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01.23.20

Distractions From Microsoft’s Gigantic Tax Evasion and Contribution to Denial of Climate Science

Posted in Bill Gates, Deception, Finance, Free/Libre Software, GNU/Linux, Microsoft at 7:13 am by Dr. Roy Schestowitz

The greenwashing efforts (as seen earlier this month in shallow ‘media’ that’s nowadays more like a glorified PR apparatus) are a cynical ploy at best

Windows is secure. War is peace.

Summary: Microsoft (connected to oil companies) wants us to think of it as a “green” company; not only does it contribute to climate denial but it also evades tax, which is a serious crime that costs tens of billions of dollars (the public pays this money instead)

WE have been covering Microsoft here since 2006 (I had written a lot more about it since the 1990s). It’s no secret that Microsoft lies a lot about a lot of things, including its stance on the environment (we recently published "Microsoft is a Market Leader in Lying and Corruption"). Remember that both Microsoft and Bill Gates financially backed ALEC, as we noted here a long time ago. Microsoft subsidises big polluters and Bill Gates is best friends with them.

Over a decade ago we wrote about ALEC, about BP, and a lot about other environmental concerns. Microsoft very often shows up as a major facilitator. Recently there was whistleblowing at Microsoft about its close relationship with oil companies that drill the seas and cause unbelievable environmental damage.

“The people at Microsoft sometimes believe these lies! They’re not too bright, it’s like a cult to them.”Wouldn’t Microsoft want and even need a distraction from all this?

Notice how the media is nowadays painting Microsoft as “fighting patent trolls” (Microsoft passes to them lots of USPTO- and EPO-granted patents in order to attack Linux by proxy), painting Microsoft as protective of children (because Gates is closely connected to pedophilia on several levels), and saying that Microsoft is infatuated with minorities and women (the opposite is true, based on the track record and lawsuits). They keep telling us that Microsoft is “in love” with what it’s constantly attacking in a variety of ways, e.g. GNU/Linux. The people at Microsoft sometimes believe these lies! They’re not too bright, it’s like a cult to them. This cult gives them salaries. Microsoft management or the company as a whole keeps calling itself 'Open Source company' while it is actively attacking Open Source, e.g. through GitHub, which is proprietary (Microsoft is then bribing the critics at GitHub, based on admissions they publicly make in Twitter).

As one GNU/Linux developer put it this week: “I’ll believe “Microsoft loves Linux” when I see them support desktop Linux. For now it’s very self-serving and entirely when is convenient. It doesn’t count as an investment. It looks like just PR so it doesn’t show that they’re being dragged by the market, kicking and screaming.”

This is to be expected from a company of criminals such as Microsoft. The crimes are harder to perpetrate when people are aware and forewarned.

For over a decade we wrote about Microsoft’s long history of tax evasion worldwide; even whistleblowing from Microsoft itself explained all the pertinent details over the years. It’s not a secret anymore. Almost a decade ago the IRS belatedly took on this issue, tackling Microsoft (connected to oil companies) and this new report reveals Microsoft’s strategy. [via Benjamin Henrion]

“It’s the biggest audit in IRS history,” one person explained. “Of what has been the largest company in the world. It’s taken over a decade. And it’s still not done. And it’s not going well for the gutted IRS.”

They just try to make it too expensive for the IRS or to ‘run the clock’…

Bill Gates bribed a lot of publications to focus on tax evasion of all companies other than Microsoft as well as his own tax evasion using a sham, bogus ‘charity’.

Here are some of the details from this new article:

Eight years ago, the IRS, tired of seeing the country’s largest corporations fearlessly stash billions in tax havens, decided to take a stand. The agency challenged what it saw as an epic case of tax dodging by one of the largest companies in the world, Microsoft. It was the biggest audit by dollar amount in the history of the agency.

Microsoft had shifted at least $39 billion in U.S. profits to Puerto Rico, where the company’s tax consultants, KPMG, had persuaded the territory’s government to give Microsoft a tax rate of nearly 0%. Microsoft had justified this transfer with a ludicrous-sounding deal: It had sold its most valuable possession — its intellectual property — to an 85-person factory it owned in a small Puerto Rican city.

Over years of work, the IRS uncovered evidence that it believed laid the scheme bare. In one document, a Microsoft senior executive celebrated the company’s “pure tax play.” In another, KPMG plotted how to make the company Microsoft created to own the Puerto Rico factory — and a portion of Microsoft’s profits — seem “real.”

[...]

It seems likely, given the size of Microsoft’s Puerto Rico transaction, that the IRS in May 2011 had hit the company with a tax bill in the billions. But Maruca and Hoory thought the agency was thinking small.

Maruca told Microsoft the IRS needed more time, and in early 2012, the IRS withdrew its findings. By then, Hoory had taken leadership of the audit. He began sending new document requests to Microsoft, asking for more interviews and considering what other experts the IRS needed to round out its case. Over the next three years, he and his team amassed tens of thousands of pages and conducted dozens of interviews with Microsoft personnel. (Hoory, who still works at the IRS, declined to comment.)

The evidence they assembled told a story. It revealed how Microsoft had built a massive Rube Goldberg machine that channeled at least $39 billion in profits to Puerto Rico. It revealed a workshop of outside consultants, economists and attorneys who, as they had with other corporate clients, meticulously planned a structure that seemed to have a basis in the law, even if it violated common sense.

The documents showed that Microsoft had been caught red-handed, Hoory believed. Despite all their care in preparing for an eventual audit, the deal’s architects had left damning evidence that, he thought, made it possible for the IRS to expose the sham.

So those who are rich and have prestigious lawyers (or external law firms) can just exhaust the resources of the IRS and get away with it, leaving the IRS to pick on poor and defenseless people instead. This is maladministration and a hallmark of corruption becoming the ‘norm’. We recently mentioned how lots of Microsoft crimes all around the world resulted in only a tiny settlement. Nobody was arrested. This is the kind of atmosphere which encourages Microsoft to carry on with crime.

In order to keep people ‘off its back’ Microsoft kicked off a shameless greenwashing campaign. It started about a week ago and boiled down to nothing more than a blog post and some future (fictional) date with no commitments. Associates of ours thought it was intended to perpetuate the illusion of Microsoft existing for many years to come.

Media which Gates and Microsoft have bribes blindly parroted the talking points from Microsoft. This is why many people no longer trust the media.

CounterPunch wrote this rebuttal to it and published it on Tuesday. To quote some portions:

“This is a bold bet – a moonshot – for Microsoft.”  So claimed Brad Smith, Microsoft President, in a Thursday announcement painting a picture of a company that intends to be carbon negative by 2030.  “And,” Smith continued, “it will need to be a moonshot for the world.”  That vision entails the removal of more carbon dioxide from the atmosphere than it emits.  By 2050, the company intends removing from the environment all carbon the company has emitted since its founding in 1975.

[...]

But much of this should not detract from the obvious point: Microsoft is happy to have a bit each way when it comes to how it finances its green image. The waters it bathes in are not always ecologically sound. While the company positions itself high on the soapbox of environmental purity, it is still a corporation governed by that traditional mix of predatory instinct and innate opportunism. In this, it shares a streak with Facebook and Google, two other entities who exude self-confidence in the illusion that they are principled, morals at the ready.

This point was made last year when it was revealed that all three companies sponsored LibertyCon, the annual conference for the Students for Liberty, a libertarian group. Both Microsoft and Facebook forked out $10,000 each as gold sponsors; Google went a grade better with $25,000, making the platinum grade.

This clutch of sponsors was not, in of itself, odd. But the three companies found themselves sharing a crowded platform with outfits distinctly against the science of climate change, showing how vast open tents can get rather muddy on the inside. One of those present was the CO2 Coalition, a group celebrating the virtues of carbon, and feels that it has been unduly demonised. Carbon, it lauds, “is essential for life.” Available at the conference was a brochure from its good offices extolling the merits of greater quantities of carbon dioxide, explaining how that would improve “our lives and our planet Earth”.

One of its members, retired statistics professor Caleb Rossiter, spoke at the gathering by insisting that, “There has been no increase in storms, in intensity or frequency. The data don’t show a worrisome trend.”

In short, Microsoft is the very opposite of what it claims to be.

ZDNet has also just published “Microsoft to forcibly install Bing search extension in Chrome for Office 365 ProPlus users,” so anyone who still believes in the fictional ‘new’ Microsoft needs to wake up and follow the money. One might end up in some offshore tax evasion haven.

01.04.20

Stop Treating Free/Open Source Software (and Everything Else) Strictly Like a Business

Posted in Finance, Free/Libre Software at 4:14 pm by Dr. Roy Schestowitz

When a boss buys FOSS

Corporations try to buy my Free software project with their money. But that's none of my business.

Summary: With more and more projects being ‘scooped up’ by giant proprietary players (or developers/project leaders being hired for domination over these projects’ direction) we must reassess the shared goals of Free software users (and how they can be protected from such mischiefs)

AN ASSOCIATE of ours sent us this quip from Andrew Yang (early this morning). “We need to stop confusing human value with economic value. We don’t exist to serve the market. The market exists to serve us,” he wrote two days ago.

As we noted a couple of hour ago, money has become toxic — not a boost — to some institutions associated with Free/libre software or Open Source software. Hours ago we also remarked on Microsoft's payments to the OSI. They seem to have become very corrosive, rendering the OSI an enabler of openwashing just like the Linux Foundation. Wasn’t it supposed to be a brand enforcer? As opposed to force of ‘dilution’?

“It’s extremely important to guard organisations of public interest, maintaining their resistance to corrupting influence of money and thus keeping them unaffected or immune or safe from outside interests. Otherwise we all end up having FOSS groups that actually help proprietary software giants or patent offices that protect lawyers, not scientists (e.g. by disregarding § 101).”A lot of what we’re seeing in the world of Free/libre software or Open Source software (FOSS) resembles what happened to SUEPO over the years. Some readers tell us that there were people there who had acted like career-climbing ‘moles’, rising up to high management of the European Patent Office (EPO) instead of protecting staff. That was before Battistelli and Campinos, albeit back when software patents were creeping into Europe. It’s extremely important to guard organisations of public interest, maintaining their resistance to corrupting influence of money and thus keeping them unaffected or immune or safe from outside interests. Otherwise we all end up having FOSS groups that actually help proprietary software giants or patent offices that protect lawyers, not scientists (e.g. by disregarding § 101). We will have a lot more to say about that in days to come.

Free Software Groups Aren’t Dying; But There Are Assassination Attempts With Corporate Money as the Weapon (Greed as the Collective Weakness)

Posted in Finance, Free/Libre Software at 1:48 pm by Dr. Roy Schestowitz

Free software was never fundamentally about making money or sustaining a business model; it’s about dignity, integrity, users’ freedom etc.

Money in FOSS not a problem; If you know how to say 'NO!'

Summary: Groups must learn to reject the seduction or the allure of corporate cash; they should decline offers from rich ‘donors’ or ‘sponsors’ or ‘patrons’ (amongst other convenient and whitewashing euphemisms)

THE FSF, based on what we’ve heard, lost many members. Yes, even after Stallman had left. We already saw some FSF numbers and heard that its campaign to enlist new members is regarded as a failure. It’s hard to tell for sure until the IRS filings for 2019 be come available (which can take a long time).

“This money comes with strings attached to it and salaried (by the ‘donor’) people take over the seats or make decisions by proxy… in exchange for money, always or at least sometimes. “Moments ago we wrote again about the OSI taking Microsoft money, previously we mentioned the FSF taking Red Hat money (while Red Hat celebrates Stallman's removal) and so on and so forth. How about EFF and Google? Days ago we also wrote about OSI misrepresenting its sources of income, omitting all the corporate cash (including a large lump of cash from Microsoft). Well, we'll never accept any corporate money (no matter the amount); we’d rather die as a site — like Groklaw ~7 years ago — than become an embarrassment to our legacy and track record.

The FSF isn’t dying; diminishing maybe, even for sure (if judged by the type of revenue sources), but it’s never too late to save it. We believe that money from patrons kills their mission; when we say “patrons” we mean companies such as Red Hat, i.e. IBM. This money comes with strings attached to it and salaried (by the ‘donor’) people take over the seats or make decisions by proxy… in exchange for money, always or at least sometimes. This neatly relates to the article Jagadees published the other day (about a “One Dollar-One Vote World”).

“Dr. Stallman habitually got ‘in trouble’ (negative press) because of views expressed by him about corporations and their corrupting influence.”Over the past few months Bernie Sanders showed, as he had shown 3-4 years ago, that it’s possible to raise a lot of money from a lot of people, not few very affluent individuals and corporations. If the FSF isn’t able to do that anymore, maybe there’s a trust problem. It needs to work towards restoring that trust instead of accepting corporate donations. We’ve published many articles to that effect lately. I personally know several people who canceled their membership because of how they perceived what had been done to the FSF’s (and GNU’s) founder, Richard Stallman. Dr. Stallman habitually got ‘in trouble’ (negative press) because of views expressed by him about corporations and their corrupting influence. Views like the one below…

“DRM is nearly always the result of a conspiracy of companies to restrict the technology available to the public. Such conspiracy should be a crime, and the executives responsible for it should be sentenced to prison.”

Richard Stallman

12.23.19

Understanding Thierry Breton: A Happy Ending – for Some at Least.

Posted in Europe, Finance at 4:15 am by Dr. Roy Schestowitz


Overview

Understanding Thierry Breton

Epilogue will follow.


exit-entrance
Proceed with caution: revolving door ahead…

Summary: In October 2019, Macron’s chief PR guru was recruited in a consultant role by none other than… wait for it folks… LVMH CEO Bernard Arnault!

No story from the intertwined worlds of French politics and business would be complete without the appearance of a revolving door somewhere along the way.

We’ve seen how Atos CEO Thierry Breton became EU Commissioner for the Internal Market. And how the “killer shark” Christine Lagarde, former head of the IMF resurfaced as the director of the European Central Bank.

“We’ve seen how Atos CEO Thierry Breton became EU Commissioner for the Internal Market. And how the “killer shark” Christine Lagarde, former head of the IMF resurfaced as the director of the European Central Bank. “Following on from our examination of the Macron-Arnault connection in the previous part, we will conclude this series with a tale that has a happy ending, for some at least…

In this case, the beneficiary was a member of a group referred to in the French Press as “the DSK boys”. The “DSK boys” were a group of tech-savvy and ambitious political operators and former Socialist Party members who had cut their political teeth back in 2006 as members of the team behind Dominique Strauss-Kahn’s unsuccessful bid to win the party’s nomination for President. Strauss-Kahn was defeated by Ségolène Royal who lost to the rival UMP candidate Sarkozy in the 2007 presidential election.

“The “DSK boys” were a group of tech-savvy and ambitious political operators and former Socialist Party members who had cut their political teeth back in 2006 as members of the team behind Dominique Strauss-Kahn’s unsuccessful bid to win the party’s nomination for President.”Royale’s defeat in the 2007 election left DSK with high hopes of winning another nomination from the Socialist Party in 2012 as the most promising contender to unseat Sarkozy.

However, DSK’s political ambitions came to an abrupt end in 2011 following his implication in various scandals, including an indictment on charges of sexual assault of a chambermaid in New York, investigation and trial on charges of “aggravated pimping” in Lille and his portrayal in the media as a serial sexual predator.

The establishment of Macron’s En Marche! in 2016 provided a golden opportunity for the “DSK boys” to make their own political comeback as “Macron’s boys” after a decade in the wilderness.

DSK-boys
Macron’s “En Marche!” enabled the DSK boys to make a political come-back

Macron’s electoral campaign during 2016 and 2017 was masterminded by former “DSK boys”, including Stanislas Guerini, Cédric O, Benjamin Griveaux, Emmanuel Miquel and, last but not least, Ismaël Emelien.

DSK-Macron
Macron is reported to have had regular meetings with DSK during the 2017 election campaign

It was reported in the French media that during the election campaign Macron also had regular secretive meetings with Strauss-Kahn himself.

Although Macron was keen to take tactical advice from the former Socialist Party kingpin, he evidently preferred to keep their contact under the radar due to the toxic aura of the DSK brand following the very public fall from grace of the man the media liked to depict as a “horny toad” and a “rutting chimpanzee”.

Arrivals at Emmanuel Macron ceremony at Elysee Palace
DSK boys Benjamin Griveaux and Ismaël Emelien among the Macron team arriving at the Élysée palace for the inauguration of the new President on 14 May 2017.

One of the “DSK boys” who profited most from the comeback was Ismaël Emelien who acted as Macron’s chief PR guru during the 2017 campaign.

“One of the “DSK boys” who profited most from the comeback was Ismaël Emelien who acted as Macron’s chief PR guru during the 2017 campaign.”Emelien was rewarded by the newly elected-President in May 2017 with the post of special advisor for strategy, communication and speeches. However, he ran into difficulties when he became implicated in the Benalla affair which erupted in the summer of 2018.

In February 2019, Emelien announced that he was quitting his post as the President’s special advisor because he wanted to take a more public role and promote a book about “progressive politics”. Both Emelien and the President’s office denied that his departure had anything to do with the Benalla affair.

Cynics are likely to invoke Mandy Rice-Davies at this point.

Whatever about the reasons for Emelien’s untimely departure from Macron’s team, there’s a saying that “God never closes one door without opening another”. It’s an old saying that predates the invention of the revolving door but it seems rather fitting in the present case.

In October 2019, Emelien, was recruited in a consultant role by none other than… wait for it folks… LVMH CEO Bernard Arnault! Honi soit qui mal y pense…

“Both Emelien and the President’s office denied that his departure had anything to do with the Benalla affair.”And with that happy ending — for some at least — we have arrived at the end of the present series which set out to examine the background to Thierry Breton’s nomination as EU Commissioner and to explore his connections to the political and business elites who call the shots in the land of “Liberté, Egalité et Fraternité”.

Before closing the file completely, we will round things off with an epilogue containing a mid-term report on Macron’s “Jupiterian” presidency and some observations on his ambitions at European level and how they may lead to increasing tensions within the post-Brexit EU.

12.22.19

Understanding Thierry Breton: “Oh, Dem Golden Slippers…”

Posted in Europe, Finance at 3:49 am by Dr. Roy Schestowitz


Overview

Understanding Thierry Breton

Epilogue will follow.


Breton and Macron
Exploring the connections between Macron and LVMH’s “Lord of Luxury”

Summary: “In between cutting business deals and supporting the cause of international culture relations, Bernard is very much occupied with tax and inheritance planning as befits a wealthy oligarch.”

In those far-off days between 1981 to 1995 when François Mitterrand, the champagne Socialist and scandal-ridden Machiavellian tactician, held court at the Elysée Palace, he lavished so much public money on grand schemes for the French capital and its monuments that he was often compared to the “Sun King”, Louis XIV.

A couple of decades later, the recently established court of Emmanuel “Manupiter” Macron prefers to bask in the glory of Louis Vuitton rather than that of Louis Quatorze.

The First Lady is renowned for her immaculately coutured appearances in outfits from the LVMH stable that press all the fashionistas’ buttons.

For example, while Emmanuel was busy at the G7 summit in Biarritz in August 2019 bromancing Justin Trudeau and chewing the geopolitical fat with Donald Trump, Brigitte was strutting her stuff on the G7 spouses’ catwalk and wowing the fashionista press in her latest head-to-toe Louis Vuitton outfit which she wore for her photo-ops with Melania Trump.

Trudeau and Macron
Emmanuel bromancing Justin at the G7 summit in Biarritz in August 2019

G7 Summit Biarritz in France - 26 Aug 2019
Brigitte’s LVMH outfit caused a fashionista feeding frenzy in Biarritz in August 2019

However, the First Lady’s penchant for the latest LVMH fashion accessories doesn’t always meet with approval outside of the official PR echo-chamber.

For example, on a state visit to Egypt in January 2019, Brigitte was seen sporting Louis Vuitton “Run Away” sneakers featuring patent monogram canvas together with calf leather, complete with a gold-tone metal plaque and LV Circle logo at the heel during an excursion to the 3000 year-old Abu Simbel temple of Pharaoh Ramses II.

Her choice of footwear drew criticism from diverse quarters.

Some were upset by the alleged fashion faux-pas of wearing trainers on such a formal occasion. However, back home in France, the revolting sans-culottes of the yellow-vest movement seemed to be more concerned about the expenditure of € 750 of tax-payers’ money on a pair of fancy shoes.

Expensive sneakers
“A € 750 pair of shoes at our expense”

But enough of such fripperies. It’s time to move on to more serious business.

The significance of the LVMH connection goes far beyond the First Lady’s desire to position herself in the public eye as “a dedicated follower of fashion”.

It would be all to easy to dismiss LVMH Group CEO, Bernard Arnault as a peddler of over-priced tat. But that would be a fatal underestimation of the influence of this latter-day Gallic Croesus and his significance as a global player in the interconnected worlds of business and politics.

Luxury margins
Some words of wisdom from Europe’s richest man…

At the start of his career, Bernard realised that luxury goods are “the only area in which it is possible to make luxury margins”. By acting on this insight and “following the money”, he managed to amass an incredible fortune. He is currently estimated to be one of the three richest people in the world and is vying with Bill Gates for second place.

Wealthiest-oligarchs
Real-time index on the wall, who is the wealthiest oligarch of them all?

For a brief spell back in July 2019, the Bloomberg Billionaires Index reported that Arnault had dislodged Gates from second place. Although he soon slipped back in to third place on the Bloomberg scale, a couple of months later in November 2019, the Forbes’ Real-Time Billionaires List started listing him ahead of the Microsoft tycoon.

Whether Arnault is ranked in second or third place in these lists hardly matters. The point is that he has amassed sufficient financial clout to make him a force to be reckoned with both at home in France, elsewhere in Europe and further afield on a global level.

To properly appreciate his significance on his home pitch in France, it needs to be understood that Arnault’s role goes beyond that of a mere supplier of haute couture to the First Lady.

Brigitte’s connections with the Arnault family go back a long way to the days when she was a teacher of French literature at the prestigious private Jesuit school, Lycée Saint-Louis-de-Gonzague, commonly known as the “Franklin” because of its location on the Rue Benjamin Franklin in the 16th arrondissement of Paris.

Brigitte’s pupils at the Franklin included Bernard Arnault’s sons, Frédéric and Alexandre. Let’s hope that she didn’t get up to any “monkey business” with them.

Brigitte is also reported to enjoy a close connection with Delphine Arnault, the half-sister of Frédéric and Alexandre, and Louis Vuitton’s vice president, after they struck up a rapport during a trip to New York in 2014 when Emmanuel was Minister for the Economy.

Ever since then Delphine has made sure that Brigitte is properly kitted out for her official photo-ops – in those days as a Minister’s wife and now as the First Lady.

Delphine Arnault
Louis Vuitton’s vice president, Delphine Arnault flanked by half-brothers Frédéric and Alexandre

Brigitte is often seen hobnobbing with the Arnaults at various fashionista love-ins such as the event held to pay tribute to the late Karl Lagerfeld at the Grand Palais in Paris on 20 June 2019.

Arnaults-and Macrons
The First Ladywith the Arnaults at an event to commemorate Karl Lagerfeld

But it’s not all champagne and catwalks for the Arnaults.

While daughter Delphine occupies herself looking after the couturial whims of Madame Macron, Papa Bernard has taken more than a passing interest in the political career of her hubby.

Shortly before the conclusion of the 2017 presidential election, the LVMH CEO expressed his confidence that the En Marche! candidate was on course to carry the day and defeat the far-right populist Marine Le Pen.

LVMH CEO
LVMH CEO Bernard Arnault expresses his confidence in a Macron victory in 2017

In June 2017, shortly after his self-fulfilling prophecy of a Macron victory, Arnault appeared at the Viva Technology conference, held in Paris where he took advantage of the occasion to congratulate the newly-elected President in person.

Arnault and Macron
Arnault congratulates Macron on his election (2017 Viva Tech conference)

In April 2018, Arnault and his wife, Hélène Mercier, were on the VIP guest list to attend a banquet at the White House to mark the French President’s state visit to the USA.

Donald’s little soirée for his French friends seems to have been the kickback for the Michelin-starred meal atop the Eiffel Tower to which the Macrons had treated him during a visit to Paris in July 2017.

Arnault in White House
Bernard Arnault and his wife attending the “$132 million dinner” at the White House in April 2018

Forbes referred to the black-tie affair with its exclusive guest list as “the $132 billion dinner”. Just in case it needs to be pointed out: Arnault’s estimated net worth of over $80 billion back in April 2018 accounted for by far the biggest chunk of the $ 132 billion dollar bottom line estimated by Forbes.

This wasn’t the Lord of Luxury’s first encounter with the Tycoon of Trump Tower. Back in January 2017, he visited the then President-Elect in New York to discuss various issues including the opening of more LVMH factories in the USA.

Arnault in White House with Trump
Bernard meets “the Donald” in Trump Tower, NYC (January 2017)

And, mirabile dictu, in October 2019 Arnault and Trump appeared together in Johnson County, Texas, to cut the ribbon at the opening of a new Louis Vuitton production facility.

Arnault with Trump at an opening
Arnault and Trump at the opening of the Louis Vuitton Rochambeau Ranch in Texas

The Washington Post commented on the event as follows:

“The ribbon-cutting was jarring in its utter nonchalance, in its unflinching fealty to corporate normalcy during these most abnormal times. Can there be neutral ground when the players are a president who has made women in general, along with immigrants and members of the LGBTQ community, feel as though they are under siege, and a billionaire mogul who reaps tremendous profits from those very people?”

Arnault and Putin
The Lord of Luxury meets the Czar of the Kremlin (November 2016)

So what’s he up to when he’s not wining and dining with the POTUS in New York or Washington or Texas?

Well sometimes the Lord of Luxury can be spotted over in the Kremlin enjoying a “flute” (of champagne) with Vlad the Pute, the Czar of the Kremlin — preferably Dom Pérignon of course.

There are no reports so far of any LVMH factories opening in Russia, but by all accounts the LVMH Foundation is heavily engaged on the artistic front in its efforts to cultivate the “close and unbreakable cultural relations between France and Russia”.

In between cutting business deals and supporting the cause of international culture relations, Bernard is very much occupied with tax and inheritance planning as befits a wealthy oligarch.

Back in 2012, when François Hollande was rumoured to be planning new taxes on the ultra-rich, the Lord of Luxury transferred his multi-billion Euro fortune out of France to a Belgian foundation and it was reported that he was seeking Belgian citizenship. However he didn’t meet the strictly applied three year residency requirement and so in the end he withdrew his application.

When news of Arnault’s plans to go into “tax exile” broke in 2012, the left-leaning Rothschild-financed daily Libération, poked fun at him with a front-page headline that screamed “Get Lost, you Rich Jerk”.

This was a jeu de mots alluding to an infamous outburst by former president Nicolas Sarkozy, one of Arnault’s political buddies. Back in 2008, Sarkozy insulted a farmer who refused to shake his hand at an agricultural show with the dismissive retort “Casse-toi, pauvre con!” (“Get lost, you poor jerk”).

Liberation story on Arnault
Libération poked fun at the would-be multi-millionaire tax exile with a word-play on Sarkozy’s infamous insult to a French farmer in 2008.

Arnault reacted in the typically humourless and litigious fashion of French oligarchs by lawyering-up and trying to sue Libération for alleged “public insult”.

Libération responded to Arnault’s attempt to SLAPP it down with another cheeky front page headline: “Bernard, if you come back all will be forgiven!”

Arnault's SLAPP
Libération chill-out response to Arnault’s attempt to SLAPP it down:
“Bernard, if you come back all will be forgiven!”

In the next and final part of the series we will look how the “DSK boys” made a comeback under Emmanuel Macron.

Stay tuned for this tale of political derring-do featuring a “rutting chimpanzee”, a rogue bodyguard and a happy ending with yet another revolving door, this time between the Elysée Palace of the French President and the upper echelons of LVMH.

12.19.19

Understanding Thierry Breton: The “Killer Shark” Resurfaces…

Posted in Europe, Finance at 3:28 pm by Dr. Roy Schestowitz

Overview

Understanding Thierry Breton

Epilogue will follow.


Killer Shark
Dominique Strauss-Kahn’s soujourn on Riker’s Island in May 2011 opened up an unexpected window of opportunity for the “killer shark” from Baker & McKenzie

Summary: In this part we will look at her connections to Macron and how he helped the “killer shark” to resurface in European waters earlier this year by means of his political machinations in Brussels

The Rothschild connection is just one of the links to the world of international finance shared by Emmanuel Macron and Thierry Breton who are also both well acquainted with Christine Largade, the former boss of the IMF in Washington and now head of the European Central Bank in Frankfurt.

In this part we will look at her connections to Macron and how he helped the “killer shark” to resurface in European waters earlier this year by means of his political machinations in Brussels.

“In this part we will look at her connections to Macron and how he helped the “killer shark” to resurface in European waters earlier this year by means of his political machinations in Brussels.”Largarde had over two decades of experience with Chicago-based law firm Baker & McKenzie before returning to France in June 2005 to follow a career in politics.

She started as Minister for Trade under Jacques Chirac and continued as Minister for Economy and Finance under his successor, Nicolas Sarkozy until she was parachuted in as head of the IMF in an emergency operation to replace Dominique Strauss-Kahn (DSK) in July 2011.

DSK of IMF
DSK on his travels as IMF boss. Is he waiting for the room service?

Her big break at the IMF came as a result of DSK’s sudden resignation in May 2011 following his arrest in New York on charges of sexual assault.

“Largarde had over two decades of experience with Chicago-based law firm Baker & McKenzie before returning to France in June 2005 to follow a career in politics.”Lagarde is the living personification of the Davos neo-liberal open economy idea of modern globalised capitalism. However, during her time at the head of the IMF, she occasionally dropped hints that the decades-long run of unrestrained laissez-faire by, for, and of the rich was no longer sustainable.

Unfortunately, despite all the impressive sound-bytes it has never been clear what concrete policies and programs “Madame Bailout” advocates to deal with the problem of rising inequality which she loves to talk about.

Breton’s links to Lagarde have already been examined in an earlier part of the series.

Macron and Lagarde
Macron’s ministerial photo-ops with “Madame Bailout of the IMF”

During his time as Minister for the Economy in the government of the great vacillator François “Flanby” Hollande, Macron often appeared in photo-ops with the IMF’s “Madame Bailout”.

“During his time as Minister for the Economy in the government of the great vacillator François “Flanby” Hollande, Macron often appeared in photo-ops with the IMF’s “Madame Bailout”.”More recently, at an EU summit at the start of July 2019, Macron played a key role in brokering a deal for the distribution of top jobs which amongst other things saw Lagarde being “repatriated” from her lair in Washington and parachuted in to lead the European Central Bank (ECB) in Frankfurt.

It remains to be seen whether the new head of the ECB will show the same level of passionate and unquestioning devotion to her current political sponsor as she did to her earlier patron, Nicolas Sarkozy.

Sarko, Lagarde
“Dear Nicolas… use me for as long as it suits you and suits your plans and casting call…”

Whatever about the extent of Christine’s devotion to Emmanuel — who is reputed to have a way with older more mature women — it’s worth noting that the Macron-Lagarde connection appears to go beyond the purely political level and extends to Christine’s elusive companion and domestic partner, Xavier Giocanti.

On 11 November 2018, Brigitte Macron had the task of hosting a reception for spouses of foreign dignitaries attending ceremonies marking the 100th anniversary of the 1918 Armistice which ended World War I. On that occasion, she was spotted in the company of Giocanti at the Palace of Versailles where the reception was held.

The Lunch of the spouses of the present heads of state and government in the international Ceremony
Brigitte Macron greeting Lagarde’s elusive companion Xavier Giocanti at a lunch and concert held at the Palace of Versailles in November 2018

In contrast to his better known partner, Giocanti seems to be keen to avoid the limelight as much as possible and there may be good reasons for his desire to keep a low profile.

“In contrast to his better known partner, Giocanti seems to be keen to avoid the limelight as much as possible and there may be good reasons for his desire to keep a low profile.”The businessman’s track record is not necessarily something that the recently appointed head of the European Central Bank would want to be publicly associated with.

Giocanti, who was born on 16 September 1954 in Marseille, has family roots in Guagno in southern Corsica.

From 2003 to 2005, he was in charge of the Center for the Promotion of Employment through Microenterprise (CPEM), now renamed the Marseille Métropole Initiative, a micro-credit platform supported by public and private funding and dedicated to the creation and implementation of small businesses.

In July 2010, following an investigation by the EU anti-fraud agency OLAF into “serious irregularities” in CPEM’s accounts, the European Court of Justice ruled that CPEM should reimburse an amount of almost € 1 million in EU subsidies.

As we saw in an earlier part of the series, Christine is no stranger to getting a slap on the wrist from the courts of law for misuse of public funds.

“The businessman’s track record is not necessarily something that the recently appointed head of the European Central Bank would want to be publicly associated with.”Given her high-profile position at the head of the ECB, it is understandable that she would prefer to keep Xavier’s misdemeanours out of the glare of public scrutiny as much as possible.

In the next part we will see at how Macron not only helped the “killer shark” to resurface in Frankfurt but also helped Ursula von der Leyen to secure another plum EU job at the head of the European Commission where amongst other things she will be Thierry Breton’s “boss” when he takes up his new job as Commissioner for the Internal Market.

Understanding Thierry Breton: Concordia, Integritas, Industria

Posted in Europe, Finance at 2:07 am by Dr. Roy Schestowitz

Overview

Understanding Thierry Breton

Epilogue will follow.


Barons de rothschild
The Rothschild family motto: Concord, Integrity and Industry

Summary: Macron has never made any secret of his Rothschild connections

After graduating from the ENA in 2004, Macron started off his career as a senior civil servant in the Inspection Générale des Finances (IGF), an elite corps within the Ministry for the Economy and Finance whose members are recruited from the highest-ranking ENA graduates.

In 2007, he had his first taste of the limelight as deputy rapporteur on the “Commission to Unleash French Growth”, a cross-party commission on economic reform convened by the newly elected President Nicolas Sarkozy who charged it with studying “the bottlenecks that constrain growth”.

Young Macron
Macron (right), in 2007 as part of the cross-party Attali commission set up to look at ways to boost French economic growth

The commission was chaired by the Algerian-born Jacques Attali, an economic and social theorist, writer, political adviser and senior civil servant, who had served as a counsellor to President François Mitterrand from 1981 to 1991 and was the first head of the European Bank for Reconstruction and Development in 1991-1993.

“After graduating from the ENA in 2004, Macron started off his career as a senior civil servant in the Inspection Générale des Finances (IGF)…”But the ambitious young Énarque was growing restless and starting to get bored with his nine-to-five civil service job.

In 2008, he paid €50,000 to buy himself out of his government contract so that he could move to the private sector.

It wasn’t just any old job that Emmanuel had set his sights on. He joined the prestigious investment bank Rothschild & Cie where he worked on mergers and acquisitions from 2008 to 2012 and acquired the sobriquet of the “Mozart of Finance”.

Macron, Edmond de Rothschild
Between 2008 and 2012 Macron pursued a short but highly lucrative career at Rothschild & Cie

The French branch of the Rothschild financial dynasty was founded in Paris in 1812 by James Mayer de Rothschild who was sent there from his home in Frankfurt, Germany, by the patriarch, Mayer Amschel Rothschild. In collaboration with the other branches of the family, the French branch soon rose to prominence in the world of international finance.

“In 2007, he had his first taste of the limelight…”Over the years, the family’s fortunes have flowed and ebbed with the tide of political events. For example, the interests of all Rothschild family branches across Europe were adversely impacted to a significant degree by the popular uprisings of 1848, the Great Depression of the 1930s and the rise of anti-Jewish resentments followed by World War II.

In the 1930s, their substantial railroad holdings were nationalized by the French government and after the fall of France 1940 the Nazis confiscated the Paris bank.

The bank was restored to family ownership at the end of the war but in 1981 it was once again removed from their hands, this time following nationalisation by the Socialist government of President François Mitterrand.

“But the ambitious young Énarque was growing restless and starting to get bored with his nine-to-five civil service job.”It was only after the Socialists lost power in 1986 that the Rothschilds managed to obtain a new banking license in France.

In 1987 Baron David René de Rothschild joined by other family members including cousin Eric de Rothschild created a successor company, Rothschild & Cie Banque.

Capitalised at a mere $ 1 million and starting with just three employees, they rapidly expanded their operation into a major player in France and continental Europe.

“Macron’s share of the fees on this € 9 billion deal made him a millionaire.”According to French media reports, Macron was head-hunted by François Henrot, one of David de Rothschild’s most trusted associates, on the recommendation of Jacques Attali and Alain Minc — another Énarque and former Inspecteur des Finances.

After working on the recapitalization of the newspaper Le Monde and the acquisition of Siemens IT Solutions and Services by Atos in 2010 / 2011, Macron was promoted to a partner.

Soon afterwards, he was appointed as managing director and put in charge of Nestlé’s acquisition of one of Pfizer’s largest subsidiaries, its infant food unit. Macron’s share of the fees on this € 9 billion deal made him a millionaire.

Mediapart on Macron, Rothschild
The “Mozart of Finance” got a good return on the € 50,000 he invested to buy himself out of his civil service contract

According to a French media report published in 2014, an official declaration of financial interests filed by Macron as Minister for the Economy revealed that he had earned € 2.4 million at Rothschild over a period of 18 months.

Macron’s connections to the Rothschilds go beyond purely financial affairs.

Both he and his wife are often seen rubbing shoulders at social events with senior members of the banking dynasty such as his old boss David de Rothschild and cousin, Eric, chair of the Rothschild Archive Trust.

Macron, Eric de Rothschild
Macron with Eric de Rothschild in April 2017 during the presidential election campaign

The Macrons are regular guests of David de Rothschild at the annual dinner organised by CRIF, an umbrella organisation of French Jewish associations.

Macron, David de Rothschild
Emmanuel and Brigitte Macron with David de Rothschild at the 2018 CRIF annual dinner

CRIF dinner
Brigitte Macron having a good old giggle with David de Rothschild at the CRIF annual dinner in 2019

Brigitte was also spotted in the company of David de Rothschild together with Claude Chirac, reputed to be a former girlfriend of Nicolas Sarkozy, at the 90th birthday celebrations for the French singer and actress Line Renaud in July 2018.

Chirac, Rothschild, Macron
Claude Chirac, David de Rothschild and Brigitte Macron at the 90th birthday celebrations for actress Line Renaud in Paris

Macron’s well-publicised connections to the Rothschilds and his connections to leading figures of France’s large and influential Jewish community have often made him the target of criticism and denunciation and all kinds of off-the-wall conspiracy theories before during and after the 2017 presidential election campaign.

“Macron’s connections to the Rothschilds go beyond purely financial affairs.”Back in March 2017 when the election campaign was in its final stages and Macron’s victory was by no means certain, the Financial Times noted that “Emmanuel Macron’s Rothschild years make him an easy election target”.

The article cited Luc Rouban, a professor at CEVIPOF, research centre of the Paris Institute of Political Studies known as “Sciences Po”. According to Rouban, the Eurozone debt crisis, along with an underlying suspicion of the monetary system and globalised capitalism, had intensified anti-bank sentiment among the public with the consequence that most candidates — with the exception of Macron — were promising to rein in the power of financial institutions.

“According to Rouban, the Eurozone debt crisis, along with an underlying suspicion of the monetary system and globalised capitalism, had intensified anti-bank sentiment among the public with the consequence that most candidates — with the exception of Macron — were promising to rein in the power of financial institutions.”According to Rouban: “This makes Macron look like the candidate of the globalised elite.”

The FT article also referred to an incident at the start of March 2017 in which the centre-right Les Républicains party, successor to the UMP, triggered a political “shitstorm” by tweeting a caricature that appeared to borrow heavily from the anti-Semitic propaganda iconography of the 1930s.

Macron was depicted as “the banker’s candidate” with a long hooked nose and a top hat, using a sickle to cut a cigar and surrounded by allies from his circle of trust.

Macron galaxy
A caricature of Macron tweeted by Les Républicains borrowed heavily from anti-Semitic tropes of the 1930s and unleashed a storm of criticism about the standard of the political debate.

The caricature sparked an veritable “shitstorm” on social media, and it was soon replaced with more innocuous photograph of Macron. Les Républicains were quick to issue an apology on the party’s Twitter account saying that it desired to “avoid any pointless controversies”.

Macron connections
An apology was quickly issued and the controversial caricature was replaced by a photograph.

François Fillon, the party’s candidate, was also quick off the mark to tweet a statement condemning the drawing as “unacceptable” and saying he would not tolerate the dissemination of caricatures that used features of “anti-Semitic propaganda”.

“The caricature sparked an veritable “shitstorm” on social media, and it was soon replaced with more innocuous photograph of Macron.”“I understand the emotion it may have triggered because it alluded to drawings from a dark period in our history and had echos of an ideology I have always fought against,” Fillon said. “Political combat is tough but it must remain dignified,” he added, saying he had asked the party’s secretary general to punish those who have given the party an “image totally contrary to our values”.

The En Marche! spokesman, Benjamin Griveaux, criticised Les Républicains“use of terms and images that tap into the anti-Semitic imagination” and he expressed concerns about the quality of the debate and “the state of mind that prevails among the management of some [campaigns]“.

It deserves to be said at this point that Macron has never made any secret of his Rothschild connections. These connections have been well documented in the French media and in books such as “Rothschild, une banque au pouvoir” (“Rothschild, a bank in power”) which examines the influence of the bank in French politics.

“It deserves to be said at this point that Macron has never made any secret of his Rothschild connections.”Thierry Breton on the other hand is much more circumspect in this regard and he seems to do everything he possibly can to conceal his close business and social connections to the illustrious financial dynasty.

A quick glance at the LinkedIn entries of the French President and his newly appointed Commissioner in Brussels confirms their difference approaches on this issue.

Emmanuel makes no bones about disclosing his previous employment relationship with Rothschild & Cie from 2008 to 2012. For him it’s like a badge of honour that he wears with pride.

“A quick glance at the LinkedIn entries of the French President and his newly appointed Commissioner in Brussels confirms their difference approaches on this issue.”However, Thierry prefers to keep shtum about his own stint as a senior advisor for the US branch of the Rothschilds between 2007 and 2008.

Come on Thierry, it’s an open secret so what exactly is it that you are trying to hide?

In the next part we will look at how Thierry’s old pal, the “killer shark” from Baker McKenzie and the IMF, resurfaced in European waters earlier this year as a result of Macron’s political machinations in Brussels.

11.27.19

Understanding Thierry Breton: “Mister Cash” and “Madame Bailout”

Posted in Europe, Finance at 4:35 am by Dr. Roy Schestowitz

Overview

Understanding Thierry Breton

Further parts pending review and research


Lagarde with mirrors
The IMF’s “Madame Bailout”: Always smiling, always polite –
“but she’s an American lawyer at heart – a killer shark”

Summary: In December 2016 Lagarde was found guilty of negligence but served no time because of connections

The bromance with Nicolas may have turned sour but Thierry continues to enjoy cordial relations with other former cabinet colleagues.

One person with whom he has maintained close links over the years is the high-flier Christine Lagarde, the IMF’s “Madame Bailout”, who is regularly fêted in media puff-pieces as the “rock-star” of international finance.

Lagarde was appointed head of the International Monetary Fund in 2011 and has recently moved back across the Atlantic to take over the helm at the European Central Bank in Frankfurt.

“She handled major antitrust and labour cases, was made partner after six years and was named head of the firm in Western Europe. She joined the Executive Committee in 1995 and was elected as company chairman in October 1999.”Her career began as a lawyer back in the 1980s when she joined the Chicago-based international law firm Baker & McKenzie as an associate after completing law studies in Paris in 1981. She handled major antitrust and labour cases, was made partner after six years and was named head of the firm in Western Europe. She joined the Executive Committee in 1995 and was elected as company chairman in October 1999.

According to press reports, Lagarde’s years working in America gave her “an empathy with Anglo-Saxon ways” and “a pragmatic, team-oriented style of solving problems”.

But the charming and elegant facade conceals a ruthless streak. One official who had the misfortune to fall out with her put it like this: “She’s always smiling, always polite, but she’s an American lawyer at heart – a killer shark”.

In May 2005, Lagarde left her legal career in Chicago and returned to France to take up a position as Minister for Foreign Trade under President Jacques Chirac and his Prime Minister, Dominique de Villepin.

“While Thierry’s wife, Valerie, was off on a jolly up the Ganges with First Lady Bernadette Chirac, Thierry and Christine were busy posing for official photo-ops alongside Uncle Jacques.”A few months earlier in February 2005, Thierry Breton had assumed his portfolio as Minister for the Economy.

The two newcomers at the cabinet table had some common ground because they were not career politicians but had started their careers in the private sector. In addition to this they were both ideologically aligned to the neo-liberal wing of the UMP.

Press photos from that period often show Breton and Lagarde in tandem, frequently appearing together with their political patron, Jacques Chirac.

Lagarde's plane meeting
On board the presidential jet with defence minister Michele Alliot-Marie (February 2006)

For example, they were among the select group of ministers who accompanied Chirac on his state visit to India in February 2006.

Chirac, Lagarde and Breton
Accompanying Uncle Jacques on a state visit to India (February 2006)

While Thierry’s wife, Valerie, was off on a jolly up the Ganges with First Lady Bernadette Chirac, Thierry and Christine were busy posing for official photo-ops alongside Uncle Jacques.

Official press photos from the period indicate a strong professional rapport between the Ministers for Economy and Foreign Trade who often appear in public like two peas in the proverbial pod.

lagarde and Breton
The ministerial duo – like two peas in the proverbial pod

It comes as no surprise to find that the pair continued to rub shoulders at social events long after Thierry had departed from the cabinet table. A photo from 2009 shows the pair enjoying a “night at the opera” in Paris where they attended a gala performance of Verdi’s Macbeth organised by the Friends of the Paris Opera.

Lagarde and Breton true love
A night at the opera: attending a performance of “Macbeth” in Paris (April 2009)

As we have seen, Sarkozy decided to ditch Breton as Minister for Economy when he took over the reins of power in France in May 2007.

However, he kept the “killer shark” Lagarde on his team. She was initially assigned to the Ministry of Agriculture but a few weeks later after a disappointing election result for the UMP, Sarkozy decided to reshuffle his recently-formed cabinet.

As a result of this reshuffle, Lagarde was moved to the Ministry for Economy (Bercy) where she was mandated to oversee various reforms, including tax cuts and the implementation of measures to liberalise the labour market.

Lagarde remained at Bercy until mid-2011 when a high-profile international scandal that erupted around the IMF boss Dominique Strauss-Kahn suddenly and unexpectedly opened up a new career opportunity for her.

DSK and Lagarde
Lagarde with IMF head honcho DSK – the body language says it all…

On 14 May 2011, Strauss-Kahn (often referred to by his initials as “DSK”) was arrested and charged with the sexual assault and attempted rape of 32-year-old Nafissatou Diallo, a chambermaid at the Sofitel New York Hotel in Manhattan earlier that day.

At the time of the alleged attack, Strauss-Kahn was the head of the International Monetary Fund (IMF) and a kingpin of the French Socialist Party where he was regarded as the favoured candidate for the upcoming French Presidential election in 2012.

“Strauss-Kahn’s position at the IMF quickly became untenable as criminal proceedings were opened against him in New York on charges of sexual assault and attempted rape. Four days after his arrest, he resigned as head of the IMF.”But, as is well known, a week is a long time in politics. Strauss-Kahn’s position at the IMF quickly became untenable as criminal proceedings were opened against him in New York on charges of sexual assault and attempted rape. Four days after his arrest, he resigned as head of the IMF.

The criminal charges were eventually dismissed at the request of the prosecution due to doubts about the testimony provided by the alleged victim and a lack of conclusive physical evidence. Diallo filed a parallel civil suit against Strauss-Kahn which was settled out of court for an undisclosed amount, reported to have been $1.5 million.

The affair brought a sudden and abrupt end to Strauss-Kahn’s IMF career on the international stage. However, his difficulties turned out to be a golden opportunity for Lagarde.

Her privileged relationship with Sarkozy propelled her to the forefront in the IMF succession stakes and before long she was once again on her way across the Atlantic to take up her new position in Washington D.C.

But the past was about to catch up with her.

Several months after her appointment as head of the IMF, the public prosecutor in France recommended an investigation into her involvement in a massive government payout to businessman Bernard Tapie in 2008.

The case itself was decades old, going back to the 1990s when Tapie had to sell his stake in the sportswear firm Adidas because he became a government minister under François Mitterand. From 1993 to 2008 a long-drawn out legal battle took place between Tapie and the partly state-owned Crédit Lyonnais bank. Tapie claimed that Crédit Lyonnais had short-changed him when it sold Adidas on his behalf.

In 2008, the case was referred to a special arbitration panel which ruled that Tapie should receive compensation of €404 million from the French state. Lagarde, who was Minister for Finance at the time, decided that the ruling should be accepted without challenge.

Bernard Tapie
Bernard Tapie received an award of €404m approved by Lagarde

The case was controversial because Tapie was a close friend of Sarkozy and he was reported to be on the verge of bankruptcy at the time of the settlement. It was alleged by opposition politicians that the settlement procedure had been politically motivated and was designed to reward Tapie for his support for Sarkozy during the 2007 election campaign.

“…a special court established to try cases of ministerial misconduct, ordered that Lagarde should stand trial for alleged complicity in the misuse of public funds.”On 3 December 2015, a French court ruled that Tapie should return the compensation with interest. A few days later, the Court of Justice of the Republic, a special court established to try cases of ministerial misconduct, ordered that Lagarde should stand trial for alleged complicity in the misuse of public funds.

Lagarde trial
Not amused – Christine Lagarde on the opening day of her trial in Paris (12 December 2016)

Following a hearing which took place in December 2016, Lagarde was found guilty of negligence. She was not present in court to hear the verdict because she had already left Paris to return to her IMF job in Washington.

Lagarde could have faced up to a year in prison and a fine of €15,000 upon conviction, but the court decided that she should be spared a sentence. And so, incredibly, despite the guilty verdict she emerged from the trial without a criminal record.

The court’s ruling, which took many by surprise, was “explained” by the presiding judge Martine Ract Madoux as follows: “The context of the global financial crisis in which Madame Lagarde found herself in should be taken into account.” The judge also cited the court’s desire to protect Ms Lagarde’s “good reputation” and “international standing” as reasons for not imposing a sentence!

“Following a hearing which took place in December 2016, Lagarde was found guilty of negligence.”To the outside observer, it seems like a clear case of “different strokes for different folks” in the land of “Liberty, Equality and Fraternity”.

Despite the leniency of the court, the episode must have been an unpleasant experience for someone like Lagarde who is not used to standing in the dock. But, despite the public embarrassment, she could take consolation from the loyal support that she received from many old friends during her ordeal.

These included her former cabinet colleague, Thierry Breton, who dutifully attended the hearings and was spotted in the foyer of the court exchanging pleasantries with Claude Soulier, general secretary of the CJR on 14 December 2016.

Claude Soulier and Breton
Breton with Claude Soulier, general secretary of the Court of Justice of the Republic, prior to a hearing of IMF boss Christine Lagarde (14 December 2016)

Whatever emotional distress Lagarde may have suffered from her little scrape with the CJR, she emerged unscathed from this encounter with the wheels of justice.

As one cynical commentator chose to put it: “As is usual for white-collar establishment criminals in France, she did not receive any formal punishment, and was left to get on with her career.”

Her term at the IMF was due run until 2021, but in July of this year Lagarde announced that she was stepping down early and would leave on 12 September 2019.

She hadn’t fallen victim to some sleazy PR disaster like her predecessor the self-confessed “libertine” and reported sexual predator, Strauss-Kahn. Nor was she facing fresh allegations of ministerial misconduct. On the contrary, she had her eyes set on a new career move.

“…Thierry Breton, who dutifully attended the hearings and was spotted in the foyer of the court exchanging pleasantries with Claude Soulier, general secretary of the CJR on 14 December 2016.”As it happened, Lagarde had just been nominated by EU leaders to replace the outgoing European Central Bank president Mario Draghi from 1 November. Her nomination was approved by the European Parliament on 17 September and her appointment was officially confirmed in October.

According to Politico, the choice of Lagarde for the top ECB post was the result of a Franco-German political “horse-trading” deal in return for which the Germans received the top job at the European Commission which was assigned to Ursula von der Leyen (née Albrecht).

There are still a lot of unanswered questions about Lagarde’s “non-conventional” appointment as president of the ECB but this is not the place to go into them.

All that remains to be said at this point is that it now seems almost certain that “Madame Bailout” will soon be joined in the upper echelons of the EU Nomenklatura by her old cabinet colleague, Thierry “Mister Cash” Breton, as soon as his nomination as Commissioner for the Internal Market has been rubber-stamped.

We will just have to wait and see whether or not Thierry will be at the receiving end of any gushing missives from Christine such as the “pledge of allegiance” which she addressed to her former political patron, Sarkozy.

According to press reports, this “billet-doux” to Sarkozy was found during a police raid on Lagarde’s Paris flat in 2013 in the course of investigations into the Tapie affair:

Dear Nicolas, very briefly and respectfully,
1) I am by your side to serve you and serve your plans for France.
2) I tried my best and might have failed occasionally. I implore your forgiveness.
3) I have no personal political ambitions and I have no desire to become a servile status seeker, like many of the people around you whose loyalty is recent and short-lived.
4) Use me for as long as it suits you and suits your plans and casting call.
5) If you decide to use me, I need you as a guide and a supporter: without a guide, I may be ineffective and without your support I may lack credibility.
With my great admiration,
Christine L.

In the next part we will explore Thierry’s connections to another UMP luminary, albeit a relatively minor one – Benoît Battistelli, a deputy-mayor of Saint-Germain-en-Laye, who gained notoriety as president of the European Patent Office.

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