Emmanuel Macron
Emmanuel Macron is a spiv, a first class spiv. Yet Emmanuel Macron is President of the French Republic, which is a worry.
The stamp of the man could have been readily gauged from his curious appointment and period as Economy Minister, August 2014 to August 2016, under President François Hollande and Prime Minister Manuel Valls.
Macron’s first action as Economy Minister was the privatization of the Toulouse-Blagnac airport (SATB). It was a process steeped in anomalies, for which reason it has been the subject of unprecedented court proceedings.
This is a story of deception, incompetence and corruption at the highest levels of the French state. This account is essentially drawn from Laurent Mauduit, tireless investigative journalist with the online daily Mediapart.
Ownership of the airport was held 60 % by the state, and 40 % by local, departmental and regional interests. The privatization process foreshadowed selling 49.9 % of the state’s shares, with the option of later selling to the successful bidder the remaining 10.1 %. The local interests, opposed to the sale in principle, were not consulted.
Toulouse-Blagnac is not merely consistently profitable. The airport is of strategic significance, being the major airport in south-west France, and with a major Airbus installation as neighbour. The airport is an integral dimension of development options and of environmental policy in the city and the region.
Tenders were called on 18 July 2014, formally under Arnaud Montebourg, the then Minister of Industrial Renewal. Montebourg adopted an assertive approach to his portfolio but resigned over the lack of governmental support for his stance, not least regarding the tolerance of GE’s takeover of Alstom Energy. But Montebourg had apparently succumbed to the neo-liberal juggernaut in initiating this airport privatization (albeit he would be disdainful of what followed under Macron).
Macron succeeded Montebourg under a re-badged neoliberalism-friendly Economy portfolio on 26 August 2014. Eight tenderers were reduced to four in a second round. If one had to privatise (one didn’t), three were establishment French consortiums. The fourth was peculiar indeed.
This group comprised a Chinese consortium called Symbiose, consisting of Shandong Hi-Speed Group Co and Friedmann Pacific Asset Management (in turn held by Friedmann Pacific Investment Group FPIG), and the French-Canadian SNC-Lavalin Inc.
SNC-Lavalin has recently been in the news for alleged corruption involving government tenders within Canada, briefly threatening the Prime Ministership of Justin Trudeau. But earlier news is equally significant. In August 2013, the World Bank banned SNC-Lavalin for ten years from tendering for World Bank jobs because of bribery – the strongest sanction ever inflicted by the World Bank. Why then was SNC-Lavalin a member of this tender? (Tragically SNC-Lavalin was once a trustworthy Québécois engineering company, but then the financial minds got a hold of it.)
As a consequence, SNC-Lavalin was forced to drop out. This pull-out occurred on 31 October, the day that the offer was submitted, leaving the Chinese consortium as sole tenderer. SNC-Lavalin at least had infrastructure experience (it was already managing numerous French regional airports), the Chinese consortium had none. The successful tenderer’s character was financial, establishing the basis for a purely speculative enterprise, which is how it transpired.
More, the Chinese companies are part of a cascade of titles under a holding company Capella Capital squirrelled in the British Virgin Islands, with some housed in the Cayman Islands and some routed through Hong Kong. Key figure in this elusive structure is Poon Ho Man (Mike), with his wife Cristina. For the purposes of acquiring Toulouse-Blagnac, a France-based subsidiary of the bidding consortium labelled Casil Europe is created.
On 4 December 2014, Macron announces the sale of the 49.9 % shareholding to Casil Europe. It would be a minority holding only, emphasised Macron. The airport has not been sold, and the physical infrastructure remains in government hands, he insisted. At the same time Macron told local detractors that they should stop whinging and shut up. During an address two days later, Macron denigrated the detractors, claiming that they are of a type that makes a profession out of criticising the government and that this abuse will unsettle the French public.
Behind Macron’s abuse was a lie. Leaked excerpts from a secret document (never publicly released but exposed later by Mediapart) disclose that the state had granted majority powers to Casil although the formal ownership structure entailed a minority holding. Of 15 directors, 6 would be nominated by Casil, with 2 by the state, but the state’s 2 directors would be designated as silent partners of Casil’s direction. The minority investor was given carte blanche as to decision-making.
In the process, key agencies responsible for accountability in public asset privatizations – the Commission des participations et des transferts (CPT) and the Agences des participations de l’État (APE) – capitulated to Macron’s intentions in an abuse of procedure. The opponents of privatization went to the highest relevant court, the Conseil d’État, which ruled in early 2015 that the privatization process was in order.
It gets worse. Casil Europe was incorporated with a token sum of €10,000 in capital. Its address, befitting its fictional character, is also a fiction. The location 6 place de la Madeleine turns out to be a mailbox of the publishing house Wolters Kluwer France, where WKF ‘domiciles’ some 400 companies. This gem reminds me of the 2008 film Louise-Michel, in which two hapless would-be assassins in search of the real-life CEO that ordered the closure of the plant at which the heroine was precariously employed end up at a mailbox in Jersey. A farce built on proverbial ‘real events’!
In the meantime, ownership of Casil changed to Sino Smart Inc, another Hong Kong-based screen company created belatedly in September 2014.
The airport is ceded to Casil on 7 April 2015. The price paid was €308 million, significantly higher than the expectations of outside experts. One analyst speculates whether there had been a secret diplomatic accord between Macron and the Chinese state.
There’s worse to come. Reuters Hong Kong reports in late June 2015 that Mike Poon has disappeared. Cited for corruption, he has been missing for a month. The company involved in the corruption allegation, China Aircraft Leasing, is another subsidiary of Capella Capital. While absent, Poon resigns overnight as Director General of CAL on 17 June.
Poon also took some loot with him. The South China Morning Post reported, 29 June, that Poon had exercised a swathe of options in both China Aircraft Leasing and the company through which he controlled the former, Friedmann Pacific Asset Management.
Why would Macron hand over a strategic public asset to such a bizarre outfit? One can only infer motives from cryptic utterances.
At a meeting of the Association of Infrastructure Investors on 17 October 2014, Macron claims that public infrastructure will be opened in a big way within 18 months.
During Macron’s interview on 4 December 2014, Macron claims that “Those who, at Toulouse, are attached to employment at and the success of Airbus, should think again on their stance. Our country must stay attractive [to foreign investment] because it’s good for growth and employment”.
Prime Minister Valls joins in: “we have to accept that we live in an open economy. Us, we have the right to sell some Airbus planes, to invest in China and the Chinese should not be able to invest on French soil?” He adds, “at the same time, we will preserve of course our fundamental interests. What we do with an airport, we will evidently never do for other industries – for example, nuclear”.
In January 2015, CAL ordered planes from Airbus for a sum of $10.2 billion. A coincidence?
In late June 2015, President Hollande and Prime Minister Valls rolled out the red carpet for visiting Chinese Prime Minister Li Keqiang. The round-the-country jaunt took in the Airbus factory at Blagnac on 2 July. Hollande and Valls were looking for fat contracts with China. Yet at that very time, the airport privatization had already acquired the status of a scandal.
Macron continued to dissemble. Poon’s disappearance was dismissed as a non-event and, in any case, Poon was a minority shareholder in the Toulouse airport. Prime Minister Valls joins Macron in repeating the lies.
In the light of a Toulousian anti-privatization Collective kicking up a huge fuss (their complaints meet with no response from Macron), parliament was also taking interest. Valerie Rabault, the ‘reporter-general’ of the budget (commission des finances) in the National Assembly, expressed concerns to Macron. Surely it was time to reconsider the affair? Early on, Macron ignored Rabault’s inquiry, in spite of the requirement under the Constitution to do so. Macron also consistently declined to be interviewed by Mediapart’s Mauduit.
Fast forward to June 2016 to the Casil shareholders meeting 28 June. The Chinese ‘investors’ want to pay a dividend of €40 million on a 2015 profit of €10 million. They want to strip the airport’s treasury after the first full year of their control. Previous management had been thrifty. With a rough €5 million profit in previous years, half was distributed as dividends and the remainder contributing to a built reserve of €67 million.
The APE is compelled to intervene in this effrontery, and the ‘investors’ lower their sights pragmatically to €20 million, then €17.5 million. The local Collectives (including co-owners) are apoplectic. The state, with its 10.1 % holding, stays silent. The AGM is suspended after court pressure. A shareholders’ meeting belatedly takes place late October 2016 where a sum of €15 million plundered from reserves is ratified. Add €5 million from 2015 profits and the 2016 payola sums to €20 million. For 2017, €7.85 million is distributed, of which €1.5 million from reserves.
The Toulousian Collectives had not been inactive. They are rewarded when, in November 2018, the Cour des comptes (equivalent to the US GAO) judged that the cession by the state of 49.9 % of its holdings to the Chinese consortium was fundamentally flawed. Its report condemned the total lack of transparency of the consortium with its myriad entities lodged in tax havens. It also criticised the APE for not consulting other state instrumentalities competent to judge the character and capacity of the successful consortium. However, the Cour des comptes report softened its critical edge by concluding that the failed process was due to a lack of experience in these matters (rubbish) and that the state got it right next time when the airports at Nice and Lyon were privatized in July 2016 (also rubbish).
A complementary report from Rabault’s parliamentary committee made no concessions. It emphasised the dividend siphoning, the dividends being far in excess of operational profits. This report notes that the dividend payments occupied a central place in the consortium’s strategy, to the detriment of any developmental strategy for the airport. Dangling the China connection, the consortium had mooted a potential direct air link between Zhenghzou and Toulouse. The promise, as with other baubles, was all hot air.
Mauduit claims that, from start to finish, it has always been about financial speculation. With the early displacement of SNC-Lavalin from the bid, there was no airport management expertise in the Chinese consortium. Macron and his team ignored the obvious warning signals. Mauduit notes (Mediapart, 24 January 2019):
‘There is in this affair at least one certainty: this mess is not a product of a spate of instances of bad luck or incompetence. It is the direct consequence of a deliberate strategy, transforming the APE into a kind of investment banker, comparable to that in the private sector, following a sole logic – that of profit.’
In January 2019, the local press reported that Casil was seeking to sell its stake, and for the princely sum of €500 million (it had paid €308 million for the shares). The paper indicated that Casil’s inability to obtain the state’s 10.1 % holding, withheld because of the adverse disclosures, was a key factor behind the attempted sale.
During 2019, there have been further unexpected developments in the courts.
A collective of three Toulousian unions and an environmental group had taken the sale to the Tribunal administrative de Paris (responsible for matters of state). They were repelled in March 2017. They appealed against the decision. On 11 March 2019, the Cour administrative d’appel pronounced in favour of the annulment pure and simple of this privatization – an unprecedented judgment and a huge snub to Macron. Grounds for the decision included the change of composition of the tenderer (SNC-Lavalin’s initial inclusion) and awardee (SNC-Lavalin withdrawal), and the remaining Chinese tenderer’s location in tax havens which violated the principle of equality between tenderers. The court delivered its reasons for judgment on 16 April.
Macron had violated the state’s own guidelines for the privatization of public assets. The administrative tribunal’s decision to annul the privatization implies that signing was illegal, and, at the least, the signatories of the state were incompetent.
However, the court also acknowledged its limited jurisdiction. After the state signed off the contract on 7 April 2015 the matter moved from the sphere of public law to the sphere of private law, into the domain of the commerce tribunals. The ‘public interest’ is an alien concept to the commerce tribunals. The administrative appeal court cannot cancel the contract, however illegal, and its decision only acquires substance if the commerce tribunals come on board.
In any case, the state appealed the decision before the Conseil d’État, entrenching further its original crime. Lawyer and legal scholar Régis de Castelnau claims that Macron himself, at the centre of this scandal, is potentially guilty of misappropriation of public property/funds (un détournement de biens publics), which incurs very heavy penalties under the penal code.
Given the appeal court decision, some of the Toulousian collective, with the same lawyer, went to the Tribunal de commerce de Toulouse to block the sale of SATB shares on offer to a potential purchaser. On 22 March 2019, the judge ruled against the plaintiffs on a technicality (adhering to the defense’s arguments) – that the plaintiffs had no standing in the matter. This is a classic, and arbitrary, delineation of stakeholders – shareholders count but not workers in the enterprise. However, the local shareholder groupings (with a 40 per cent holding combined) subsequently joined the action. The plaintiff’s lawyer is demanding that the key contract determining governance between the state and Casil be made public – a document still under wraps in spite of a favourable decision by the relevant state authority regarding right to document access.
On 3 June 2019 the Toulouse commerce tribunal rejected the call for the sequestering of Casil Europe’s shares, claiming that it had no powers to act thus. It did, however, suspend the shareholder’s AGM to be held on 5 June and all future shareholder meetings unless all shareholders are agreed. The commerce tribunal awaited the decision of the Conseil d’État, In the meantime, Casil Europe was essentially ungovernable.
This public stoush over a corrupt privatization is taking place at the same time that the government (with a compliant majority of wet-behind-the-ears Deputies in the National Assembly) is seeking to privatize Aéroports de Paris (ADP), a massive complex of fundamental national importance.
A new resistance has been spawned in the wake of the weekly ‘yellow vests’ (gilets jaunes) protests, beginning on 17 November 2018 – a movement publicized world-wide. There is a huge popular pressure to subject the proposed ADP privatization to a national referendum – a key vehicle of bottom-up democracy of the yellow vests.
But, for Macron, the protestors are a rabble, to be thrown some minor monetary concessions and ignored. The imperturbable Macron (‘Jupiter’, ‘President of the rich’) continues on his pre-determined agenda regardless, his privatization list including ADP, Française des jeux (the lottery) and the hydroelectric infrastructure.
Three events in the last several months deepen and entrench the scandal.
On 9 October the Conseil d’État validated (anew) the privatization of SATB, indeed the peculiar character and process of that privatization. It overturned the judgment of the Cour administrative d’appel. It labelled the process ‘regular’, explicitly condoning the refashioning of the ‘consortium’ at the eleventh hour to a single dodgy outfit. A disaster for the opponents. Lawyers for the opponents claim that the ruling is transparently political and the court corruptly politicized. They remain defiant, claiming that they will continue the fight – to the European Court of Human Rights if necessary.
With the October ruling clearing the way, a SATB shareholders’ meeting on 5 November voted a dividend distribution of €16.2 million, including the entire profit from 2018 operations. This ongoing plunder was again possible because the two APE representatives of the state, as per the secret pact, deferred to the 49.9 % Chinese owner. Coincidentally or not, that very day Macron was on an official visit to China.
On 11 December the competition regulator (Autorité de la concurrence) gave the green light for the French company Eiffage to buy Casil’s 49.9 % shareholding. Eiffage is one of a handful of construction giants that are floating in rivers of cash flowing from previous governments having sub-contracted the management of France’s autoroutes. These giants dominate the ‘BTP’ (bâtiments et travaux publics) sector and have long prospered from juicy public infrastructure contracts. These same companies are now gobbling up the airports, with minimal airport management experience. Eiffage is already majority shareholder at the Marseille-Provence airport, and it has also recently been granted the concession to run the airport at Lille.
The ruling is dubious, even by the competition regulator’s narrow brief (as elsewhere) regarding potential competitive impact. Both the autoroutes and the airports are gradually being handed over to a rapacious oligopoly, and this with public acknowledgement that the privatization of the autoroutes has been a financial calamity.
The competition regulator has no brief for determining the broader public interest of privately-owned infrastructure. Worse, Eiffage has been secretly handed the same privilege as was Casil, that the state representatives will automatically support Eiffage – the latter’s minority ownership becoming de facto majority ownership, rather than aligning with the 40 % consortium of local interests. The prospective purchase was the occasion for the state to align itself with the local interests to create a majority state and local interest (something that Macron claimed would always hold sway), Not only has the state declined to do so, but it declined, through APE, to inform the local shareholders that it would be business as usual.
Bizarrely, France’s Finance Minister Bruno Le Maire has in the last year gone on a crusade of building the ‘soulful corporation’ in France – a corporate sector with values! He pressed it at Davos in January, and statutes have since been passed in the Assembly. Yet the two state representatives on the SATB Board are under Le Maire’s Ministry, and here they are despoiling public instrumentalities in the interests of private plunder and misorientation of an essentially public asset.
The role of the APE is scandalous in its own right. APE holds share blocks in selected private (e.g. Renault) and public assets precisely as a vehicle to maintain a public interest motif in operations. Yet APE’s share in SATB is used explicitly to thwart the public interest in its operations.
Eiffage put in its bid to buy out Casil in early 2019, but the move was then side-lined by the litigation. Casil wanted €500 million at the time, demanding an almost €200 million capital gain on top of its super dividend appropriations. The investment bank Lazard, France’s largest, is happy to mediate this tainted exchange, because profit goes under no flag. The weekly Le Canard Enchaîné disclosed on 18 December that Eiffage is paying €507 million, an inflated sum, ostensibly for access to one of France’s most important airports.
The privatization of the Toulouse-Blagnac airport on the most cynical, indeed fraudulent, terms was Emmanuel Macron’s first ‘achievement’ as a Minister. There has been no mea culpa for the ensuing scandal that was built into the process’ original conception – on the contrary. In the meantime, Macron has corrupted most institutions of the state towards his ends. One part of the justice system can legitimize this fraud while another part legitimizes the brutal repression of the yellow vests who are protesting against Macron’s dismantling of public services.
Macron is a grifter, brought to power by his rich and powerful patrons. The mainstream Parties of the Right (now les Républicains) and of the Left (Parti Socialiste) have imploded, not least by their wretched performances in the Presidency, respectively, after 2007 and 2012, which ultimately facilitated Macron’s elevation.
There is every likelihood that Macron will win the next Presidential election in 2022. By 2027, France will be unrecognizable, and it won’t be pretty.