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Elf Corruption Trial Reaches French Courts

March 18, 2003

The biggest trial in postwar French history opens in Paris as 37 suspects face charges of profiting from corruption and illegal kickbacks in the early 1990s in conjunction with the French oil company Elf-Aquitaine.

The Leuna oil refinery has come under new scrutiny.Image: AP

After more than eight years of investigation, 37 defendants accused of having taken part in a worldwide net of corruption involving the former French oil giant Elf-Aquitaine went on trial on Monday in Paris.

The suspects, who include top French executives with close ties to the country’s political elite, are said to have been involved in misappropriating at least €183 million ($197 million) to use as bribes to secure Elf business contracts in Africa, South America, Russia, Spain and Germany between 1989 and 1993. Elf executives are also suspected of having embezzled some of the funds.

The trial is one of the first steps in revealing a system that allowed French governments to turn Elf into an extension of the country’s foreign-policy machine. At the time of the alleged misconduct, Elf was France's biggest company and was controlled by the state.

Loik Le Floch-Prigent
Loik Le Floch-PrigentImage: AP

Former Elf director general Loik Le Floch-Prigent, 59, (photo) and his one-time deputy, the 76-year-old Alfred Sirven, are believed to have played key roles in the scandal. Investigators suspect that the majority of the funds, €168 million, was transferred via Sirven's foreign bank accounts and slush funds, although investigators have been unable to locate all of the misappropriated millions.

Andre Tarallo
Andre TaralloImage: AP

André Tarallo (photo), known as Elf's Mr. Africa during the administration of President François Mitterrand, is also a defendant. The prosecution alleges Elf officials gave African politicians cash for every barrel of oil extracted in their operations.

Implications for Germany

Dieter HolzerImage: AP

German lobbyist Dieter Holzer (photo) is among the suspects because of his role in the sale of the former East German oil refinery Leuna to Elf in 1992. Sirven reportedly claimed that Elf paid Holzer some DM100 million ($51 million at today's rate) in commissions in the early 1990s, but that he had no idea what Holzer did with the money. Holzer has rejected allegations that some of it went to Christian Democratic Union politicians to approve the sale of Leuna, a publicly owned oil refinery.

But Elf middleman André Guelfi, who also faces charges in the trial, has told prosecutors that the millions were meant to "grease the political machinery in Germany."

Prelude in January

In January 2003, a court of appeals acquitted former French Foreign Minister Roland Dumas, 80, on charges of accepting funds embezzled from Elf. He had previously been sentenced to 212 years in prison and ordered to pay a fine of 1 million French francs (€152,000) for having profited from millions of euros in payments that his mistress, Christine Deviers-Joncour, received from the oil company. An appeals court overturned the decision on the grounds he was unaware the money had come from Elf.

Deviers-Joncour, who dubbed herself "the whore of the republic" in her first book, was sentenced to 30 months in prison for her role in the affair. The former lingerie model was employed by Sirven and drew a salary of millions, allegedly to make sure Dumas favored Elf.

Sirven, who kept Deviers-Joncour on the Elf payroll and orchestrated her activities, is now serving a three-year jail sentence. He was extradited from the Philippines in 2001 after being on the run for four years. Le Floch-Prigent is also serving a 30-month prison sentence, despite his denials that he was aware of Sirven's doings or of his former deputy’s arrangements with Deviers-Joncour.

Elf was privatized in 1994. In 2000, it became part of the multinational oil company TotalFinaElf, which has planned to change its name to Total. The company is now negotiating multi-billion dollar deals with Iraq.

A ruling is expected in July. If convicted, the suspects would face up to 10 years in prison.

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