It is one of the documents that European aerospace group Airbus would doubtless have preferred not to have fallen into the hands of criminal investigators. But both the French national financial crimes unit the PNF and the Serious Fraud Office in London demanded to see it. It is a contract that sheds light on certain management practices at Airbus – formerly EADS – those little arrangements between friends that senior executives at the group did not want to go into detail about. For the document detailing the departure terms of Jean-Paul Gut, the man who handled all “difficult” commercial deals and especially those in Gulf states, at EADS and its French predecessor until 2007, is most certainly an unusual contract.
According to information uncovered by Mediapart and the German weekly Der Spiegel, Jean-Paul Gut – who with a total remuneration package of 15 million euros a year was doubtless the group's best-paid executive – was granted a 'golden parachute' on his departure in 2007 of around 80 million euros. According to several sources part of this sum came from a deal giving Jean-Paul Gut a percentage of the share from several successfully-concluded contracts. Among these was the massive sale of Airbus aircraft to Qatar for 16 billion dollars, a deal signed just before his departure, and which on its own would probably represent several tens of millions of euros in bonus payments. The rest of the money was apparently justified by “loyal services rendered” by him, both at the Lagardére group where he worked and then later when part of it merged to become EADS, which in turn is now Airbus.
Enlargement : Illustration 1
Even more surprising is that though Jean-Paul Gut left EADS, in particular because of a major divergence in views with the current boss Thomas Enders, the group's management planned to continue using his services. For in the terms of his leaving deal it was proposed that he became an external consultant. His fees were commensurate with his abilities and also accompanied by a deal in which he was to be paid a percentage on any contracts clinched - “in particular with Qatar”, according to someone close to events. Gut was a childhood friend of the current Qatari Emir Tamim bin Hamad Al Thani.
This ultra-secret contract on the terms of Jean-Paul Gut's departure was, Mediapart understands, signed by the two co-presidents of EADS at the time, Louis Gallois and Thomas – usually known as Tom – Enders. At the same time the aerospace group had started a drastic economy drive known as 'Power 8', a plan which envisaged shedding 10,000 jobs, half of them subcontractors. The stated aim was to save 200 million euros from 2007.
The affair is even more embarrassing for Tom Enders given that Jean-Paul Gut was the boss of the EADS International division (renamed SMO after his departure) which is today at the centre of the vast Franco-British corruption investigation led by the French financial fraud prosecution unit the Parquet National Financier (PNF) and Britain's Serious Fraud Office (SFO) into the sale of Airbus airliners (see Mediapart stories here and here).
Today Tom Enders regards the SMO, which he dismantled in 2016, as the sole source of corruption inside the group. That did not stop him cosigning the departure deal for Jean-Paul Gut, granting the latter 80 million euros, and agreeing to allow him to work as an external consultant earning a percentage on sales.
The terms of departure granted to Gut are very far removed from the official announcements made by the group at the time. When he left in 2007 the management had announced that the director of EADS International and of strategy was leaving with a severance package of 2.8 million euros, or around twice his official salary. According to the annual report there was an additional payment of 466,000 euros in lieu of notice and an undisclosed sum paid into his pension pot. The group even went to pains to deny rumours that he was leaving with a pay-off of 12 million euros. That was indeed false – the true figure was six times greater.
In its 2008 annual report EADS mentions in a footnote that “EADS proceeded in December 2008 to the payment of a gross amount of €86 million to acquire the intangible rights previously embodied under a Service Provider Agreement. This intangible asset has been depreciated by €22 million in 2008 according to its economic nature”.
According to some in the know this announcement is supposed to represent the profit-sharing sum that Jean-Paul Gut received from the sales deals, on top of his two years of salary and his pension. But his name is not mentioned. Moreover, the way the money is described does not correspond in any way to staff remuneration, which is not treated either as an asset or something to be depreciated soon afterwards. It is simply expenditure. Airbus has refused to confirm that these 86 million euros were indeed destined to go to Jean-Paul Gut.
So why did Louis Gallois, who has built up an image as an ethical executive throughout his career, agree to grant Jean-Paul Gut such sums and above all to propose that he stayed on as an external consultant? “I'm going to disappoint you,” Gallois told Mediapart. “There are authorities who are at this time working on these issues. I'm letting them do their work. I'm awaiting the results of these investigations. I will say what's what to the people who are in charge of these cases,” he said. When pressed on whether such a contract with these terms exists he replied: “I'm saying nothing.” Airbus, meanwhile, responded with “no comment” to all of Mediapart's questions.
“Jean-Paul Gut had a watertight contract,” says someone close to the issue, trying to justify the group's actions. “It was impossible to revisit it. The compensation that was given to him corresponds to his years spent at Matra [editor's note, a French aeronautics company that became part of the Lagadère group], then at Lagadère, then at EADS.” Nonetheless, there have been some boards of directors that have decided not to honour certain contracts, judging that their legal liability was at stake. But were the EADS directors indeed informed of the decision taken by Louis Gallois?
The contract between EADS and Jean-Paul Gut was one inherited from the Lagadère group, when the latter's aerospace subsidiary Aérospatiale-Matra merged with the German firm DASA to form the European Aeronautic Defence and Space Company or EADS (later renamed Airbus) in 2000. All the old Lagadère contracts were transferred in the same form to EADS.
When it came to pay the Lagadère group had gone against the grain for some time. Making the most of its status as a limited partnership, the top executives in the group, with CEO Jean-Luc Lagardère at the forefront, had after the privatisation of Matra back in 1986 created a parallel structure for the “fair remuneration of its executives”. This allowed them to withdraw several tens of millions of francs which they split between around four or five people, even in tough years when the group made a loss or just broke even.
Jean-Paul Gut did not belong to this pay structure in the days of Jean-Luc Lagadère. But this did not stop him having his own different status first at the Lagadère group and then at EADS. Gut had been Jean-Luc Lagadère's protégé since he was a teenager and was seen at the “spiritual” son of the businessman, who died in 2003. Indeed, Gut was quickly given much greater responsibilities than Jean-Luc Lagadère's own son Arnaud (who now runs the family business as managing partner of the current Lagardère Group's holding company). By the time he was 21 Jean-Paul Gut was already involved in international business affairs, the most strategic activity within the Lagadère group.
'A state within a state'
Enlargement : Illustration 2
Ten years later Jean-Paul Gut clinched a deal which would establish his reputation as a salesman without rival in the world of arms and aeronautics. In 1992 the French defence and aerospace firm Dassault signed a deal to sell 60 Mirage fighters to Taiwan for the equivalent of 4.6 billion euros, including weapons. Within the same overall deal Gut negotiated an enormous parallel contract for MICA missiles made by Matra, worth the equivalent of 1.5 billion euros. Dassault were furious at the price of this contract, fearing that there would not be enough money left in the pot to pay the agreed price for their fighters. The affair led to a squabble between the groups with the French state having to step in to sort things out.
The MICA contract helped secure Matra/Lagadère's financial position for years to come. It was the start of Jean-Paul Gut's rise to fortune, too. He became Jean-Luc Lagadère's advisor then executive director of international affairs, charged with making the most of his boss's immense network of contacts, especially in Asia and the United Arab Emirates. He got a percentage of all the sales that he brought in.
When in 1999 Jean-Luc Lagadère brought about a merger between Matra and the state-owned French company Aérospatiale, all the so-called ' Lagadère Boys' moved en masse to key positions in the new aeronautical group, imposing their rules and customs. Jean-Paul Gut was part of this group and was named president of Aerospatiale Matra Lagardère International and executive director in charge of the defence and space sectors. When in 2000 this new group in turn merged with DASA – a subsidiary of Daimler - to form EADS, he became director of EADS International.
It was Gut who laid the foundations for the operational methods of EADS International (which later became the Strategy and Marketing Organisation or SMO). It was he who organised the entire system of intermediaries and agents which EADS's various divisions made use of to set up discreet business structures, as shown by documents relating to the sale of the group's Eurofighter to Austria. It is this system that is now at the centre of the investigation by prosecutors, who suspect that bribes may have been paid.
A former employee staff at the aeronautical group recalls the EADS International division under Jean-Paul Gut as a “state within a state”, outside the control of the other management structures. “The equivalent of the secret services, with people whose job was to organise dirty tricks” to oil the wheels of sales, claims another. A third says: “No one knew what was being hatched there. No one really knew what Gut was doing, the commitments he was making.” One former member of the SMO has told police investigators that a number of middlemen were paid solely on the basis of “verbal agreements”.
Jean-Paul Gut's name has cropped up in a number of controversial cases. As Mediapart recently revealed the former EADS commercial director was in direct contact with an Emirate intermediary called Abbas al-Youssef who in 2007 deposited, on behalf of Airbus, a hidden commission of 16.2 million euros via a dummy offshore company in Panama.
Gut's name also appears in the judicial investigation into the suspected financing of Nicolas Sarkozy's 2007 presidential campaign by Muammar Gaddafi's Libyan regime. This is revealed by Mediapart's Fabrice Arfi and Karl Laske in their investigative book on that affair called 'Avec les compliments du Guide' ('With the Compliments of the Guide', a reference to Gaddafi's unofficial title of 'Guide of the Revolution').
The suspicions of the investigating magistrates in charge of this case focus on the sale of 12 Airbuses to Libya in November 2006. According to a report from France's domestic intelligence agency the DCRI, Jean-Paul Gut was apparently in contact at this time with the middleman Alexandre Djouhri. At the end of 2007, a few months after Gut had left EADS, Djouhri, who is accused of having paid Sarkozy's right-hand man and chief-of-staff at the time Claude Guéant 500,000 euros, approached the new head of EADS International Marwan Lahoud. He apparently asked Lahoud for the “12 to 13 million” euros that his successor had supposedly promised him in the context of the Libyan deal. The group refused to hand over any money because Djouhri had no contract. “Jean-Paul Gut told me that no contract had been signed with this gentleman, but also that no commitment had been made to him,” said Lahoud.
While Jean-Luc Lagardère was alive, Jean-Paul Gut was untouchable. What precipitated his departure was the power struggle between the 'Lagardère boys' – represented at the head of EADS by co-president of the group Philippe Camus and Noël Forgeard, president of Airbus then group co-president - against a background of suspicions of insider dealing (strenuously denied) by some members of the senior executive team, and in the end the fact that Jean-Luc's son Arnaud Lagadère wanted to sell his stake in EADS. Meanwhile inside the company Tom Enders had for a long time wanted to remove a man whom he considered to be uncontrollable and wanted to take back control of the SMO.
“I'm going to create my own business without breaking the ties with those with whom I've worked for twenty-four years,” Jean-Paul Gut said when he left EADS in 2007. At the time he seemed to be referring only to his long-standing links to the Lagardère group, for whom he is still today the joint boss of its London subsidiary.
But in the light of the revelations about his departure deal, it seems that he was also intending to pursue the activities that he had been carrying out inside EADS, but for himself. What role did he later play inside Airbus itself? Did he have a financial stake in completed deals, as was provided for in his terms of departure? Airbus did not reply to Mediapart on this and Jean-Paul Gut, who manages his business affairs between between Dubai and London and visits his villa at Saint-Tropez in the South of France in the summer, did not respond to any of Mediapart's questions.
In 2010 Jean-Paul Gut went into partnership with Édouard Ullmo, his former right-hand man in the commercial team at EADS, to create London Helios Capital. This company “gives advice and arranges services” and has had a turnover of 2 million euros in the last two years.
In 2009 the two men also created a Luxembourg-based investment fund called Armat, with each of them holding a 49.9% share. Officially the primary aim of this fund is to “help SMEs [editor's note, small and medium-sized enterprises] in their international development”. Armat and several of its subsidiaries had as their administrator the banker Jean-Marie Bettinger from the Swiss financial institution Reyl. Reyl has been implicated in the case of alleged tax fraud linked to the purchase of the luxury Parisian hotel Le Royal Monceau by a Qatari investment fund.
The workings of the Armat investment fund show that Jean-Paul Gut has continued to use exotic company set-ups. For before being overseen by a Luxembourg holding company, several Armat subsidiaries belonged to shell companies registered in Cyprus and Ras Al-Khaimah, an Emirate state with a reputation for being the most impenetrable tax haven in the Middle East. The Armat Group's accounts also show that the fund was financed to the tune of 33.4 million euros by a company called Armat Finance Corp, administered by front men and registered in Panama.
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- The French version of this article can be found here.
English version by Michael Streeter