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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.

11.25.19

Understanding Thierry Breton: Thierry & Nicolas – a Bromance That Turned Sour?

Posted in Europe, Finance at 10:22 pm by Dr. Roy Schestowitz

Overview

Understanding Thierry Breton

Further parts pending review and research


Sarkozy and Breton
Thierry and Nicolas: despite a promising start, the bromance turned sour in the end.

Summary: “Whatever Sarkozy’s motives may have been, he decided to dispense with the services of his former colleague and so Breton’s ministerial career came to an abrupt end in the summer of 2007.”

Thierry and Nicolas go back a long way to the days when they were ministerial colleagues under the presidency of Jacques Chirac between 2002 and 2007.

“Sarko”, or Nicolas Paul Stéphane Sarközy de Nagy-Bocsa, to give him his full name, joined the Chirac government in 2002 where he served as Minister for the Interior.

Thierry joined the cabinet as Minister for the Economy a few years later in February 2005. He replaced Hervé Gaymard who was forced to resign after the satirical investigative newspaper Le Canard enchaîné disclosed that he was using public money to fund the cost of an exclusive Parisien apartment for his family.

Sarkozy and Breton with group
President Jacques Chirac with Prime Minister Dominique de Villepin and his cabinet, including Sarkozy and Breton in the front row

In 2004, Sarkozy began to position himself as a contender to succeed Chirac and he was successful in securing election as leader of the UMP, the French conservative party.

He moved to the Ministry for the Economy for a short stint between 2004 and 2005 and then returned to his former post at the Ministry for the Interior where he remained until he stepped down in March 2007 to focus on his election campaign to become President of the Republic.

Sarkozy faces
“Sarko”, Minister for Silly Faces who became President in 2007.

It would appear that Thierry and Nicolas enjoyed cordial collegial relations at the cabinet table. Many photos from that time show them having a good laugh in each other’s company.

There were signs that a Gallic bromance was beginning to blossom between the two poster-boys of the UMP’s ultra-liberal wing. But appearances can be deceptive especially in the ultra-Machiavellian world of French politics.

Sarkozy and Breton as pair
Colleagues at the cabinet table (2005): Thierry Breton (Minister for the Economy), Nicolas Sarkozy (Minister for the Interior) and President Jacques Chirac

Sarkozy and Breton with Chirac
Thierry and Nikolas having a cordial collegial tête-à-tête.
Uncle Jacques looks on with a furrowed brow.
“What are those little rascals up to this time?”

Sarkozy and Breton trio
Thierry and Nikolas enjoying a good chortle together with their ministerial colleagues.
Who are they planning to shaft this time?

Sarkozy with Breton behind
Catch-me-if-you-can.
Nikolas plays hard-to-get
with Thierry in hot pursuit.

A photo of the duo taken on the margins of the Armistice Day Ceremony against the backdrop of the Arc de Triomphe in 2005 contains a premonition of things to come. Maybe it was just the November weather, but Nicolas has a distinctly frosty countenance and his attitude towards his cabinet colleague seems to be on the chilly side.

Sarkozy, Breton in Paris
Thierry and Nicolas at the Armistice Day Ceremony in Paris (11 November 2005).
Early signs of a chill in the relationship?

Sarkozy’s presidential ambitions had become clear from around 2004 onwards. This led to increasing tensions between the ambitious acolyte and his former mentor, Chirac, the elder statesman of the UMP party. Breton opted to maintain his personal loyalty to Chirac and this seems to have led to a growing alienation from Sarkozy despite their ideological closeness.

“Breton opted to maintain his personal loyalty to Chirac and this seems to have led to a growing alienation from Sarkozy despite their ideological closeness.”However, Breton did not permit the cracks in the personal relationship to become visible to the public eye. In January 2007 when the UMP elected Sarkozy as the party’s candidate for the presidential election later that year, he rose to the occasion and delivered an endorsement speech during the official investiture held in Paris.

UMP Breton
Breton giving an endorsement speech for UMP presidential candidate Sarkozy during the official investiture in Paris (January 2007)

He accompanied Sarkozy on the election campaign trail and appeared as a supportive colleague in the usual photo-ops, for example, at an educational center in the town of Joue-les-Tours in April 2007.

UMP, Sarkozy and Breton
UMP presidential candidate Sarkozy accompanied by Breton during a visit to an educational centre in Joue-les-Tours (April 2007)

Sarkozy’s provocative public utterances as Minister for the Interior, such as his description of urban rioters as “scum”, “riff-raff” and “hoodlums”, led to him being dubbed the “candidate for brutality” by his critics who warned that his election as President would polarise French society. But his tough language and hardline poses made a positive impression among certain sections of the electorate and he soon gained the pole position.

Throughout the later campaign period he remained consistently ahead of his main rival, the Socialist Party candidate Ségolène Royal, and it came as no surprise when he emerged as the winner in the final round of the electoral contest in May 2007.

“Breton’s close personal loyalty to Chirac made him “unreliable” in Sarkozy’s eyes.”Chirac recommended to Sarkozy that he keep Breton in his post as Minister for the Economy. But the President-elect was very much his own man and he decided not to follow the advice of his erstwhile mentor.

Breton’s close personal loyalty to Chirac made him “unreliable” in Sarkozy’s eyes. Another factor which counted against him was the perception that his political credibility was on the line because of the EADS insider trading scandal.

Noël Forgerard’s “golden parachute” had become a prominent topic of public discussion during the 2007 presidential election campaign and Breton’s involvement in this saga raised a number of awkward questions for the UMP.

Whatever Sarkozy’s motives may have been, he decided to dispense with the services of his former colleague and so Breton’s ministerial career came to an abrupt end in the summer of 2007.

“Whatever Sarkozy’s motives may have been, he decided to dispense with the services of his former colleague and so Breton’s ministerial career came to an abrupt end in the summer of 2007.”But even after his official departure from the political parquet, Breton continued to play a significant behind-the-scenes role, for example by advising François Baroin when the latter was Minister of the Budget in 2010-2011.

They say that revenge is a dish best eaten cold and this is a view that Thierry seems to subscribe to. He waited almost a decade before settling accounts with Nicolas for having snubbed him in 2007.

In 2016 when Sarkozy published a book reviewing his term of office as President between 2007 and 2012, Breton went public with an excoriating indictment of Sarkozy’s lack of economic rigour and his incompetent management of the financial crisis which occurred on his watch.

“In the next part we will look at Breton’s close connections with another prominent French political figure, the “killer-shark” Christine Lagarde, former head of the IMF and now Director of the European Central Bank.”In particular, Breton criticised the explosion in the French national debt during Sarkozy’s term of office:

“We had a crisis management between 2007 and 2012 that was one of the worst of all European countries. France’s debt has been increased by €600 billion. We fell way behind Germany.”

In the next part we will look at Breton’s close connections with another prominent French political figure, the “killer-shark” Christine Lagarde, former head of the IMF and now Director of the European Central Bank.

11.22.19

Understanding Thierry Breton: More Influential Friends in High Places

Posted in Europe, Finance, Patents at 2:11 pm by Dr. Roy Schestowitz

Overview

Understanding Thierry Breton

Further parts pending review and research


Lagerfeld and Breton
Bernadette Chirac, Karl Lagerfeld, Valerie Breton and Claude Pompidou attend the Chanel Haute Couture Fall-Winter Fashion show during Paris Fashion Week in Paris (6 July 2006).

Summary: “So it comes as no surprise to find Valerie and Thierry rubbing shoulders with members of the Rothschild family at social events.”

As we saw in the last part, Thierry and his wife Valerie have a penchant for attending “high society” events organised by the likes of the LVMH Foundation.

Another of these foundations is the Pompidou Foundation which was set up in 1970, by Claude Pompidou, widow of Georges Pompidou who served as Prime Minister under Charles de Gaulle from April 1962 to July 1968 and as President of France from 1969 until his death in 1974. Before entering politics, Pompidou was the general manager of the Rothschild Frères bank having been recruited by Guy de Rothschild from his job as a teacher in 1953.

“Before entering politics, Pompidou was the general manager of the Rothschild Frères bank having been recruited by Guy de Rothschild from his job as a teacher in 1953.”The Claude Pompidou Foundation was set up by Pompidou’s widow in 1970 to help disabled children, the elderly and hospitalised.

The foundation has close links with the Chiracs, another prominent political family aligned with the UMP.

Claude Pompidou with Jacques Chirac
Claude Pompidou with Jacques Chirac in September 1999.

Jacques Chirac served as the Treasurer of the Foundation for over three decades.

“As we’ll see later on, Thierry Breton also has some close connections to another former French President of the European Patent Office, the notorious Benoît Battistelli.”His wife Bernadette Chirac, a regular guest at Foundation events, took over as president of the Foundation, following the death of Mme Pompidou in 2007.

In March 2008, Valerie was spotted sharing a table with the bon viveur Prof. Alain Pompidou, the adopted son of George and Claude Pompidou, at a Gala Evening organised by the Friends of The National Museum of Modern Art at the Centre Pompidou in Paris.

Valerie Breton with Alain Pompidou
Valerie Breton with Alain Pompidou at the Centre Pompidou in Paris (March 2008)

This was shortly after Prof. Pompidou had returned to Paris following a three-year sojourn in Munich as President of the EPO between July 2004 and June 2007.

As we’ll see later on, Thierry Breton also has some close connections to another former French President of the European Patent Office, the notorious Benoît Battistelli.

Before concluding our look at his influential friends in high places, it’s worth recalling that the former Minister for the Economy spent a brief period as a “senior advisor” to Rothschild & Cie Banque after he finished his stint in Bercy in 2007 and before he moved to Atos in 2008.

So it comes as no surprise to find Valerie and Thierry rubbing shoulders with members of the Rothschild family at social events.

Rothschilds and Bretons
Valerie and Thierry rubbing shoulders with the Rothschilds
From left to right: Éric de Rothschild, Arielle Malard de Rothschild, Philippine de Rothschild

It’s time now to turn our attention to Thierry’s connections in the world of French politics and we will start by looking at a bromance that failed to stand the test of time.

11.21.19

Understanding Thierry Breton: Socialising With the Elite

Posted in Europe, Finance at 11:33 pm by Dr. Roy Schestowitz

Overview

Understanding Thierry Breton

Further parts pending review and research


Breton with elites
Thierry and Valerie at a gala organised by Friends of the Paris Opera (2005)

Summary: “Bernadette Chirac is not the only Presidential widow with whom Valerie has close connections.”

You might be inclined to think that he would have little spare time in his day job as CEO of Atos but, outside of business hours, Thierry and his wife Valerie, seem to have an even more punishing schedule.

There’s a never-ending round of social events to be attended such as charity dinners, operas, gala performances and other glitterati “love-ins” where they can be seen rubbing shoulders with the great and good of the French elite.

Bernard Arnault and Breton
From left to right: Thierry Breton, Bernard Arnault, Hélène Mercier and Valerie Breton.
In the background, Gautier Capuçon, cellist associated with the Louis Vuitton Foundation.

Many of these events are sponsored by the multinational conglomerate LVMH and Thierry and Valerie can often be spotted basking in the glow of France’s Lord of Luxury, LVMH CEO Bernard Arnault, and his Canadian-born wife, Hélène Mercier.

“During a state visit to India in February 2006 Valerie accompanied France’s First Lady, Bernadette Chirac, on her sight-seeing tours including a boat trip up the Ganges.”Another prominent guest who features at these events on a regular basis is Bernadette Chirac, wife of the late Jacques Chirac. Valerie has been a trusted confidante of Bernadette since Thierry’s time as Finance Minister from 2005 to 2007.

During a state visit to India in February 2006 Valerie accompanied France’s First Lady, Bernadette Chirac, on her sight-seeing tours including a boat trip up the Ganges.

Bernadette Chirac and Breton
Carry on up the Ganges: Valerie Breton and Bernadette Chirac on a boat trip in February 2006

The contact forged between Valerie and Bernadette during Thierry’s term in the Chirac government has lasted down the years and the pair regularly appear together in “high-society” photo-ops.

For example, in November 2010 they both attended the Dior Jewellry Boutique Party at Place Vendôme in Paris where they were photographed in the company of Gautier Capuçon, a cellist associated with the Louis Vuitton Foundation, and his wife.

Bernadette Chirac and the Bretons
Valerie Breton, Gautier Capuçon and wife, Hélène Mercier-Arnault and Bernadette Chirac.

Dior, or Christian Dior SE to give it its full title, is a French luxury goods company controlled and chaired by French businessman Bernard Arnault, who also heads LVMH, the world’s largest luxury products group.

As we shall see in the next part, Bernadette Chirac is not the only Presidential widow with whom Valerie has close connections.

Understanding Thierry Breton: Thierry and the $100 Billion Man

Posted in Europe, Finance at 11:28 am by Dr. Roy Schestowitz

Overview

Understanding Thierry Breton

Further parts pending review and research


Bernard Arnault
Bernard Arnault – a trusted friend of Thierry Breton

Summary: Thierry Breton’s connections to the tax avoidance ploy of his friend Bernard Arnault

You might have thought that all that wheeling and dealing as Atos CEO would be enough to keep anybody fully occupied. But not so with our Thierry…

Since 2008 he has also been busy helping out his trusted friend, French billionaire Bernard Arnault by chairing the governing committee of Protectinvest, a private foundation set up to safeguard the integrity of the French multinational luxury goods conglomerate LVMH.

Arnault, who controls LVMH through a cascade of companies including Groupe Arnault, his private family holding company, set up the private foundation in Belgium in 2008 to prevent his five children from selling LVMH shares if he were to die within the next 10 years.

“It seems to be some kind of tax avoidance vehicle that was set up in Belgium just as France was preparing to introduce a 75 % “supertax” on incomes in excess of € 1 million after the election of François Hollande as President in 2012.”The statutes of Protectinvest state that it “has as its disinterested aim, assuming the death of Mr Bernard Arnault and until October 23 2023, of protecting directly the financial and family interests of the Pilinvest company”.

Pilinvest is another Belgian-based holding company owned 99.99 per cent by Mr Arnault.

It seems to be some kind of tax avoidance vehicle that was set up in Belgium just as France was preparing to introduce a 75 % “supertax” on incomes in excess of € 1 million after the election of François Hollande as President in 2012.

Arnault transferred his 31% stake in Groupe Arnault, the family firm that runs LVMH, to Pilinvest in December 2011. At the time the stake, was valued at € 6.5 billion. In November 2013, the Belgian authorities started an investigation into Pilinvest.

“In November 2013, the Belgian authorities started an investigation into Pilinvest.”In 2017, it was reported that Arnault had accepted a deal to end the case “without any prejudicial admission of guilt on his part”.

By a curious coincidence, Thierry Breton is also listed as a director on the board of Carrefour the French multinational hypermarket retailer in which Groupe Arnault holds a 16 per cent stake jointly with Colony Capital of the US.

LVMH
LVMH’s Lord of Luxury

Breton’s connection with LVMH’s lord of luxury also provides a useful springboard for socialising with the great and good of French “high society” as we shall see in the next part.

Understanding Thierry Breton: Atos Healthcare – “The Ugly Face of Business”

Posted in Deception, Europe, Finance at 3:27 am by Dr. Roy Schestowitz

Overview

Understanding Thierry Breton

Further parts pending review and research


Atos comparing

Summary: “…2,380 people died after their claim for employment and support allowance (ESA) ended because a work capability assessment (WCA) found that they were found fit for work.”

Atos Healthcare ended up at the centre of a major public controversy in the UK as a result of its provision of Work Capability Assessment (WCA) services for the Department for Work and Pensions (DWP).

The company became a lightning rod for public anger over the WCA scheme which was criticised by MPs and campaigners as inhumane.

Health assessments conducted by Atos were mired in controversy, including complaints over the qualifications of assessors, as well as the criteria used to determine fitness for work.

“In another case, a woman with stage 4 cancer, who was suffering from hair loss undergoing chemotherapy, was told she was also able to get a job, and had her benefits slashed.”Thousands of vulnerable people were found to have been wrongly judged to be fit for work and ineligible for government support. In one case, a dying father, 34, diagnosed with emphysema was told that because he could “push an empty box” he was “fit for work”. In another case, a woman with stage 4 cancer, who was suffering from hair loss undergoing chemotherapy, was told she was also able to get a job, and had her benefits slashed.

In 2013, Greg Wood, a former navy doctor decided that he could no longer tolerate working for the company and blew the whistle on practices within Atos after he was asked to change a report he had made on a claimant, in this case making it unlikely that the individual would be eligible for sickness benefit.

Wood left because he considered that the company was acting unethically by putting pressure on a doctor to change the conclusions of an assessment.

“Wood left because he considered that the company was acting unethically by putting pressure on a doctor to change the conclusions of an assessment.”His decision to spill the beans made headlines in the UK because he was the first Atos-employed doctor to put his career on the line and articulate concerns about a system that had been criticised by charities and claimants for years.

Wood gave strong evidence to the BBC to suggest that the methods used to assess whether individuals were eligible for the new incapacity benefit – employment and support allowance (ESA) – were “unfair” and “skewed against the claimant”.

The DWP’s own statistics revealed that in 2011 10,600 people died within six weeks of being found fit for work by Atos and another 2,200 died before their assessment was complete.

“The DWP’s own statistics revealed that in 2011 10,600 people died within six weeks of being found fit for work by Atos and another 2,200 died before their assessment was complete.”It was reported that the Government had refused to publish statistics for 2012/2013 and had rejected a Freedom of Information request submitted by Mike Sivier of the Vox Political blog on the grounds that was ‘vexatious‘.

However, following a ruling by the Information Commissioner’s Office in April 2015, the DWP released statistics which revealed that, during the period December 2011 and February 2014, 2,380 people died after their claim for employment and support allowance (ESA) ended because a work capability assessment (WCA) found that they were found fit for work.

Atos protest
Dodgy health assessments by Atos led to widespread outrage and protests in the UK

In February 2014 it was reported that Atos was endeavouring to secure an early exit from its WCA contract, which was due to expire in August 2015.

Atos claimed that there had been about 163 incidents of abuse or assault on staff each month during the previous year and that it had found comments on social media accusing staff of being “murdering scumbags” who “won’t be smiling when we come to hang you”.

A month later the DWP confirmed that it had agreed to an early exit from the existing WCA contract after raising concerns about the quality of the work conducted by Atos.

“…2,380 people died after their claim for employment and support allowance (ESA) ended because a work capability assessment (WCA) found that they were found fit for work.”However, as of October 2016 Atos was still undertaking work for the DWP in assessing Personal Independence Payment applications.

When Atos took over administering PIPs its estimates of how fast claims could be processed were over-optimistic as were estimates of how easily claimants could get to assessment centres. This led to delays in assessments, distress to claimants and unexpectedly high costs and to accusations that Atos had misled the government over its capabilities for processing claims.

In 2017 revelations that Atos and Capita were on target to be paid more than £ 700m for their five-year PIP contracts, and significantly more than the original estimate of £ 512m, led to accusations that the DWP was “rewarding failure”.

In December 2015, a report by the parliamentary Public Accounts Committee singled out Atos for its failure to show “an appropriate duty of care to the taxpayer” over an IT system designed to allow the extraction of data from all GP practice computer systems in England. The costs of the system, which started five years late, ballooned from an initially estimated £ 14m to a final total of £ 40m.

“The costs of the system, which started five years late, ballooned from an initially estimated £ 14m to a final total of £ 40m.”As a result of this “IT cockup”, the Public Accounts Committee urged the Cabinet Office to review Atos’s relationships as a Crown supplier, and to ensure the reasons for the project’s failure were “disseminated widely to reinforce the steps that need to be taken to avoid such mistakes being repeated again”.

In December 2016, Liberal Democrat leader, Tim Farron questioned how Atos and Capita could have been paid over £500m from tax payers money for assessing fitness to work in view of the fact that 61% who appealed won their appeals.

Farron stated, “This adds to the suspicion that these companies are just driven by a profit motive, and the incentive is to get the assessments done, but not necessarily to get the assessments right. They are the ugly face of business.”

OH Assist
If your reputation is in shreds, it may be time to rebrand…

By 2014, the Atos brand had become so toxic in the UK that Atos Healthcare “reinvented” itself as OH Assist. The Atos Healthcare brand was reserved for use in connection with activities relating to the PIP contract.

In 2016 it was announced that Atos had sold off the OH Assist business to CBPE Capital.

One positive outcome finally emerged from the Atos Healthcare saga in April 2017 when the Scottish government adopted legislation prohibiting the use of private firms for carrying out benefit assessments in Scotland.

“One positive outcome finally emerged from the Atos Healthcare saga in April 2017 when the Scottish government adopted legislation prohibiting the use of private firms for carrying out benefit assessments in Scotland.”Social Security minister Jeane Freeman declared that profiteering companies had no place in assessing a person’s fitness to work:

“One of our fundamental principles is that profit should never be a motive nor play any part in assessing or making decisions on people’s health and eligibility for benefits.”

In the next part we will return to Thierry Breton and explore some of his connections with the upper echelons of French plutocracy.

11.20.19

Understanding Thierry Breton: What Thierry Did Next…

Posted in Europe, Finance at 9:40 am by Dr. Roy Schestowitz

Overview

Understanding Thierry Breton

Further parts pending review and research


Thierry Breton at Atos

Summary: “Whether by coincidence or not, when Atos announced in 2010 that it would acquire Siemens’ IT unit, it was the 32-year-old Macron at Rothschild who advised Breton on the deal.”

The wikipedia.org entry for Thierry Breton describes his departure from political office and his return to the world of private enterprise as follows:

“After two years of government service (2005–2007) he became in November 2008 the active chairman and CEO of Atos S.A., formerly Atos Origin. On the announcement of his nomination the share price, which was previously valued at 18 euros, rose by 7.84%.”

Well that’s nice to know, isn’t it?

“At the time of writing, the website is offline probably in an attempt to block any inquisitive researchers while Thierry’s candidacy for EU Commissioner is under scrutiny.”But what exactly was Thierry up to between May 2007 when he left Bercy and November 2008 when he moved into the CEO’s office at Atos?

According to Wikipedia, after leaving the government, Breton “briefly worked as professor at Harvard Business School (2007–2008) where he taught Leadership and Corporate Accountability (LCA).”

This is corroborated by the Financial Times report of 11 July 2007: “French finance minister heads for Harvard”.

Breton’s own website confirms the Harvard story. At the time of writing, the website is offline probably in an attempt to block any inquisitive researchers while Thierry’s candidacy for EU Commissioner is under scrutiny.

Thierry is offline
The website https://thierry-breton.com is currently inaccessible.
Is somebody trying to hide something?

However, with the help of Google’s web cache of the site we learn the following:

“Most recently, before joining Atos, he was a professor at Harvard Business School, teaching leadership and corporate accountability.”

“Thankfully we have the French establishment mouthpiece Les Echos to help us join the dots.”But there is a gap in the narrative. One small but interesting detail is missing…

Thankfully we have the French establishment mouthpiece Les Echos to help us join the dots.

In September 2007, Les Echos informed its readers that the former Minister for the Economy had taken up a position as a “senior advisor” with the renowned French bank Rothschild & Cie: Thierry Breton devient « senior advisor » chez Rothschild

Rothschild and Cie

At Rothschild & Cie, Breton was part of a team of three senior advisers that included the chairman of Rothschild’s German branch, Klaus Mangold, who from 2007 to 2019 sat on the board of directors of Alstom S.A., a French multinational company operating worldwide in rail transport markets, active in the fields of passenger transportation, signalling and locomotives.

Shortly after Breton moved to Rothschild & Cie, an up-and-coming boy-wonder by the name of Emmanuel Macron decided to leave the security of his civil service post at the Ministry for the Economy, to take up a more dynamic private sector job at the this prestigious financial institution.

“Whether by coincidence or not, when Atos announced in 2010 that it would acquire Siemens’ IT unit, it was the 32-year-old Macron at Rothschild who advised Breton on the deal.”Macron, a graduate of the elite ENA, had worked at the Inspection générale des finances (IGF), a key department of the Ministry for the Economy, between 2004 and 2007. This overlaps with Breton’s term of office as Minister so it’s a fair bet that their paths already crossed at some point during that time.

Whether by coincidence or not, when Atos announced in 2010 that it would acquire Siemens’ IT unit, it was the 32-year-old Macron at Rothschild who advised Breton on the deal.

In August 2014 Macron departed from the private sector to enter the political arena as Minister for Economy in the Socialist government of Prime Minister Manuel Valls.

We will revisit the Macron connection later on but for the moment let’s stick with Breton’s post-ministerial business career at Atos.

In 2008 Atos had 50,000 employees and generated a sales revenue of € 5.5 billion but according to Breton it was “managed too compartmentally” and the company’s inferior profitability margins relative to its competitors required a complete transformation plan.

It was another golden opportunity for the “turnaround king” to flex his managerial muscles.

In July 2011, with a little help from his “friends” at Rothschild & Cie, Breton orchestrated the acquisition of the IT activities of German industry group Siemens.

“It was another golden opportunity for the “turnaround king” to flex his managerial muscles.”This elevated Atos to rank number one among the European IT services players and in the Top 5 worldwide, with 75,000 employees in 42 countries.

The deal, valued at € 850 million, was the biggest Franco-German transaction since an alliance between Germany’s premium carmaker Daimler and France’s Renault established in 2010. The move was greeted by the financial markets and the Atos share price rose by 11.6%.

With the integration of 28,000 Siemens employees Atos became one of the most important Franco-German industrial collaborations since Airbus, manifested by a financial partnership (Siemens took 15% of Atos’ capital), and a common investment fund of 100 million euros was created as well as a joint response to international tenders. This strategy was awarded the prize for Industrial cooperation by the Franco-German Chamber of Commerce and Industry.

In 2012 Breton adopted the Societas Europaea legal form for Atos which gave the company two headquarters, one in France and a second in Munich, Germany.

In parallel, he participated in other European institutional projects in which the Franco-German partnership played a central role such as the European Commission’s European Cloud Partnership (2012–2014) over which he co-presided with Jim Snabe, the joint CEO of the German software company SAP.

In May 2014 Breton initiated the takeover of French IT industry player Bull, where he had first made his mark as a “turnaround wizard” in the 1990s. The aim was to turn Atos into a global player in Big Data and Cybersecurity and to enable Atos to position itself in the supercomputing segment by becoming the sole European manufacturer of such equipment.

“This elevated Atos to rank number one among the European IT services players and in the Top 5 worldwide, with 75,000 employees in 42 countries.”Six months later Atos announced the acquisition of Xerox’s IT outsourcing activities along with a strategic partnership with the American company. This operation made Atos one of the five largest digital companies in the world.

Within the space of six years the company had doubled in size to a headcount of around 100,000 employees.

By May 2015 the company’s market capitalization had risen to € 7.29 billion euros, an increase of more than € 5 billion compared with November 2008 when Breton took over as CEO. The market share price of Atos grew by 268% in five years.

But the success story of Atos has a darker side which is likely to be familiar to UK readers.

“But the success story of Atos has a darker side which is likely to be familiar to UK readers.”Along with other big corporate “service providers” like Serco, G4S, Capita, Amey and Carillion, Atos was one of the main beneficiaries of government largesse in the area of public service “outsourcing” during the late 1990s and the first decade and a half of the new millenium.

In the next part we will take a look at how Atos became a toxic brand in the UK because of its dubious role in assessing disability benefit eligibility.

11.19.19

Understanding Thierry Breton: Noël Forgeard and His “Golden Parachute”

Posted in Europe, Finance, Fraud at 10:36 pm by Dr. Roy Schestowitz

Overview

Understanding Thierry Breton

Further parts pending review and research


Forgeard in trouble
Wikileaks cables revealed that his German colleagues regarded Forgeard as an “over-ambitious maniac”.

Summary: The end of the first half of the Breton series; in this particular part we continue to cover the EADS scandal and the second half of this series will include the EPO connections (the vote in a plenary for Breton’s nomination is due 27/11)

When Noël Forgeard, the French co-CEO of EADS, was compelled to resign in June 2006 he received a severance package in the form of € 6.1 m euros in remuneration – more than two years’ salary – along with a non-competition indemnity package payable over two years which was worth an additional € 2.4 million euros.

This “golden parachute” was widely perceived as being overly generous and it caused public outrage in France and Germany, particularly among EADS/Airbus staff.

“The 2007 French Presidential election was in progress at the time and this combination of circumstances led to a heated political debate about executive remuneration in the land of “Liberty, Equality and Fraternity”.”The controversy was aggravated by the fact that details of the severance package became known in April 2007 at a time when the EADS group was seeking thousands of job cuts as part of a massive turnaround plan to recover from a two-year delay to the superjumbo that wiped some € 5 billion off its profit forecasts for 2006-2010.

Fabrice Remon, president of a minority shareholder association commented as follows: “It’s shocking about Forgeard because of the conditions under which he left. … What’s shocking in France is that the parachutes are independent of the performance of the executive.”

The 2007 French Presidential election was in progress at the time and this combination of circumstances led to a heated political debate about executive remuneration in the land of “Liberty, Equality and Fraternity”.

“During this time, a number of reports appeared in the French media exposing the role played by Thierry Breton in the “golden parachute” affair.”The Socialist candidate, Ségolène Royal, said that she was scandalized by the amount of the severance package and called Forgeard’s golden parachute “a scandal, a provocation, especially in this company, where the state is a shareholder”.

The centrist candidate, François Bayrou, said that such severance packages “damage the image of business” and he promised, if elected, to champion a law that would “require transparency in economics, decision-making in general assemblies, instead of a capitalism of convenience where everything is decided in small groups”.

Nicolas Sarkozy, the centre-right candidate who was eventually elected as Chirac’s successor, called on Forgeard to return his severance package calling the matter a “question of ethics”.

During this time, a number of reports appeared in the French media exposing the role played by Thierry Breton in the “golden parachute” affair.

Forgeard landing
As Foregard descends with his “golden parachute” he is greeted by an angry crowd of citizens and politicians brandishing a banner with the slogan “No to golden parachutes” which leads him to ponder that he would have been better off staying in his Airbus.

The current affairs magazine Challenges broke the story in April 2007 by revealing that Breton had out-manouevred Manfred Bischoff and Arnaud Lagardère of the Board of Directors who had been strongly opposed making a severance payment to Forgeard.

According to Challenges, Breton had personally intervened in favour of Forgeard and exerted pressure to ensure that he received his “golden parachute”.

EADS Directors
EADS Directors Bischoff and Lagardère – outmanoeuvred by Thierry Breton.

The story was quickly taken up by other media (here, here, here, here, here and here) and there were cross-party calls for Breton’s resignation from the Secretary of the Socialist Party, François Hollande and from the centrist Presidential candidate François Bayrou.

“In the end, Breton did not have to resign. He was left to serve out his term of office which ended shortly afterwards on 15 May 2007.”Challenges returned to the story in May 2017 a month after its initial report. It noted that Breton had strenuously denied that he had made any intervention on behalf of Forgeard and that he considered it “scandalous” that he could be suspected of such impropriety.

In the end, Breton did not have to resign. He was left to serve out his term of office which ended shortly afterwards on 15 May 2007.

However, despite a recommendation from the outgoing President Jacques Chirac that he retain the services of the “turnaround king” at Bercy, the President-elect, Nicolas Sarkozy, decided not to keep him on his team.

“…it is also possible that Sarkozy regarded Breton as a political liability at that point in time due to his alleged involvement in the “golden parachute” controversy.”
It’s not clear what exactly motivated Sarkozy’s decision to drop Breton. Some commentators attributed this to Breton being overly close to Chirac faction of the UMP which was at loggerheads with Sarkozy. However, it is also possible that Sarkozy regarded Breton as a political liability at that point in time due to his alleged involvement in the “golden parachute” controversy.

Whatever the truth of the matter may be, the ministerial career of “Chirac’s joker” came to an end with more of a whimper than a bang.

In the next part we will turn our attention to what Thierry did next.

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