I wonder if Chirac can bluff his way through this one. He has been dodging criminal charges for years.
UPDATE 3-Chirac role questioned in Executive Life affair
Fri December 05, 2003 10:51 AM ET
(Rewrites with questions over Chirac role)
By Emmanuel Jarry
PARIS, Dec 5 (Reuters) - French lawmakers demanded answers on Friday over President Jacques Chirac's role in the Executive Life dispute amid speculation he blocked a settlement that did not protect his billionaire friend Francois Pinault.
France this week rebuffed a U.S. offer to settle allegations that the then state-owned Credit Lyonnais illegally purchased assets of the failed California insurer in 1991, including a junk bond portfolio later acquired by Pinault.
Sources close to the matter say France rejected the deal because it did not cover Pinault and ex-Credit Lyonnais chief Jean Peyrelevade. Local French media have reported that Chirac prevented Finance Minister Francis Mer from signing the deal.
"The government must explain its strategy and why it took the decisions it has," said Eric Besson, a deputy for the main opposition Socialist Party.
"Is it true or not that the president gave Francis Mer the order not to sign so as to protect Monsieur Pinault?" he asked.
Besson told Reuters he would raise the matter in parliament next week after a motion to launch a full-blown parliamentary inquiry into the affair was scratched without explanation from the agenda of next Friday's meeting of its finance committee.
"This is going to turn into the Chirac-Pinault affair," said Alain Riou, a senior figure in the opposition Green party, who is also seeking clarification on Chirac's role.
Under U.S. law at the time, banks could not own insurers and state insurance law banned foreign governments from owning California insurers. California's insurance regulator is seeking damages of more than $3 billion on behalf of policyholders.
Chirac was on an official visit in Tunisia on Friday. In October he said France had rejected a preliminary deal signed the month before because it could not accept last-minute changes demanded by prosecutors in California.
DOMESTIC FALLOUT
Suggestions that Chirac may have intervened to help a man thought to be one of three richest in France come at a when his government is defending unpopular budget measures such as tax hikes on cigarettes and fuel.
The friendship between Pinault, 67, and Chirac, 71, dates back to 1981 when the businessman rescued a bankrupt sawmill in Chirac's constituency, saving 20 jobs. In 1995, Pinault hosted an election night dinner for Chirac to celebrate his victory.
Without a settlement, French taxpayers would face a costly court battle that could strain diplomatic ties already frayed over France's opposition to the U.S.-led war in Iraq and could cause Credit Lyonnais to lose its U.S. banking licence.
Industry minister Nicole Fontaine said on Friday France was still optimistic of reaching a settlement.
"We hope talks can continue and we hope talks can lead to a definitive settlement of this affair," Fontaine told Europe 1 radio. "I have high hopes we can reach a reasonable agreement."
Separately on Friday, financial daily La Tribune reported French mutually held insurer MAAF Assurances was close to signing a deal to settle its own involvement in the affair.
MAAF was part of the group of investors assembled in 1991 to buy Executive Life. The paper said the proposed settlement was for a $10 million payment and would not affect a possible deal with other parties.
MAFF declined comment on Friday except to say it hoped for an all-inclusive deal.
-- Additional reporting by Christopher Noble in Paris
reuters.com |
