• English Site
• >Business
• >

  The French Connection: Did Alstom Bribe like Siemens?

The French Connection Did Alstom Bribe like Siemens?

By Jürgen Dahlkamp, Jörg Schmitt and Stefan Simons

Part 2: Making it Easy for Alstom to Keep a Low Profile

As well-concealed as this French Connection was, the files investigators seized from Holenweger's secretary included such informative notes as one from the fall of 1997, in which a company employee, without taking the usual precautions, wrote that an electricity deal in the Brazilian state of São Paulo had been worked out with a "former secretary of the governor" and covered the following: "party funding, the auditors and the energy office." The author also wrote that the identity of the middleman was to remain secret. Even the name of the Alstom's chairman of many years, Pierre Bilger, appears in the letter. Apparently the author was unwilling to take action without his approval.

The elaborate payment system put in place in 2000 is also described in the documents. By that time, investigators believe, there were no longer any pseudo consultancy agreements coming directly from Alstom. Instead, Holenweger's companies apparently got their money from the next letterbox firm. But, as investigators believe, Alstom was also behind that company. In the end, it is believed that a large sum of money was accumulated in Hong Kong, in a slush fund, which investigators believe belongs to the company. Millions from Crofthill Consulting, in which the Liechtenstein bank had shown such a strong interest, also ended up by chance in the Hong Kong fund.

Ernst Roduner, the Swiss investigative judge assigned to the case, plans to conclude his investigation this year. Holenweger's attorney has declined to comment on the accusations. But when questioned by French investigators, two Alstom consultants with the authority to sign documents for a letterbox company confirmed that there was indeed a "caisse noire," or black fund, for useful expenditures. The company is believed to have regularly pumped Alstom funds into Holenweger's system.

This sort of news isn't the kind that causes an uproar in France. In fact, it has the opposite effect. On Tuesday of last week, at a company meeting under the glass pyramid at the Louvre, Alstom CEO Patrick Kron basked in the glow of the multinational concern's results, while shareholders were thrilled by the promise of nine-percent profits. Corruption? Not an issue.

Alstom's lucky stroke: The company isn't listed on the US stock exchange. Otherwise it, like Siemens, would be subject to intense scrutiny by the especially stringent SEC regulators. Nevertheless, it still faces the scrutiny of Renaud van Ruymbeke -- the judge in France assigned to the case there -- who is considered to be a tough-as-nails investigator. Still, the French press has run little more than a brief mention of the fact that one of the Alstom consultants who was authorized to sign documents at one of the letterbox companies is now under investigation.

This is hardly surprising. It was Nicolas Sarkozy, the current president, in his former role as economics and finance minister, who almost single-handedly saved the company from looming bankruptcy with an €800 million ($1.24 billion) financial bailout package. This is why any criticism of Alstom is quickly interpreted as practically treasonous, if not lèse-majesté. Elysée Palace, the French White House, doesn't even have to intervene directly to keep Alstom out of the headlines. The French media, partially owned by Sarkozy's friends, Martin Bouygues (private television broadcaster TF1), Bernard Arnault (financial daily Les Echos), Serge Dassault (daily Le Figaro) and Arnaud Lagardère (weekly magazine Paris Match), are clearly keeping watch to make sure that the president's hands-on manager image is not questioned excessively.

All of this makes it easy for the company to keep a low profile. Alstom CEO Kron brushes the matter aside, calling it "old affairs, of which I know nothing." A company spokesman calls the charges "hypotheses and speculation," and insists that they only affect "individuals who left Alstom long ago." One of them, former CEO Bilger, also refuses to comment on the subject.

Besides, didn't Alstom file a complaint against the investigation in mid-May, supposedly out of concern for its good reputation? But perhaps the real issue is to gain access to the files. Either way, the company will remain on its toes for as long as the follow-up investigation continues.