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12.02.19

Wikileaks: Thierry Breton May Have Misused Regulatory/Government Positions to Attack His Competition (in the Market)

Posted in Europe, Fraud at 1:10 am by Dr. Roy Schestowitz

Telegram (cable)
It’s always there somewhere, under the radar…

Summary: Thierry ‘revolving doors’ Breton as seen by the United States government

THE FOLLOWING telegram (cable) merits attention. We have not mentioned this in our ongoing series, but it’s another potential scandal from 2005.

To quote the cable in full:


PRICE-FIXING; ECONOMY MINISTER UNDER SUSPICION 
 
NOT FOR INTERNET DISTRIBUTION 
 
1.  (SBU) SUMMARY. France's three main mobile telephone 
operators (Orange, SFR and Bouygues) are being investigated 
by the government's Fraud Office for anticompetitive 
practices.  If found guilty by France's Competition Council 
of a concerted effort to fix calling rates from 1997 to 
2003, they could face fines of up to 10 percent of their 
respective annual revenues.  A decision by the Council is 
expected before the end of the year, according to the August 
24 issue of "Le Canard Enchaine", the French satirical and 
investigative weekly that made the ongoing government 
investigation public.  The weekly hints at least some 
involvement by former France Telecom CEO and current Economy 
Minister Thierry Breton, which could spell trouble for the 
minister and the government. END SUMMARY. 
 
2.  (SBU)  The investigation results from an original 
complaint by French consumer group UFC-Que Choisir in 
February 2002.  The consumer association noted that each 
mobile operator had adopted "strictly identical rates."  An 
investigation carried out by the Economy and Finance 
Ministry's Competition, Consumer Affairs and Fraud Office 
(DGCCRF) documented the allegations further, according to 
"Le Canard Enchaine" in its August 24 issue.   In its May 
2004 report, the Fraud Office found memos and minutes of 
"secret regular meetings" between the three operators to 
allow them to be more reactive to market changes. (Note: 
Orange is owned by France Telecom, Bouygues is privately- 
owned, and SFR is owned jointly by Vodafone and Vivendi.) 
 
3.  (SBU)  "Le Canard" cites many of the operators' 
documents which were never intended to be "communicated to 
outsiders, either to ART, the French telecoms regulatory 
authority or to the Economy and Finance Ministry."  The 
documents further point to the minutes of an October 28, 
2002 meeting between the three operators, in the presence of 
then- France Telecom CEO Thierry Breton.  During that 
meeting, the CEO of FT's mobile unit Orange allegedly 
referred to the "Yalta of market share" agreed by the three 
operators.  An earlier note claims that Breton's predecessor 
Michel Bon had given a green light to the secret agreement. 
 
4.  (SBU)  Finally, according to the press reports, the 
investigation carried out by the Fraud Office concluded the 
(tortured?) reasoning behind the alleged collusion : to keep 
financially ailing Bouygues afloat in order to prevent FT's 
Orange market share from crossing the watershed 49.6 percent 
mark, at which point the regulator would be required to step 
in and set prices.   The Fraud Office's report allegedly 
quotes Thierry Breton as using this explanation in a meeting 
it documents.  FT allegedly feared that if Bouygues went 
bankrupt, most of its customers would move to Orange. 
 
5. (SBU) Breton, who was CEO from October 2003 to 2005, 
before being named Economy and Finance Minister, shepherded 
France Telecom's gradual transformation from a state- 
controlled company to one where the GOF owns approximately 
39 percent.  Mobile operator Orange was a publicly trade 
company in 2000 when France Telecom acquired it from 
Vodafone, in a deal approved by European Commission 
authorities. Under Breton's tenure, FT bought back all 
outstanding shares of the company. 
 
6. (U) Breton and other ministry officials categorically 
deny these allegations.  Breton says the facts being 
investigated took place before he took over at FT, and added 
that France's three mobile phone operators "would have to be 
punished" should any evidence of a price-fixing agreement be 
found. 
 
COMMENT 
------- 
7. (SBU) In the short-term, the allegations against Breton 
could weaken the minister's personal efforts to push for tax 
reform in the fall, and could distract public and press from 
Prime Minister de Villepin's singular focus on employment. 
If it mushrooms, a highly visible scandal involving Breton 
(France's fourth Economy minister in two years) could be 
politically damaging for the Chirac government.  A scandal 
involving one of the new government's leading ministers 
would certainly provide the deeply divided Socialist Party 
with one thing to agree on.  (In parliament next week there 
will be no lack of socialist lambasting of price fixing by 
capitalist fat cats).  Chirac's other rivals and their 
supporters are also lining up to take political advantage of 
the government's weaknesses.  The knives may be even sharper 
next week as much of France returns to work and school. 
 
HOFMANN 

There were several other scandals implicating Breton as a government official, e.g.

  1. Chirac's Entrepreneurial “Joker”
  2. The “Cost-Killer” Tries to Tame the National Debt
  3. “Rhodiagate” and the Vivendi Universal Affair
  4. Insider-Trading Scandal at EADS
  5. Noël Forgeard and His “Golden Parachute”
  6. Thierry and the $100 Billion Man
  7. Thierry & Nicolas - a Bromance That Turned Sour?

Now Breton has a very powerful position in the EU. He has just been given additional duties and powers, according to press reports.

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.

11.18.19

Understanding Thierry Breton: “Rhodiagate” and the Vivendi Universal Affair

Posted in Europe, Finance, Fraud at 4:51 am by Dr. Roy Schestowitz

Overview

Understanding Thierry Breton

Further parts pending review and research


Rhodia logo

Summary: When the “Rhodia affair” became the “Breton affair”

Rhodia was a French speciality-chemicals firm which floated on the stock exchanges in Paris and New York in June 1998 after being spun off from its parent Rhône-Poulenc.

“Stern was found in his apartment in Geneva in February 2005 dressed in a full-body latex suit with his hands tied behind his back and multiple gunshot wounds.”Five years after its debut the company ran into serious trouble. It reported a € 1.3 billion loss following write-downs worth €850m. At one stage its shares had lost 95% of their value since the IPO, reaching a low of € 0.95 in 2004.

The economic downturn was partly to blame but a string of risky and ill-judged acquisitions shortly after its IPO also dogged the company.

At its lowest ebb, Rhodia was confronted with a new phenomenon spreading across Europe – shareholder activism – which in the case of Rhodia was mainly aimed at its acquisitions, for example, the US company ChiRex, bought in 2000 for $ 510m in cash in a deal later described as “the most egregious of the many overpriced takeovers of the time”.

“Meanwhile, at Rhodia the French financial watchdog, Autorité des Marchés Financiers (AMF), opened an official investigation into “misrepresentation of accounts, dissemination of false and misleading stock market information, insider trading and concealment of insider trading” on the company’s accounts between 1999 and 2003.”In 2004, the “Rhodiagate” affair erupted in France when the company became the subject of a French judicial enquiry after two minority shareholders filed a complaint accusing it of false accounting and other malfeasance.

The aggrieved shareholders were Hughes de Lasteyrie du Saillant, a scion of one of France’s oldest noble families resident in Belgium, and Edouard Stern, a French investment banker resident in Switzerland.

Hughes de Lasteyrie and Edouard Stern
Aggrieved shareholders Hughes de Lasteyrie and Edouard Stern whose complaints led to the “Rhodiagate” scandal.

Stern was found in his apartment in Geneva in February 2005 dressed in a full-body latex suit with his hands tied behind his back and multiple gunshot wounds. In the days following the initial reports of murder, the French and Swiss press ran riot with rumors and speculation about possible links between Stern’s death and Rhodia, the Russian mafia, or both. It was reported that a French prosecutor had suggested to Stern that he purchase a gun in the course of the Rhodia affair.

“What caused the most shock waves in France was that the meltdown of Rhodia happened under the noses of some of the country’s most respected business and government leaders.”But the Geneva investigators quickly identified a prime suspect, one of Stern’s paramours, Cecile Broussard, who confessed to the murder which she claimed to have committed in “a moment of passion”.

Meanwhile, at Rhodia the French financial watchdog, Autorité des Marchés Financiers (AMF), opened an official investigation into “misrepresentation of accounts, dissemination of false and misleading stock market information, insider trading and concealment of insider trading” on the company’s accounts between 1999 and 2003.

“Although the two investigations concerned separate matters they were interconnected because the plaintiffs and those potentially implicated were the same in both cases.”The AMF settled the case in June 2007, fining Rhodia € 750,000 and ex-CEO Jean-Pierre Tirouflet € 500,000 for misleading investors about the group’s debt between 2001 and 2003 as well as financial details surrounding its acquisitions.

What caused the most shock waves in France was that the meltdown of Rhodia happened under the noses of some of the country’s most respected business and government leaders. The company’s board from 1998 to 2002 included Jean-René Fourtou, the former Rhône-Poulenc chief executive who was later brought in to restore financial health to media conglomerate Vivendi Universal after the disastrous reign of Jean-Marie Messier.

The affair was particularly embarrassing for Thierry Breton because he had only been in office as Minister for Economy for around four months when the investigating magistrates ordered a series of searches in connection with investigations relating to “Rhodiagate” and the sale of Canal+ Technologies to Thomson Multimedia by Vivendi Universal in 2002.

Although the two investigations concerned separate matters they were interconnected because the plaintiffs and those potentially implicated were the same in both cases.

“At Rhodia, Breton was a non-executive director and member of the audit committee during the period from 1998 to 2002 when the accounts were alleged to have been falsified.”Breton was implicated in both cases because they involved companies where he had been active at the time of the alleged irregularities. At Rhodia, Breton was a non-executive director and member of the audit committee during the period from 1998 to 2002 when the accounts were alleged to have been falsified. He was also chairman and CEO at Thomson Multimedia from 1997 to 2002 when the Canal+ deal was being brokered with Vivendi Universal.

Towards the end of June 2005, a total of 15 raids ordered by the magistrates were carried out by investigators and financial police within the space of 48 hours. The searches covered Breton’s ministerial office, his home, the offices of Rhodia, Vivendi Universal, the home of Vivendi’s supervisory board chairman, the offices of Canal+ television and of the Thomson group. The searches took place while Breton was out of the country on official business en route to a UN conference in New York.

This was the first in the history of the Fifth Republic, that the office of a serving minister had been raided. Breton admitted that he had been “flabbergasted” when he had heard about the raids but he rejected suggestions that his position had been in any way compromised by the operation.

Thierry Breton raid
After a raid on his office by investigators, the Minister for Finance (Thierry Breton) contemplates where he should start cutting public service posts.

Referring to Rhodia, he claimed that he had done nothing wrong. He insisted that none of the information presented by the management or by auditors had “offended my sense of ethics, my rigour and my principles”. He told the French media that he was “just one small administrator among others” and that attempts to implicate him in corporate malfeasance were “a nauseating manipulation”.

“Although Breton tried hard to play down the effect of the raids on his ministerial authority, members of the Socialist opposition insisted that he had been weakened. They called on him to explain himself and argued that, as Finance Minister, he was in a conflict of interest.”Asked about the raid on the offices of Canal+, he said that was “an entirely different matter” and claimed that he had no longer been at the head of Thomson when the deal was concluded.

Although Breton tried hard to play down the effect of the raids on his ministerial authority, members of the Socialist opposition insisted that he had been weakened. They called on him to explain himself and argued that, as Finance Minister, he was in a conflict of interest.

Chirac was particularly vulnerable after French voters’ rejection of the EU’s proposed constitution and, according to the WSJ, the criminal investigation spawned by de Lasteyrie had the “already scandal-scarred government on edge”.

On 30 June 2005, the Wall Street Journal reported that Breton was “on the ropes” recalling that his predecessor Hervé Gaymard had “only lasted four months before he was forced to leave over a property scandal”.

“It was starting to look as if the end was nigh for Breton’s political career.”In July 2005, Les Echos was informing its readers that the “Rhodia affair” had now become the “Breton affair”.

It was starting to look as if the end was nigh for Breton’s political career.

However, as things turned out, reports of his impending political demise were greatly exaggerated and somewhat premature.

At the beginning of 2016, the satirical French weekly Le Canard Enchaîné published allegations that officials at the regulatory authority AMF had toned down criticism of the way officials at Rhodia had managed the accounts in order to protect the Minister for Economy. AMF for its part strenuously denied that it had had “cut passages” that could have been embarrassing for Breton.

Whatever the truth of the matter may be, Breton succeeded in weathering the “Rhodiagate” and Vivendi Universal storms and he remained in office until the end of Chirac’s Presidency.

However, the remainder of his term was overshadowed by turbulences at EADS, including the insider trading scandal and the “golden parachute” affair, which we will look at next.

11.11.19

SUEPO Protests Against Management of the European Patent Office Brought Back Discussions About Corruption

Posted in Europe, Fraud, Patents at 1:36 am by Dr. Roy Schestowitz


Video credit: SUEPO

Summary: The atmosphere at the second-largest institution in Europe has long been toxic; now it is becoming a lot more visible again and comments highlight the reasons for the cover-up (gross misuse of billions of euros)

LAST week was a very busy week that culminated in televised protest against António Campinos, whose policies have been no better than Battistelli‘s. No calm will be restored by such liars. They fool nobody!

“Well done to SUEPO; the protests (two of them in two sites and two weeks apart) got some people talking again about these issues.”Thanks to SUEPO, both in Munich and in Dutch territories (where Mr. Prunier had been made a scapegoat before Campinos came), it’s now perfectly clear to EPO management that the protests are back. The Campinos Delusion didn’t last long. Are delegates (Administrative Council) paying attention? Or are they too busy counting the money they’ve received from the EPO’s coffers, where staff is being gradually robbed while ‘reassured’ by the European Patent Office (EPO)’s Mercer ‘study’ — conducted by a Donald Trump associate with notorious reputation for various real reasons other than the Trump connection?

“Nowadays fake news are not only to be seen in politics, just look over the Atlantic, but one can see them creeping up in an international organisation, but here one wonders to the benefit of whom. The new financial study is just a big fake!”

So said “A friend of the EPO” during the weekend, in this new comment which we’ve annotated with a digital marker below.

It is sad to see the EPO be run into the wall under the “guidance” of pseudo-managers who consider the EPO as the playground of their desire for power by which they try to hide their disgraceful inability.

Nowadays fake news are not only to be seen in politics, just look over the Atlantic, but one can see them creeping up in an international organisation, but here one wonders to the benefit of whom. The new financial study is just a big fake!

By his latest actions, and by keeping in place the most disgraceful minions as well as the staff policy introduced by his predecessor, the actual president has abundantly shown that he has no interest whatsoever in social peace, and he is only there to continue the deconstruction of the EPO started by his predecessor.

It would be interesting to see the contract signed by the past two presidents in order to see how much money they can expect when behaving like an elephant in a porcelain shop.

The next comment spoke of a “conspiracy between those Members and the President can deliver a delightful flow of real money, out of the EPO and into the coffers of the AC Members. In a national organisation there would be a level of legal supervision, transparency, the Rule of Law.”

This is a very major scandal and possibly fraud. Are European officials paying attention? No, instead they're blocking EPO staff. Stay classy, Elżbieta Bieńkowska…

We’ve heard some positive feedback (even from EPO insiders) about our recent coverage of EPO affairs. We receive feedback not only from insiders; stakeholders (attorneys, applicants etc.) are also impacted and they’re not happy. See what goes on with Mrs. AstraZeneca (oh, sorry, I mean Dr. AstraZeneca) over at IP Kat comments. She was being clobbered for UPC spin/lies, connected to the likes of CIPA. Team UPC is, as usual, unable to even argue for its position (defending lies).

A patent attorney, who typically comments in IP Kat, said that s/he has “been watching the EPO for more than 40 years” (a clue about age/seniority level) and the comment as a whole contains some astounding parts, highlighted below. “MaxDrei” said:

As our Friend of the EPO recommends, follow the money. We would if we could but we can’t. And why’s that? Because the former President has helped the members of the Administrative Council of the EPO to see how a conspiracy between those Members and the President can deliver a delightful flow of real money, out of the EPO and into the coffers of the AC Members. In a national organisation there would be a level of legal supervision, transparency, the Rule of Law. But in an international organisation there are no such controls.

https://www.programmableweb.com/news/google-cardboard-now-open-source/brief/2019/11/07If the organisation in question operates in the world of sport, there is public interest. So then there are investigative journalists, whistle-blowers, and lurid headlines in newspapers. No such things worry EPO President and his enablers on the AC though. Not enough public interest to make them even mildly nervous.

Even the users of the EPO couldn’t care less. That’s because they are big corporations (who have more important matters on their minds) and their faithful servants the patent attorneys. They, more than anybody, know who butters their parsnips: their clients, not the taxpayer or the EPO. So they remain knowingly complicit in a swindle, an outrage against transparency, employee rights and the Rule of Law.

The outcome of all this? The AC Members, the President, and those within the EPO who serve them continue to be blithely insouciant.

Like Joni Mitchell warned us: You only know what you’ve got when it’s gone. It’s the things that change so slowly (like the climate) that are hardest to see disappearing. I’ve been watching the EPO for more than 40 years. Until recently, it was something to be admired. But under its immediate past President, it lost a lot. Many had high hopes that the coming into office of the current President could arrest the downward path. What is it that explains his failure? Is he powerless against the AC? Is he too blind to see? Or is he yet another with his snout in the money trough, using his term of office to line his own pockets?

In the past, the UK Member on the AC might have helped the cause. But can you expect that these days, under Prime Minister Johnson.

An election is a month away; need we remind readers that this man’s brother (yes, nepotism) quit his UPC-centric role twice in a couple of years?

The next comment reaffirms suspicions of EPO misconduct; is the EPO defrauding the European public?

Corruption is like cancer cells if you look for it, you will find some. At EPO follow the money fine but how?

As you know with a yearly budget of two billion euros and no genuine checks and balances the EPO is immune to corruption. Surely to increase independency, Battistelli managed to have the administrative council selecting one of his former employees at INPI Paris as one of the three “external auditors” see http://techrights.org/wp-content/uploads/2015/07/epo-people.pdf

This «independent» auditor is still active today. Imagine one sec that a whistleblower reports where to look to find malpractice, what do you think would happen?

For instance, technically it is possible today for ex-top managers having left the EPO to cash EPO funds via consultancy companies created – not under their name obviously. To determine if this is the case, you need a truly independent structure allowed to check everywhere in details (the German did such check years ago with the Deutsche Bahn and guess what, they found corruption).

Another interesting study case: the two married principal directors recruited by Battistelli and who under Campinos are running the EPO recently benefited from a change of title. (Wrongly?) informed top managers report in the corridors that this would have been done to allow a discreet increase of their far too low principal directors’ salaries and bring them at the level of what is foreseen for vice presidents.

With Battistelli’s reforms, transparency and safeguards were removed to allow for discretionary decisions by and for those in charge. Before the reforms, a title was linked to a precise grade and the salary scale for this position clearly defined. Now it’s Christmas all year long with for the happy-few double-steps, functional allowances, bonus you name it. This can be of course a naughty rumour but concretely how to ascertain this is not the case?

Battistelli brought to the EPO the absolute worst of french unhealthy practices and unfortunately, Campinos seems happy with it, as are Germany and the Netherlands as host states, as well as all member states which collect millions of euros of EPO money each year.

Techrights is cited in there, but it’s a SUEPO document.

Well done to SUEPO; the protests (two of them in two sites and two weeks apart) got some people talking again about these issues. As we showed last week (on Thursday morning and afternoon), the EPO’s management went out of its way to create ‘noise’ and distraction in the media. It was only partly successful. IAM repeated its EPO lies yesterday; yes, on a Sunday! It’s that so-called ‘study’ (“SMEs”) and not a word was said about EPO protests! Nothing!!

Here’s what IAM wrote yesterday:

Study released by the European Patent Office sheds light on the growing sophistication of smaller businesses seeking protection for their inventions.

And that’s it! Typical IAM, the copy-paste machine of the EPO. “Follow the money…”

11.01.19

Today’s EPO is Working Against Europe

Posted in Europe, Finance, Fraud, Patents at 8:35 am by Dr. Roy Schestowitz

Money is squeezed out of Europe (to reach the pockets of few perpetrators)

European Patent Office book
From working for Europe to not working for Europe and nowadays to actively working against Europe. Photo/image/meme: Source tweet

Summary: The EPO fiasco needs escalating to European politicians for something to actually happen; under the guise/veil of “diplomatic immunity” serious crimes take place and nobody does anything to hold the criminals accountable

THE European Patent Office (EPO) likely defrauds the European public and even EPO workers. That alone ought to revoke the immunity of António Campinos and put Battistelli under investigation if not arrest (like Sarko, his ally); Battistelli committed many other crimes at the EPO — crimes that we’ve named here over the years, e.g. bringing weapons to the Office.

“Something must be done. The sooner, the better.”It’s not hard to see who the EPO really works for; look what happened near Romania’s State Office for Inventions and Trademarks (OSIM) earlier this week. We wrote about it as recently as yesterday (regarding EPOPIC).

The European Patent Office is again — as days earlierpromoting “AI, self-driving vehicles” patents (warning: epo.org link), i.e. software patents (even in Europe), citing U.S. Patent and Trademark Office (USPTO) directorship as if the EPO works for the US law firms (it works for large US corporations and law firms, which oppose 35 U.S.C. § 101).

Europeans, please contact your MP/MEP about this. Something must be done. The sooner, the better. It’s not going to happen as long as ‘Establishment’ media and blogs in the pockets of law firms continue to ignore/deny the problems because they financially benefit from a rogue status quo.

10.30.19

EPO May be Financially Defrauding the Public and Its Employees

Posted in Deception, Europe, Finance, Fraud, Patents at 5:17 am by Dr. Roy Schestowitz

Time to revoke diplomatic immunity and hold people accountable (culprits in top management positions, falsifying vital information in the public interest)

Cheating

FFII President on EPO yesterday: “this entire body reshaped to fit a structure with accountability, checks and balances, separation of powers, rule of law etc. It certainly is not what we have at the moment and this is the primary reason EPO workers are protesting…”

Summary: Cheating of EPO staff and the European public must mean that the EPO lost its right to that controversial “above the law” status; it’s time for authorities to take swift action and tackle EPO corruption

TECHRIGHTS has covered EPO affairs for a very long time. It’s pretty amazing that nobody from the management of the EPO has yet been arrested. Nobody! There’s the (in)famous saying from Donald Trump about shooting someone in broad daylight; he bragged he would get away with it. Well, that’s like today’s EPO management.

“There’s the (in)famous saying from Donald Trump about shooting someone in broad daylight; he bragged he would get away with it. Well, that’s like today’s EPO management.”Earlier this month Konstanze Richter of JUVE relayed some EPO lies (SUEPO did not link to it). This reinforced the idea or the widespread perception that JUVE is a mouthpiece not of integrity but of the patent microcosm. Just consider the target audience, i.e. the source of income. Here are some portions:

The European Patent Office is facing a huge pension gap of several billion euros in the coming years. Initial proposals for savings also affect future salaries and pension entitlements. The latest EPO financial study has caused further unrest among the workforce.

[...]

Overall, say staff representatives, the newest EPO financial study is based on “unrealistic assumptions.” This applies, among other things, to the expected increase in salaries. Salaries are calculated at 0.5% above inflation in the long-term. Career progression adds another 1.74%.

“It seems very unlikely that the recent negative trend in career progression will turn any time soon,” says the CSC. Only a few employees would actually benefit from the new career system introduced under Battistelli. It is said salaries for new employees in particular have been significantly reduced.

The CSC is quoted, but the journalist also repeats lies from the EPO; isn’t the job of a journalist actually checking the facts rather than parroting the lie and refutation of it? Should they also quote deniers of climate science? In the name of ‘balance’?

“The whole thing has become an embarrassment not just to the EPO and France but also Germany and the EU as a whole.”One person ended up tweeting back to the editor of JUVE [1, 2, 3]:”Congrats, you have been fooled by the EPO! Quote: “a huge pension gap of several billion euros in the coming years”, really? How do they know? Based on what? Studies? These studies are a joke, we all know it. [...] Surprisingly Battistelli, the former EPO President by the way, had claimed the exact opposite at the end of his presidential term, and in doing so has pocketed a fat reward. It sounds like a bad comedy, right?”

Dr. Thorsten Bausch’s (Hoffmann Eitle) latest good article, “Three Myths Debunked,” says that “The EPO is not poor” (in a heading) and this has been mentioned in some circles. He has, for quite some time, watched and commented on the truly corrupt financial moves of Battistelli — moves that António Campinos did not challenge and media did not even mention! Here’s the more relevant part (to us at least):

2. The EPO is not poor

A similar myth that seems to pervade through the heads of the EPO management every other year is that the EPO’s finances are not in good shape and that, as the current Office President put it, “we might face a gap”.

We might indeed, who can deny that? But the relevant questions are (i) when and (ii) under which circumstances/assumptions?

[...]

So everything was in order and “brought under control” in 2018 (so that the past President earned his extra bonus (???)), but only one year later a new study is presented wherein doubts regarding sustainability in 20 years are expressed. (Can one claim the bonus back?)

With this, let us turn back to reality. According to the EPO’s most recent figures (page 9 of this PDFinance_Presentation), the Standardised Operating result in 2017 was a surplus of €366 million. In the year 2018 it was €390 million, a plus of about 6% (don’t ask me why these figures are slightly different from the ones published in the Battistelli report). The productivity of the examiners (Products per Examiner) has likewise increased from 95.5 (2017) to 99.8 (2018) products per headcount. Thus, it indeed seems that the EPO has become more effective (as it was planned by the Battistelli management – note that I am not talking about quality here) and made an operating profit that I would describe as pretty breathtaking.

On top of that, the EPO Treasury Investment Fund (EPOTIF) which was established and activated in 2018 under external asset management control has assets of €2,4 billion, that is 2.400.000.000 EUR. If my understanding is correct, most of this money has been invested on the stock market in shares and bonds. Whether this is right or wrong may be a matter of debate, but the net effect of this policy in the year 2019 was clearly positive: Namely, whereas general interest rates were about zero, both stocks and bonds had a pretty good year and (so far) increased by about 8% from 1 January. Which adds another approximately 200 million EUR to EPOTIF’s asset sheets. Sounds great – but is this sustainable?

I have argued before that I do not perceive it as the core objective of a patent office to make huge profits. In the end, a patent office is to serve the common good, i.e. promoting technological progress by thoroughly examining patent applications and granting patents to those inventions that deserve it. In contrast, it is not a patent office’s task to impose additional liabilities on applicants in the form of fees, just to put the excess earned by these fees on the stock or bond market. It goes without saying that the European Patent Office should be self-financing and receive the money it needs for operating its business and paying the agreed staff pensions to its retired employees, and I have no doubt that the Administrative Council will provide the office with those means by allowing it to raise the necessary fees at any time. (Whether the EPO needs much more than that, e.g. to pay its past President an appreciable extra premium in addition to his generous salary or to sponsor lavish inventor of the year ceremonies, is another matter on which I have commented earlier.)

In any case, I would summarize that it is a pure myth that EPO is “poor” and that active measures would therefore be necessary to cut costs, particularly staff costs and pensions. On the contrary, staff has demonstrably become more effective, so if anything, I would argue that they have rather deserved a reward.

On this basis, it is quite difficult to see a gap anywhere in the EPO’s figures which would justify immediate action. Predictions about the long-term future are notoriously difficult and highly dependent on the assumptions underlying them, which therefore need to be thoroughly scrutinized and discussed. If my understanding is correct, most of the scenarios under which a “gap” has been prognosed seem to assume a global economic recession and slump in the stock market (“decline in equity earnings”) within the next few years, followed by a slow increase. There is also an optimistic scenario under which there would be no predicted gap at all. All of this may or may not happen, I don’t know. With my limited economic understanding, I just wonder one thing: If EPO management seriously believes in any of the more gloomy-gap predictions and thinks it is appropriate to invest a large proportion of both its investment fund and its pension fund on the stock market, would it not be wise to shorten the stocks now, thus generating a buffer, and re-invest after the slump?

The Treasury in Germany’s EPO office (not Berlin but Munich) is lying and cheating; it’s defrauding the public regarding the finances. What does the German government have to say about it? What has the EU said about it? Nothing! Big fat nada.

There’s a bunch of interesting comments so far (on the above article). Here they are with some highlights added:

Thank you Thorsten for highlighting what I believe is an area where increased public engagement and scrutiny are vital, namely the financial dealings of the EPO.

Like you, I can make no sense of the predictions in the 2019 Financial Study. The EPO has HUGE cash reserves and has decided to play with a large portion of those reserves on the stock market. If the EPO is following models of good governance, then it will not be gambling with money that it cannot afford to lose. Thus, one can only conclude that the EPO currently has a significant cash pile that is effectively surplus to requirements.

If the predictions in the Financial Study are to be believed, then one would expect the EPO to: (a) provide robust justifications for the assumptions upon which those predictions are based; (b) identify the causes of the predicted losses; (c) consider a range of options for dealing with the underlying causes; (d) provide robust justifications for the chosen solutions; (e) stop playing on the stock market; and (e) target investments with potentially smaller (but guaranteed) returns.

It has been a while since I read the Financial Study, but my recollection is that it most certainly did not follow the logical approach set out above. Indeed, I recall that one of the most “interesting” predictions used in the Financial Study was an assumption of ZERO increases in EPO official fees for an astonishingly long period of time. Thus, given that the users of the European patent system pretty much expect to cope with regular fee increases, one wonders what the basis was for this rather unbelievable assumption.

Of course, if one were a cynic, one might speculate that the authors of the Financial Study were instructed to identify a set of assumptions that might generate predictions of a potentially perilous financial situation in the long term. The question is, why would anyone provide instructions aimed at achieving a predetermined result?

In situations like this, it is often helpful to ask a simple question: cui bono? Let us consider a number of possible candidates.

EPO staff: it is pretty clear that the EPO’s (non-senior) staff will be the victims of the Financial Study, and not its benefactors. Indeed, it seems that the proposed “cost savings” are to be made entirely at the expense of those staff.

Patent applicants: for this group, it is a mixed picture. On the one hand, they might benefit from a freeze in EPO official fees (though it remains to be seen whether the EPO follows through with such a strange policy). On the other hand, applicants will get much less “bang for their buck” in terms of QUALITY patent examination. That is, with the “production” of EPO examiners constantly being pushed (significantly) upwards, the amount of time that applicants can expect an examiner to dedicate to their case is constantly reducing. Whilst it is possible that a relatively small reduction in time per case can be achieved without a reduction in quality, it is frankly inconceivable that year-on-year cuts will not lead to a lowering of quality (especially in view of the cuts already implemented in recent years).

Fund managers for EPOTIF: this group will undoubtedly be a benefactor of the EPO’s recent policies, and also (it seems) of policies devised in the light of the Financial Study, where “savings” made at the expense of EPO staff will be invested into EPOTIF. The funds invested in EPOTIF are truly enormous. Presumably, therefore, the (private sector) fund managers for EPOTIF will reap large rewards in terms of their fees for managing that fund.

You will note that I have not considered whether EPO management (or AC delegates) are possible beneficiaries. This is because, upon the basis of publicly available information, it is impossible to determine one way or another whether they stand to either lose or gain from the rather strange policies that have been implemented. Nevertheless, I think that it is possible to make a pertinent observation. That is, the only reason that it is possible for the fund managers for EPOTIF to earn huge fees is that the policies implemented by the EPO’s management directed the creation of EPOTIF (as well as continued, significant investments into those funds). This observation may or may not be significant. However, when there are well reasoned doubts about the rationale for creating the fund in the first place (let alone the rationale for predicting a dire financial situation that requires more cash to be squirreled away into EPOTIF), it becomes painfully obvious that there are insufficient safeguards in place that might prevent (or even monitor for) key decision-makers at the EPO from receiving kick-backs from the beneficiaries of their largesse.

I must stress that this is all hypothetical, and that I have absolutely no evidence whatsoever of any wrongdoing on the part of anyone involved in this whole scenario. However, the reason for pointing out the POSSIBILITIES for abuse is that it highlights what I believe could be a very serious failing of transparency and accountability in connection with the governance of the EPO.

“An EPO examiner” then wrote:

Dear Mr Bausch,
many thanks for your well-written articles.
Regarding your 3rd point, it might be time to put the DPMA under scrutiny, too. If the tales of my former colleagues there are correct, the judges at the BPatG are appointed in peculiar ways. In electrical engineering, they are always recruited from G01R examiners, even though there are almost no cases from this class. And if someone is intended to become a judge, he will get this IPC to examine… This has gone on for quite some time, so there is no judge left who has experience with, e.g., electrical machines or some of the other EE specialties…
And in physics everyone knows who is slated to become one of the next judges. And it just pure coincidence that he is the son of a former H1-head and presidung judge…

Maybe we see a general problem with patent offices…
An EPO examiner
PS keep up your great work!

Another person (familiar person, patent attorney “MaxDrei”) said:

Well done VPP. Well done Thorsten Bausch. Well done Wikipedia. Well done Angela Merkel. Well done Bielefeld. And while we are about it, well done Henning Wehn.

It is said in England that Germans have no sense of humour. One more sad sign of parochial ignorance on the island. This particular English reader is heartily fed up with English banter, what passes for English “humour”, and would much prefer the gentle but supremely effective wit of intelligent people like Axel Hacke or Dieter Nuhr. Readers, does anybody know: who are their media counterparts in England?

https://en.wikipedia.org/wiki/Henning_Wehn

Having written many articles about this, I find none of this humourous as there seems to be profound corruption here; there needs to be an investigation, leading to potential arrests. But will that actually happen? Not likely. Where’s Campinos in all this? Covering the back of the thug who gave him this job. The whole thing has become an embarrassment not just to the EPO and France but also Germany and the EU as a whole.

09.28.19

Will Bill Gates’ Bribes to the Leader of India Harm India’s GNU/Linux Adoption and Will Gates Ever be Held Accountable for His Many Crimes?

Posted in Bill Gates, Fraud, GNU/Linux, Microsoft at 8:58 pm by Dr. Roy Schestowitz

Yes and no.

Bill Gates arrested
Bill Gates arrested before he had sufficient connections. Now people are given strategic awards (for corporate agenda of GMO, Microsoft etc.) named after a famous criminal glorified by press that he buys.

Summary: The reckless and likely illegal behaviour of Bill Gates (he was arrested in the past) continues to demonstrate that some people — especially those who bribe officials, media and so on — can get away with virtually anything

THE Stallman 'scandals' (whatever they are; mostly quote-mining very old posts of his), as we’ve just noted, ended his career; moreover, they’ve helped distract from Gates' Epstein affairs, which are the vastly bigger scandal (we wrote about this several times this past month). It certainly seems to boil down to connections, not deeds.

A reader has meanwhile asked us: “You following the Gates Foundation stuff in Kashmir?” He referred to Gates Foundation ‘gifts’ to the most powerful man in India, traditionally a growth area of Free/libre software. Cablegate (or CableGates) showed us what the Gates Foundation did in Tunisia in order to undermine GNU/Linux (OLPC). Bribing officials and heads of state through the Gates Foundation is habitual. Usually it’s not visible. It’s disguised (or laundered) as charity, children, social justice etc.

“It certainly seems to boil down to connections, not deeds.”The media has mostly ignored the aspect or angle of bribery, instead focusing on Kashmir. As the article “problem with the Gates Foundation’s award to Narendra Modi” put it: “Modi campaigned on a populist platform and was elected with a strong majority. He took that mandate and rescinded the special status of Kashmir, a mostly Muslim semi-autonomous region split between India and Pakistan. Modi then sent in police to make mass arrests. He’s also cut off mobile and internet service. At the same time, India is building mass detention camps in the northeastern state of Assam to hold what it considers “illegal immigrants,” mostly Muslim inhabitants who don’t have the paperwork to prove their citizenship. Modi’s rhetoric, meanwhile, has both incited Hindu violence around the country and inflamed tensions with Pakistan, a mostly Muslim country and India’s neighbor.”

“Isn’t it curious that the Microsoft Board can just bribe world leaders through a fake ‘charity’ and the sole scandal the press can see is something to do with Kashmir? And somehow child porn being found in Bill Gates’ home as well as strong ties to Epstein have led to not a single call to “remove Gates”?”Sabah Hamid has meanwhile published (3 days ago in the New York Times) “Why I Resigned From the Gates Foundation” and her reasons are politics, not the bribery. To quote: “Along with other staff at the India office of the Gates Foundation, I first heard about Mr. Modi being considered for the award a few months ago. I did not realize that the decision had already been made. It took me until early August to raise my questions, but I saw very quickly that the foundation had taken the decision and considered it irrevocable. That this endorsement of Mr. Modi would not do the Gates Foundation any good did not seem to be up for discussion.”

Isn’t it curious that the Microsoft Board can just bribe world leaders through a fake ‘charity’ and the sole scandal the press can see is something to do with Kashmir? And somehow child porn being found in Bill Gates' home as well as strong ties to Epstein have led to not a single call to “remove Gates”?

07.25.19

Microsoft Caught Committing Yet More Bribery Crimes, But Nobody Gets Arrested

Posted in Fraud, Microsoft at 12:00 am by Dr. Roy Schestowitz

Same company it was under Ballmer

Steve Ballmer

Satya Ballmer

Summary: Microsoft crimes continue and they pay off; it doesn’t look like the law is in any way applicable to Microsoft executives who resort to criminal activities to deny competitors ‘breathing space’

AT THE European Patent Office (EPO) we’ve already seen how people like Battistelli can commit as many crimes as they want without even risk of arrest. He’s still being protected by António Campinos, to whom he gave his job. Sadly we live in a world where crime pays and crime pays off.

“…Microsoft is trying to get its critics fired from their jobs (we provided several actual examples this year).”A reader has just sent us this article about Microsoft ‘settling’ over its crimes. “The settlement,” it says, “in which Microsoft did not admit or deny wrongdoing, comes after a 2018 Wall Street Journal report that the U.S. Justice Department and the Securities and Exchange Commission were investigating whether Microsoft sold discounted software to Hungarian middlemen who sold it to the country’s government at inflated prices from 2013-2015. Said middlemen fueled the scheme by spending part of their ill-earned gains on kickbacks and bribes to government staff involved in the procurement process.”

Microsoft does the same thing in many other countries. It prevents its competition from gaining ground this way. A $26 million in settlement isn’t a slap on the wrist. It barely even counts as a slap on the finger and it shows that Microsoft can get away with crimes. It rarely ends up being investigated and if they happens it’ll just shell out some money.

This is so very typical. And this is why we’re here — to hold criminals accountable. “There are several reasons I invest time in Techrights,” one reader said publicly this week, “but let’s take a quick look at how such a website came into existence…”

The first thing to consider is the origins. As far as I can tell, TR [Techrights] is heavily influenced by the existence and demise of Groklaw, a valuable website covering efforts by Microsoft and others to defeat free software with patent aggression. If you’re not well-acquainted with the leaked memos from Redmond on this and related subjects, Microsoft acknowledged FLOSS as a serious threat as early as 1998 (also the year OSI was founded) and has since spun idea after idea to attack it, generally through proxies. Techrights started as BoycottNovell, as Novel was one of the proxies Microsoft was using to destroy (among other things) Sun Microsystems and Java.

Java of course, is not destroyed. It is so general-purpose that killing it in several areas has left it extremely useful in others. But Sun is no more. Obviously, a good part of that is the fault of Sun. GKH worked for Novell when it was getting Microsoft money, whether there is any connection there (none that I know of) he is far less sympathetic to the causes Linux has helped and when Linus steps down, things are going to be very different with GKH at the helm.

Speaking of which, the Linux trademark is now controlled by a foundation run by a Windows user, and they have put someone from Microsoft in close to where Zemlin is. This has also happened at Apache, and it happened prior to part of Nokia being gutted by someone who left MSFT, joined Nokia, gutted it and returned to MSFT who were then able to get it more cheaply. How that is even legal is boggling. I personally predicted that Red Hat would be purchased “next” a few months prior to it happening, though thankfully my favourite person there has since resigned. The purchase of GitHub really SHOULD make people paranoid, but the main thing that’s going to happen is it’s going to be used to funnel awareness (marketing) of Non-free software over the free software titles that relied on it before the merger.

Watching a 20-year-long game of corporate chess is boring to many people, but that is the game TR has covered since 2006. The lead writer is several things: 1. a medical researcher with a doctorate whose company works with the NHS, 2. a software developer 3. an avid football fan, and wild speculation in sports about players and teams and ref calls is common.

However, the industry people who used to leak to Groklaw did not merely disappear when Groklaw folded. Microsoft and Apple treat shill journalists at shill outlets just like the OEMs– the two-tier system for press releases keeps most people obedient and less critical, while those with a penchant for actual journalism are denied access and generally let go by companies who want to report on these companies easily and routinely.

A lot of what goes onto the website is gleaned from public articles that are quickly forgotten in the endless churn of marketing and noise– while a fair amount of the “paranoia” is simply reporting from the “inside” that the monopolies are working to silence with new laws and lobbying.

So, I mean, dismiss him if you like. But even if you find the stories (many of which are only readily accessible to people in the industries mentioned, in terms of style and content– though an increasing number are easy for users and free sw developers to relate to) a bit frayed at the edges, if you find a string and tug on it for long enough, you’ll find the sum to be thickly and tightly woven.

One of the deciding factors in my evaluation wasn’t first impressions, but finding out just who takes TR seriously. As for the topics and corruption that led to the founding of the website, you used to (under a slightly different board of directors) find more critiques and rants like his, from the likes of OSI presidents recent and founding– and even the OSI website itself. The OSI board has swept much of that away, at a time when Microsoft is giving is more and more money.

“Everyone has a price,” fluffrabbit says. Not everyone, but an increasing number of key people– I intend to stay informed about these chess moves as much as possible– I consider the future (and present) of GNU/Linux at stake. I’ve spent the past 5 years doing my own research about it. I sometimes contribute to Techrights myself. Of course I don’t expect to change your mind, I thought I’d mention it anyway.

To a lot of those people who have been conditioned to think (indoctrination) that “Microsoft loves Linux” the opinions expressed here may seem ‘unusual’; Microsoft has of course gone out of its way to frame such views as marginal, extreme, irrational. If Microsoft can afford millions in bribery money, why not PR and demonisation money? Heck, Microsoft is trying to get its critics fired from their jobs (we provided several actual examples this year).

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