France Lets U.S. Lead in Corruption Fight

http://www.nytimes.com/2015/04/07/world/europe/france-lets-us-lead-in-corruption-fight.html

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PARIS — France has been an early and eager supporter of international anticorruption initiatives.

It was among the first to sign the Organization for Economic Cooperation and Development’s 2000 Anti-Bribery Convention and the 2004 United Nations Convention Against Corruption, and, in 2009, it led an effort by the Group of 20 nations to bring the world’s tax havens to heel.

But when it comes to putting words into action, France lags behind other Western countries. In October, a working group of the O.E.C.D. said it was “seriously concerned” by the “lackluster response” by the French authorities.

“France is the bad student in the class when it comes to enforcement,” said Daniel Lebègue, president of Transparency International France, who noted that in 15 years, only four French individuals, and not a single company, have been convicted of paying bribes overseas.

The problem is that this has left the field to other countries — notably the United States, which has aggressively pursued American and foreign companies on bribery charges around the world and received a windfall in the process. In the last four years, the United States Department of Justice has taken home more than $1.3 billion in negotiated fines from four major French companies.

The biggest settlement came in December in the case of Alstom, the French engineering giant, which paid the United States a record $772 million, surpassing fines imposed on Siemens of Germany and on American companies including Alcoa and KBR.

The Alstom case came as a shock in France, prompting mutterings about the long arm of the United States, which is able to use its dominance in international finance, and even on the Internet, to claim jurisdiction in foreign cases. All it takes is for incriminating emails to go through American servers, or illicit payments to clear American banks, for a foreign company to be liable under the United States’ Foreign Corrupt Practices Act.

To some, this smacks of extraterritorial bullying. A 2014 report by Eric Denécé, a former French defense analyst who was quoted in the French newspaper Le Monde in January, said that the American sanctions amounted to “an effective weapon” in the “economic war waged by the United States in the rest of the world.”

But that is no excuse for France’s inertia, many experts argue. They say the problem is not that French companies are more corrupt than others, or that France itself is more tolerant of wrongdoing, but that its legal system shies away from the kind of negotiated settlements that are key to getting results in corruption cases. If nothing else, the money flowing into American — rather than French — public coffers should serve as a wake-up call, they say.

“Thanks to the Americans, there is a realization that this situation should change, because if we don’t do the job ourselves, the Department of Justice will do it for us,” said Antoine Garapon, co-author of a 2013 book, “Deals of Justice.”

Other countries, notably Britain but also Germany and Italy, have stepped up their pursuit of foreign bribery, relying on “self-reporting” by the companies themselves, said a former senior European law enforcement official, who spoke on the condition of anonymity because of the sensitivity of his former job. “In France, the notion of negotiated settlements is very suspect,” the retired official said.

Since the Alstom case, there has been a new push for changes in a French judicial system that has historically preferred convictions to negotiated deals.

“In the French system, justice is supposed to be punitive,” said Mr. Garapon, whose testimony in support of a more “Anglo-Saxon” approach was greeted with horror at a recent hearing in the French Senate. “We are in a paradigm shift.”

The greater challenge, he said, is to achieve a unified Western strategy that can tackle the more difficult cases of global corruption. “The great unknown is countries like China and Russia,” Mr. Garapon said. “The stakes are not between the U.S. and Europe.”