socialist party with a solid financial base. Most of the big financial scandals of the past 20 years in France have been linked to party funding, on the left and the right.
In the Josephine case, it is impossible to be specific about the ultimate beneficiaries of the funds that Pichon claims to have traced to a variety of Swiss accounts. 

He alleges that, in addition to Socialist party funding, there were significant payoffs to a number of government officials at the time.
Delors's position is clear: "During my time as minister of finance I never heard of this operation." 

The president, however, was not who he pretended to be. The family man with country tastes kept his mistress in a handsome government flat on the Quai Branly and retired with her for pleasant weekends at the Château Souzy-la-Briche, a presidential property expensively renovated for his private use.
Of his supposed Swiss accounts there is, not surprisingly, little trace, but one investigating magistrate has recorded a remarkable statement from a company finance director who was giving evidence to an inquiry into one of Pelat's companies, Vibrachoc, which was sold to the state for a vastly inflated price. 

The director recalled that he had once arranged a small transfer of funds "to a bank in Lausanne for Monsieur François Mitterrand".
Years later at a dinner in London, a retired diplomat reminiscing about a European summit recalled an occasion when Mitterrand had intervened unexpectedly in a debate about tax harmonisation and the problems posed by Switzerland, Liechtenstein and other tax havens. 

A French ambassador later confided that his president was worried that the path to his own funds might be blocked.
It would not be hard to imagine that Mitterrand took certain measures to provide for his two families - there have even been rumours of a third. 

At the same time, it must be said that neither his widow nor his daughter shows much sign of living high on the hog. Danielle was recently reduced to auctioning off tacky presidential memorabilia to raise funds for the charity she runs; Mazarine prefers woolly sweaters and anoraks to Parisian haute couture.
Perhaps more serious than the question of personal corruption is the atmosphere of decadence that Mitterrand allowed to permeate his government.

Repeatedly warned by his advisers that he was surrounding himself with "bandits", Mitterrand stuck by his friends, even when, in the notorious case of René Bousquet, the Nazi-era collaborator, they were tainted by allegations of mass murder.
Whatever the reality of the Josephine affair, it now seems clear that France is in serious need of a government committed at least to the idea of public transparency - the notion, still so foreign in Paris, that the people should actually know what its elected representatives are up to. 
It also needs an aggressive media prepared to root out corruption. 
Instead, it has Montaldo."
1999 Times Newspapers Ltd.

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