The American Trap, page 14
This is how Patrick Kron decides to protect Alstom’s interests?
Let him see it through, let him schedule an appointment with the DOJ prosecutors and admit Alstom’s misconduct, and acknowledge that this entire scheme was contrived to conceal the payment of bribes by disguising them as consultant contracts for the Tarahan project and numerous other cases. Let him admit Alstom’s liability, and offer to resign. This would be the best proof of his cooperation and would probably get Alstom a lower fine as well as help the company to find its way out of the abyss. Would he sacrifice his own skin? No. Rather than put his own career on the line, Patrick Kron cowardly chose to pin it on one of his subordinates.
Chapter 26
The six months go by
‘Dad, when are you coming home?’
I have avoided answering this question up to now by telling Gabriella and Raphaella that I couldn’t give them a date. My ‘work’ in the United States was taking longer than I expected . . . However, as we enter October, I feel confident enough to tell them that I will soon be back and that we will be able to spend Christmas together. I’m heavily misguided.
As it happens, Bill Pomponi is holding out. He refuses to plead guilty. As he is an American citizen, the judges have released him, giving him time and space to prepare his defence. If what the prosecutors say is true, after my guilty plea Pomponi has little or nothing left to negotiate. He therefore risks a hefty prison sentence of at least ten years. For an elderly person in poor physical health, this almost equates to a death sentence. He therefore has a vested interest in delaying the procedure. I can understand this.
At the same time, his legal strategy will have a major impact on my fate. As long as Pomponi resists them, the prosecutors won’t let me be sentenced. The reason being that if Pomponi goes to trial, they will want me to testify against him. They must therefore keep me within their sight and not let me return to France. I am again faced with this fiendish mechanism, despite trying to seek an alternative with my lawyer.
‘And if I refuse? I still have the right to be sentenced within three months of my guilty plea, don’t I?’
‘Absolutely, it’s up to you. But if you persist in pinning them to this date, the prosecution will shoot you down in flames at your sentencing hearing and request ten years, instead of six months.’
‘So what should we do? We ask for my release on bail, I return to Singapore, and await a sentencing date that suits the prosecutors?’
‘They will not let you return to Singapore. You will have to be kept on parole in the United States.’
This is an almighty blow. It could go on for months. My fate depends on what Pomponi decides. I must contain my fury as I’m powerless. I must accept that my hearing will be deferred. When I break the news to Clara, she is devastated, but at least the family can come to the United States for Christmas and we will have a fortnight together. She starts searching for an apartment for me to stay in once I am released on bail.
Two days later, I get a visit from Stan at Wyatt. I immediately sense his irritation.
‘I have some very bad news. Not only are the prosecutors postponing your sentencing hearing but they now also object to your bail application.’
‘What? It’s been exactly six months. That’s the agreement you made with Novick.’
‘I am furious myself. We don’t do that here in Connecticut, where this type of verbal agreement normally underlies the relationship of trust between lawyers and prosecutors.’
‘But Stan, I don’t care about what’s done or not done in Connecticut.’
‘Novick told me that the orders had been issued from Washington, from Kahn.’
‘Yes, but you knew that from the outset.’
‘I agree and I apologize. This is the first time I have encountered such a situation.’
‘What do they want?’
‘They now want you to stay locked up at Wyatt between six and ten months.’
‘Why between six and ten months? What’s behind the figure of ten months?’
‘I have no idea. Neither Novick nor Kahn, whom I of course phoned, wanted to elaborate. But something is brewing.’
‘What do you think it is?’
‘It can only be linked to Alstom, but I don’t know what.’
I have been tricked by them once again, just as I was starting to see light at the end of the tunnel. This is a huge disappointment and is extremely hard to bear, especially for Clara and the children. I cling to the hope that I could be released any time between these six and ten months, though mentally I must prepare myself for the worst. Another four months in this hell hole of Wyatt. I frantically resume my studies of all the FCPA cases of previously indicted companies and individuals to find out how they fared. Juliette or Clara send me all the missing documents. I become obsessed by the FCPA.
I desperately try to figure out what the prosecutors’ game is. I’m merely a pawn in their chess battle against Alstom. Yet I am somewhat mystified by the extreme nature of their wrath. The war they are waging against Alstom seems to surpass a mere desire to punish the company. They seem to be driven by a moral duty, an almost divine mission to stamp out corruption on a global scale.
Or . . . is it something else I am unaware of?
In late 2013, besides its legal problems, Alstom goes through a difficult period. Something I learn from reading Le Figaro, to which my father subscribed me. Clara also regularly sends me press clippings on the company. By the time I get to read them, they are two weeks out of date, but this is of no consequence to me because at Wyatt I have all the time in the world.
I discovered on 6 November 2013, a week late, that Patrick Kron had announced 1,300 job cuts, mainly in Europe, including around a hundred in France. This decision doesn’t really surprise me. In the past year, alarm bells have been ringing; the group has been hit by the global economic slowdown. European countries have not yet emerged from the financial crisis, and growth has been less than expected in developing countries. The outcome was a 22 per cent drop in orders for Alstom compared to September 2012. Furthermore, the company failed to obtain some key contracts. Eurostar chose Siemens to manufacture its new trains and Alstom was pipped at the post by Canadian Bombardier to produce new rolling stock in the Île-de-France region. SNCF the French state-owned railway operator, deemed Alstom way too expensive. In addition, in the energy sector, sales of our gas turbines were down.
Admittedly, the fundamentals were still very good: the group enjoyed the greatest nuclear expertise in the world. It was ranked number one for the supply and maintenance of turnkey power plants and equipped approximately 25 per cent of the world’s nuclear installed base. The company was also a world leader in the production of hydroelectric power.
However, though the group was a long way from experiencing such an epic crisis as it had in 2003, the situation remained worrying.
Cash flow was likely to be negative again for the third time in four years. In this context, on 16 November 2013, Patrick Kron, CEO, as published by Le Figaro, set forth his strategy, which was to sell off part of the rail transport division to the Russians. Alstom could sell 20 to 30 per cent of its shares in this division, with an expected gain of 2 billion euros, which would jump-start activities in the energy division. This is one of the key advantages of a company with multiple sectors of activity. During low-cycle activity in one sector, the remaining sectors level out its earnings.
In this announcement of November 2013, there is, however, one question that remains unanswered: what about the alliance announced in 2011 between the boiler business and Chinese company Shanghai Electric? While Kron had touted the merits of this future alliance to the analysts in each of his previous statements, no word of it was mentioned this time. Very odd. Why am I still interested in all these stories?
Clara’s letter – like the letters my parents wrote to Patrick Kron – made no difference. On 16 November 2013, Alstom fired me with prior notice ending 30 June 2014, on real and serious grounds related to my protracted absence that caused disruption to the company and necessitated my permanent replacement (and not for serious misconduct in relation to the Tarahan project and my guilty plea). Alstom was just about willing to bear the cost of repatriating my family from Singapore to France at the end of the school year.
December arrives. It has been almost three months since I last set foot outdoors. I’m suffocating. Prison life is slowly breaking me. Now I fear my next visit more than anything else. Although I asked them repeatedly not to come to see me, my mother and sister, after my father and Clara, finally decided to make the trip. They arrive tomorrow.
Chapter 27
The family rallies round
My appearance frightens them. A ghost-like figure in a khaki jumpsuit. I can see their surprise.
‘It’s unbelievable how much weight you’ve lost!’ were my mother’s first words. ‘Are you eating properly here?’ she asks. ‘Really, are you sure you’re eating enough?’
And then she starts to cry. The shock of prison, the joy of seeing me and the exhaustion of a gruelling journey have overwhelmed her.
‘We landed in Boston late afternoon,’ she finally tells me, ‘and after waiting almost three hours for our rental car, we drove late last night to Providence [Rhode Island’s capital].’
My mother is almost seventy-six years old and suffers from Parkinson’s disease. She was shocked at the overt poverty in Providence.
‘It was sad; I had the impression that I had landed in Fargo, like in the Coen brothers’ film, as if the city had been abandoned.’
She enquires again whether I am eating properly. Like any mother would. My sister Juliette is equally moved by my plight. However, Juliette, who is well acquainted with the French penal system by dint of her profession, immediately embarks on a comparison.
‘There’s no getting away from it, it’s very professional, very clean here.’
I smile wryly. The visiting room is the most presentable part of Wyatt. Undeniably, families are well received. However, Juliette’s satisfaction proves short-lived, once the realities of the communal visiting room hit her. She finally manages to obtain an individual meeting room for their next visit, on an ‘exceptional basis’ and on the grounds of my mother’s state of fatigue after the long journey and her ill health. Enjoying this smidgen of privacy, I listen as she recounts how she has alerted the Ministry of Foreign Affairs, in an attempt to mobilize the French authorities into addressing my situation.
‘Even as far back as April, when you were arrested, I was the one who alerted the French consulate in Boston, who knew nothing about it. The French consulate in New York forgot to tell them. Then, in May, I accompanied Dad, who had an appointment at the Ministry of Foreign Affairs, where we were received by the Head of the Sub-Directorate for the Protection of Persons, and the Head of the Consular Protection of Detainees division. They were rather distant and cold, as if your situation was not their problem.’
That particular meeting had truly stuck in my sister’s throat.
‘They explained to me that they are responsible for handling the cases of two thousand French prisoners around the world and that your situation was not the most pressing. We tried to make them comprehend that your situation was extremely unique and that, above and beyond your case, a leading French multinational was in the cross hairs of the DOJ. And you know what they replied? “Not at all, Madame! We do not see how the French State could be involved in this matter. The case of Frédéric Pierucci is comparable to that of a small-time entrepreneur who has come unstuck for not having paid his VAT.” . . . Can you believe it, Fred?’
Juliette’s anger at the memory of this interview almost lifts my spirits. And when I see the efforts my sister and mother are making to help me, it spurs me on in my fight for freedom.
But the days go by so slowly at Wyatt. Christmas is approaching, and the prosecutors have still not given any sign of a possible bail date. On 28 December my lawyer Liz asks me to get in touch with her as promptly as possible. After eight and a half months of incarceration, perhaps this is good news at last? A cruel disappointment.
‘We received a phone call from Jay Darden of Patton Boggs, Alstom’s lawyer, who informed us that your company has decided to stop paying us, with retroactive effect from 29 July, which was the day you pleaded guilty. So you’re going to have to pay our bills from August to December yourself,’ Liz announces matter-of-factly.
I am speechless. When I regain my senses, I reply: ‘I’ll ask my family to contact the headquarters in Paris to resolve this situation. In your opinion, who was at the origin of this instruction?’
‘Alstom is perhaps desperately trying to please the DOJ, or maybe the pressure wielded by the DOJ is so intense that they have to bow. It’s all the same at the end of the day.’
So here I am, locked up in a maximum-security jail nine thousand miles from my family, fired from a company I served for twenty-one years, abandoned by the French authorities who refuse to lift a finger, forced to pay monstrous legal fees, without knowing when I will be released or what my final sentence will be. No matter how hard I try to stay positive, I hit rock bottom.
Early in January 2014, a glimmer of hope returns when the vice-consul Jérôme Henry informs me of President Hollande’s trip to the United States in February. Above all, he assures me that my case will be evoked during this state visit.
In his view, some members of the government were starting to question the purpose of the DOJ’s pursuit of Alstom.
Personally, I have no illusions, but the consulate and my parents were very hopeful that the President of the French Republic would raise my case during his one-to-one meeting with Barack Obama. My parents even wrote to the French president:
Mr President, our son is currently in pre-trial detention in a maximum-security US detention facility. You can well imagine the distress of our family caught up in such a nightmare. You will note that the two other individuals involved in this case, two former Alstom employees [Rothschild and Pomponi] of American nationality, have not been incarcerated. In this case, it cannot be ruled out that the DOJ has chosen to indict employees, due to Alstom’s poor level of cooperation in this case over the last few years. We respect the judiciary and its independence. We therefore ask you to request the American executive authorities to show mercy or grant pardon to our son, as part of the constitutional powers vested in the American President. We appeal to you, Mr President, to heed this call from helpless parents and to raise this issue with your counterparts in the bilateral meetings that will take place during your state visit.
The letter fell on deaf ears. During his visit to the United States, François Hollande, who had been briefed by the French Embassy as to my incarceration, did not ask for Barack Obama’s intervention. With insight, I can see that the two heads of state had a host of other more critical issues on their agenda, such as the Syrian crisis, the spread of nuclear weapons, the fight against terrorism and climate change. Not to mention intelligence activities.
Three months earlier, in November 2013, Edward Snowden’s revelations put a damper on relations between our two countries. Even if François Hollande, at the end of his interviews with the American president, played the appeasement card by declaring that ‘mutual trust has been restored’, the revelations about the extent of the wire-tapping programmes set up by the American National Security Agency (NSA) certainly left a dent.
The documents taken from the NSA by Edward Snowden are edifying, to say the least. They establish that over a thirty-day period, from 10 December 2012 to 8 January 2013, the United States snooped on and recorded more than 70 million pieces of French telephone data. On average, 3 million pieces of data are intercepted daily, and some specifically targeted numbers systematically trigger the recording of conversations. Some keywords also allow the retrieval of SMS messages and their content.
I wonder about other documents revealed by WikiLeaks. For example, a note entitled ‘France: Economic Developments’ details how the NSA’s mission is to glean information on the business practices of major French companies. American intelligence services scrutinize all markets worth more than $200 million in strategic industries: gas, oil, nuclear or electricity. In other words, the majority of business sectors in which Alstom is a key player. These disclosures are proof of the extent of US commercial espionage. This has been a long-standing practice within the US intelligence community. As early as 1970, the Foreign Intelligence Advisory BoardFN6 recommended that ‘henceforth economic intelligence be considered a function of the national security, enjoying a priority equivalent to diplomatic, military, technological intelligence’. James Woolsey, CIA director from 1993 to 1995 (during Bill Clinton’s presidency), acknowledged in an interview he gave to Le Figaro on 28 March 2000 that ‘it is a fact: the United States secretly collected intelligence against European firms and I consider it is entirely justified. Our role is threefold. First, monitor companies that break UN or US sanctions. Next, track the technologies for civil and military applications. Finally, hunt down corruption in international trade.’
Over the years, the Americans have developed a double-trigger system. Upstream, the sheer force of their intelligence system allows them access to the biggest deals concluded by foreign companies. Downstream, their sophisticated and extremely well-oiled legal instrument authorizes them to prosecute in total legality non-compliant companies and to net billions of dollars in fines. No other country in the world has such an arsenal of weapons at its disposal. It enables them to debilitate, eliminate or even absorb their main contenders. ‘No individual or entity that causes harm to our economy is above the law,’ sums up Eric Holder, Attorney General of the United States, in a pithy statement. But industrial firms are not the only targets. Since the mid-2000s, and particularly since the sub-prime financial crisis, the American administration has been lining up financial institutions, one after the other, that have not complied with its embargoes. Early 2014, it snared BNP Paribas, which was prosecuted for having conducted transactions in US dollars with enemy states that the United States has blacklisted; for instance, Iran, Cuba, Sudan or Libya. The BNP will soon be ordered to dismiss or sanction about thirty of its senior executives and will agree to foot a hefty bill of $8.9 billion (this banking case was bad timing for me as it politically overshadowed the Alstom case). Other French banks such as the Société Générale or the Crédit Agricole will also have to settle large monetary penalties with the US Treasury.
