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Blowback on French institutional coupling of politics and business

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I found the extended criminal trial over French culpability in the collapse of the large California insurer, Executive Life, in the early 1990s, less interesting as a marker of a declining Franco-American relation than as a window into a very tight coupling of French politics and business (supported by intelligence) that assumes ('presumes' might be a better word) a "political solution" can always be relied upon to sweep away the putative laws and treaties in force between any partner, competitor, and customer.

In a series of court proceedings that predated by far the second Iraqi invasion, one negotiated settlement after another fell through as the French "couldn't accept that there was not a political solution," and that the criminal matter being pursued by US federal court would proceed unimpeded.

Now the French government has pleaded guilty to a criminal count, paid a packet over and above the bailout costs already borne by their taxpayers, and is staring down the bore of 'big money' in the US civil suit to follow. It must astonish the French just as it has, and still does, the Chinese, say, when they expect the US in suppress activities of Chinese dissidents here in the US.

On the reverse, US businesses are lulled into a false sense of security when they go overseas assuming that the 'script as written are the words that make it into the movie.' It does not work that way and US firms need to have a risk mitigation strategy in place when they go so that their investment is protected.

As one who has advised US firms in resisting the deprecations of combined French political, intelligence, and industrial assets in the energy sector, part of our guidance to mid-size energy firms operating in Africa are to:

Be offshore in partnership with at least one other major US player. Third world governments are less prone to interfere with the super majors.

If no US player is possible, be offshore in partnership with at least one major non-US player that has similar interests and risk assessments. Areas where the French have an overwhelming presence carry added risk.

Postwar France has deemed its right to a foreign policy independent of NATO to rest upon its nuclear Force de Frappe and its suzerain over Francophone Africa. France exercises that suzerain aggressively by using all its state and commercial assets. (The French are not all that pleased of our presence in non-Francophone Africa for that matter. Witness our rapprochement with Libya. In a stroke, we divert both Libyan spending and Libyan crude oil to the US -- crude oil that was flowing inexpensively across the Med to France, a point not lost on the US government.)

Do read the article as it is a delicious tale. And do armor up your risk detection and risk amelioration posture when you venture offshore into a region, or an industrial segment, of high value to France.  Or Israel, or Germany, or Russia, or the PRC:

How Insurance Spat Further Frayed U.S.-French Ties
Paris Forks Over $375 Million In Executive Life Dispute; Gucci Owner Pinned Down
California's Civil Suit Looms
By JOHN CARREYROU and GLENN R. SIMPSON
Staff Reporters of THE WALL STREET JOURNAL
April 16, 2004; Page A1

Gordon Housworth



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