GEC-Alsthom faces further `payoffs' row

PARIS (Reuter) - The Franco-British electrical group GEC-Alsthom was at the centre of a new controversy last night over allegations that it had made substantial contributions to the French Socialist Party at the end of the 1980s to keep the then ruling party's support.

In all the industrial group, half owned by Britain's electrical giant GEC, is said to have paid some 7.5 million francs (almost £1m at today's exchange rates) into two accounts in Panama, expressly for the party's coffers.

The Socialist Party, which lost power in March 1993 elections after a series of corruption scandals, categorically denied having received any contributions from the group.

Le Monde reports that GEC-Alsthom was contacted in late 1989 by an adviser, Michel Delebarre, then transport minister. The company was persuaded to contribute to the party in return for continuing government support for the company's exports.

The newspapaper said the decision on the size of the contribution followed negotiations which started from a figure of 12.5 million francs requested by a senior Socialist Party figure.

Judicial sources said three GEC-Alsthom directors had confirmed the payments when questioned by Renaud Van Ruymbeke, the anti-corruption magistrate (judicial investigator), on Monday.

The three were named as Jack Cizain, then international managing director, Jean-Pierre Desgeorges, a former managing director, and Franck Vaingnedroye, the former head of the group's rail division. They said the money was "aimed specifically at the financing of the French Socialist Party," the sources said.

Le Monde said Mr Desgeorges "feared losing government support and at the same time export markets," and therefore decided to make a contribution to party coffers.

The revelations came as Mr Van Ruymbecke - a key figure in several political and corruption inquiries - probed alleged false invoicing over the sale by GEC- Alsthom of railway locomotives to the Netherlands.

The Socialist Party in a statement meanwhile denied that it had received "a single franc" from GEC-Alsthom.

"The facts are perhaps real, but the conclusion that has been drawn from them has nothing to do with the truth. It is a false trail," said a source close to Henri Emmanuelli, the party leader.