ECHEC DE SCANDALE

Socialism and scandal are not mixing well in France.

Diana Geddes reports

Paris THERE has been so much excitement in the French press and on television over the Pechiney insider dealing affair that one sometimes tends to forget that what sets the Paris 'diners mondains' on fire is not always the hottest topic of conversation in the cafés of the 'France profonde', and therefore will perhaps not have the elector- al impact that is expected.

As the press has continued to dig out new tit-bits in the Pechiney affair, so people have (inevitably) begun speaking of it as a French version of Watergate. Eager questions have been asked about Mitter- rand's ability to survive the scandal. Some have even suggested that it is part of a deliberate American plot to destabilise the French government. Those suspicious were apparently strengthened by an editorial, published in the Wall Street Journal on the day of President Bush's inauguration, sug- gesting that 'the new [American] Adminis- tration may have an early opportunity to topple the socialist government in France — not with the CIA, of course, but with the Securities and Exchange Commission (SEC).' It was meant to be taken tongue- in-cheek, but was treated with anxious seriousness here.

It was the SEC, the American stock- exchange control body, which first sound- ed the alarm last December of the possibil- ity of insider trading involving the take- over of American National Can, the Triangle packaging subsidiary, by Pechiney, the French state-owned alumi- nium company. It is likewise from the SEC that more revelations are now awaited following the failure of France's own stock- market regulatory authority, the Commis- sion des Operations en Bourse (COB), to elucidate the affair.

No one had really expected the COB, with its very limited means and powers, to be able to do very much. It was neverthe- less interesting to witness the surprise and relief expressed in all quarters here last week when it published a report of its investigations which, while not revealing anything new, let alone explosive, was nevertheless generally considered serious and honest. At least the COB had tried which was more than many people had expected. The French have come to expect all their many political scandals to be quietly stifled. The COB confirmed that there was strong circumstantial evidence of insider trading and gave the names of six suspect French buyers of Triangle shares as well as those of some American banks and institutions. But it was unable to provide proof that any of them had in fact acted on illegal inside information rather than on 'Anyway I said, we're going to have to close down your chat line, so do you know what he said to me? You'll never guess in a month of Sundays, he turns round to me, bold as brass. ..' the basis of their own financial expertise and flair. Nor was it able to identify the source of the leaks.

President Mitterrand has become embroiled in the scandal because one of his (genuinely) oldest and closest friends, Roger-Patrice Pelat, a wealthy self-made businessman, is one of the main benefi- ciaries of the affair and therefore one of the main suspects. On Pelat's own admis- sion, he bought 10,000 Triangle shares for around $10 a share just a few days before the Pechiney take-over on 21 November after receiving a tip from his friend and fellow-businessman, Max Theret: He re- sold them a week later for between four and five times that amount.

However, according to Le Monde, Pelat (or his son by the same name) secretly bought a further 40,000 Triangle shares through a -Swiss bank, thereby enabling him to make a killing of around ft million. Pelat has denied this. Le Monde claimed that its information was based on an outline of a confidential report drawn up by the French internal secret service, which had been given to Mitterrand. It was not until three days after the publication of Le Monde's allegations that the Elysee finally put out a statement denying any knowledge of such a report. The president had total confidence in the COB and the courts to reveal the whole truth and to ensure that any culprits were prosecuted, 'whoever they might be', it said. Mitterrand himself, when asked ab- out his friend's involvement when leaving a Paris theatre that same evening, dising- enuously replied that he, like everyone else, 'only know what I read in the press'.

The whole thing began to stink of a cover-up. At that time, no one else had much confidence in the COB — or for that matter in the French courts — to resist political pressure. Mitterrand was known to place loyalty to friends very high in his ethical hierarchy. Was he seeking to pro- tect Pelat, or indeed was he himself direct- ly involved? It would not have been the first time he had been implicated in a political scandal. Could he himself have been the source of the leak about the Pechiney-Triangle deal? Had he personally benefited from the affair?

One thing was certain: he and Pelat were very close. The two had been interned in the same German prison-of-war camp together. They had fought in the same Resistance group. Pelat had introduced Mitterrand to his wife, Daniele, and was the witness at their wedding. He was godfather to their eldest son. The two men hunted together. Their families went on holiday together. It was also with Pelat that Mitterrand went — or rather used to go — on his regular 'incognito' strolls through Paris. Their talk, however, was said to have been much more about pretty girls, in which the two septuagenarians continued to take an active interest, rather than about politics, which did not interest Pelat, or business, which did not interest Mitterrand.

Mitterrand's abhorrence of money affairs is legion. That is why most people do not believe that he is directly involved in the scandal, despite the rumours. He was said to be economically illiterate when he came to power in 1981. He used to rail against the `evils' of business profits and promised a `rupture with capitalism'. He has since changed his tune, but the whole world of business and finance is still not something he enjoys.

It is because of the socialists' past mora- lising over money matters that certain people find the present affair so shocking. As Jean d'Ormesson, the right-wing writer and columnist for the Figaro Magazine, Wrote the other day: 'No government is Immune from scandal. No government is ever eager to tell the truth. But what makes people particularly indignant in the socialists' case is that they never stopped giving other people lessons. . . The social- ists have no luck: when they are honest, they are incompetent; and when they stop being naïve, they cease to clean.' No socialist politician or official has yet been directly implicated in the affair. But the government is necessarily involved in any deal concerning a state-owned com- pany. M. Pierre Beregovoy, the finance minister, was naturally kept informed ab- out developments. It was therefore consi- dered unwise, to put it mildly, for his `directeur du cabinet', Alain Boublil, to continue to keep company with one of the main negotiators for the American camp, Samir Traboulsi, during the delicate nego- tiations leading up to the Triangle- Pechiney deal.

Boublil, who used to be one of Mitter- rand's financial advisers at the Elysee, resigned from his post with Beregovoy on 21 January after suggestions in the press that he could have been the source of the leaks. He had spent three days with Tra- boulsi on his yacht in the Mediterranean last August at the height of the negotia- tions with Triangle. He naturally protests his innocence, claiming that he personally never owned any Triangle shares (though there were, of course, other ways to make money out of the affair).

In Boublil's defence, it should be noted that until the Pechiney affair broke Tra- boulsi was highly regarded by both the Right and the Left in France. He had acted on behalf of former French governments in negotiating delicate arms deals and in securing the release of French hostages from Beirut. Only last October, while the Pechiney-Triangle negotiations were still going on, he received the Legion d'Honnor from Beregovoy. The ceremony was attended, among others, by Robert Mitter- rand, brother of the President, M. Gan- dois, head of Pechiney, and Roger-Patrice Pelat. Now Traboulsi is being depicted as the villain of the piece.

All these affairs are terribly compli-

cated, however. The ordinary man in the street doesn't understand. Nor, apparent- ly, does he really care. An opinion poll last week showed that the great majority of French either don't care about the Pechiney affair or feel that a 'lot of noise is being made over nothing'. Only a third said they felt `indignant'. A mere 12 per cent thought the affair would do lasting damage to the government's image. Rather more thought it would damage the image of politicians in general.