French billionaire Serge Dassault has gone on trial in Paris at the age of 91. Seven years after the start of the vote-buying scandal in Corbeil-Essonnes, near Paris, where Dassault was mayor, the industrialist and right-wing Senator faces charges at the criminal court in Paris. However in the current trial, which began on Monday July 4th and is due to last four days, Dassault is not charged with electoral corruption – he is still being formally investigated over that. Instead the charges relate to the money he stashed in undeclared foreign bank accounts which is then said to have been brought into France to help buy votes in his home town.
Dassault, a senator for Nicolas Sarkozy's Les Républicains party, chairman and chief executive officer of Dassault Group, owner of Le Figaro newspaper and possessor of France's sixth largest fortune, held two bank accounts hidden from the French tax authorities behind foundations in Liechtenstein, and two others in Luxembourg opened by shell companies registered in the British Virgin Isles. They had no more than 12 million euros in them when Dassault, caught out by the authorities, decided to regularise them in 2014. But Mediapart understands that between 1995 and 2013 the billionaire drew at least 70 million euros from them, most of it in cash.
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As these stashes of cash had been hidden from the French tax authorities – in some cases for almost 40 years - Serge Dassault is standing trial for “laundering of the proceeds of tax fraud”, an offence that carries a maximum punishment of five years in jail and a fine of 775,000, and also for failing to declare all his wealth as a Parliamentarian. Since the scandal involving budget minister Jérôme Cahuzac's secret Swiss bank account, lying about one's financial worth as a Member of Parliament or Senator is punishable by a three-year jail term and ten years ineligibility for public office. There is, then, a great deal at stake for Serge Dassault, who is very keen to keep his Senate seat.
Behind all this hidden cash lies a remarkable story. For with the Dassaults, offshore stashes of cash are a family affair. The first were created in Switzerland by Serge's father Marcel Dassault, who founded the defence and aviation group and who was an MP for the right-wing Gaullist party of the day, the RPR, the forerunner of today's Les Républicains (LR). Marcel Dassault used to take out around 40 million francs (about 6 million euros) a year, which was used in particular to fund his electoral campaigns and to fund the RPR. In May 1968 Marcel Dassault hired Geneva-based accountant Gérard Limat, a former seminarist as discreet as he is loyal and who is today aged 75, to manage these hidden accounts.
When his father died in 1986 Serge Dassault inherited some of the Swiss stashes of cash plus the accountant. He used some of the money to hand out bribes to the Flemish Socialist Party in a bid to win a Belgian military contract. In 1998 Dassault was given a two-year suspended sentence by a Belgian court after a trial in which he insisted that responsibility for the payments lay with his mother, who had died six years earlier, because the Swiss account was in her name.
Though the Marcel Dassault system did not change fundamentally, his son Serge did make some adjustments. He transferred one of the Swiss bank accounts, opened in the name of a shell company called Merger, to the Edmond de Rothschild bank in Luxembourg. He also had two accounts with VP Bank in Vaduz in Liechtenstein, held by two local foundations called Pégase and Balsane.
It was these three cash reserves that were allegedly used to pay the voters of Corbeil-Essonnes. Between 1996 and 2012, and in particular close to local council elections, the Swiss accountant Gérard Limat delivered some 53 million euros in cash, packed in plastic bags, to the industrialist's office at the Rond-point des Champs-Élysées-Marcel-Dassault in the centre of Paris. Limat also sent bank transfers to Dassault's suspected electoral agents, who came from some of the town's most disadvantaged areas.
Such activities could have continued for some time if two events had not intervened; a judicial investigation into alleged vote-buying in the town and the Cahuzac affair. The 2013 law on transparency in public life that followed the Cahuzac scandal now provides a punishment of three years in jail for Parliamentarians who lie about their financial resources. To mark this new era of openness all MPs and Senators were called on to restate their financial declarations to the new authority in charge of ensuring probity in public life, the Haute autorité pour la transparence de la vie publique (HATVP).
When Serge Dassault filled in his declaration as Senator in January 2014 he hid his offshore bank accounts as usual. But he was unaware that the judges who were looking into electoral corruption in Corbeil had discovered the role of Gérard Limat. Two months later, on March 12th, 2014, the accountant's premises were searched and he was questioned in Switzerland. The secrecy surrounding the overseas stashes had been blown. It was now time for Dassault himself to approach the tax authorities in France to limit the danger.
In June 2014 Dassault's notary and tax advisor Bernard Monassier wrote to the tax unit which deals with people seeking to regularise their affairs. But Monassier's confessions were far from spontaneous or complete, and he simply sought to regularise the Luxembourg-based Merger account in which there was no more than one million euros by the end of 2013. Mediapart has learned that just two years earlier the account contained 16 million euros.
Curiously, it was not until six months later, in December 2014, that Bernard Monassier declared another Luxembourg account which did not feature into the investigation into alleged vote buying in Corbeil. This account was opened at the Pictet private bank by a shell company called Mouzara, and as of the end of 2013 contained 11 million euros. Dassault had also omitted to declare his foundations in Liechtenstein, which he had emptied and dissolved just after his accountant was questioned by the police for the first time.
Unfortunately for the billionaire, he had regularised his offshore assets at the very moment that the HATPV was asking the tax authorities to check his financial declarations as a senator. As the two Luxembourg accounts had not featured in Dassault's declaration, the HATVP passed on details to the national financial crimes prosecution service the Parquet National Financier (PNF). In order to speed up the process the PNF set up a preliminary investigation, with no investigating magistrate involved, then sent Dassault directly for trial. This explains how the case could come to court barely a year after it was first opened.
This procedural tactic has angered Serge Dassault's lawyers, Pierre Haïk and his wife Jacqueline Laffont. In what many saw as a bid to win themselves more time they unsuccessfully sought to get this process joined with the judicial investigation into alleged vote buying in Corbeil, in which their client is under formal investigation; a status one step short of charges being brought. Then, at the start of the current trial on Monday, Dassault's lawyers appealed for a number of “constitutional” issues to be resolved before the trial could start. “We always hear the same refrain, a recurring attack suggesting that all there is behind these appeals are just delaying tactics,” said Jacqueline Laffont with frustration. Before insisting: “The preliminary investigation was carried out in a botched and hasty manner.” The court is expected to rule this Wednesday on whether the three appeals made by Dassault's lawyers should be granted.
Contacted by Mediapart, Serge Dassault's spokesperson declined to say whether the industrialist, who was not present for the legal arguments at the start of the trial, would appear in person in the dock if the appeals were turned down. In May Serge Dassault declined to appear as a witness in the trial of his right-hand man in Corbeil-Essonnes, who was ultimately convicted of attempted murder. However this time Serge Dassault himself is on trial and not to appear would be seen as a sign of contempt towards the justice system that would be hard to justify for an elected representative of the nation.
Meanwhile there is another key question hanging over the trial: what did Serge Dassault do with the 53 million euros in cash that were withdrawn from his offshore account? Was this money only spent around Corbeil? Was some of it used to fund his political family, as was done in his father's day? Was any of the cash used to help win aviation contracts, as in the Belgian corruption case?
Up to now Serge Dassault has not commented on this issue, neither publicly nor to investigators probing electoral corruption. And he and his lawyers will probably try to avoid the matter being raised during the current trial. Indeed, he is on trial for having hidden the money, not for how he used it. Neither Dassaualt's spokesperson nor his lawyer Pierre Haïk would comment.
There is one final scandal, one which serves as a good example of the indulgence which has been shown towards the industrialist over the years, including by politicians on the Left. Despite the scale of the sums involved – the offshore accounts contained up to 31 million euros – and the sophistication of the system used to hide them, the current budget minister, Christian Eckert, has not sought proceedings against Serge Dassault for tax fraud. Yet he is the only person empowered to do so. This is why Dassault is on trial simply for “laundering” the proceeds of tax evasion, a charge that the prosecution service itself can initiate. By way of contrast Christian Eckert did pursue fellow socialist and former overseas trade minister Thomas Thévenoud for tax fraud over tax arrears of 41,475 euros.
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- The French version of this article can be found here.
English version by Michael Streeter