Mitterrand linked to shady trade: Magistrate reveals unexplained payments to French President

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A FRENCH examining magistrate investigating political corruption has uncovered unexplained payments to President Francois Mitterrand and his son by a businessman accused of insider trading.

Thierry Jean-Pierre, a magistrate who has been investigating under-the-table payments to the Socialist Party, made the revelations, which could cause a serious political scandal, in a report he wrote for his successors when he was promoted to a job in the Justice Ministry this month. The conservative newsweekly Le Point carried large extracts of the report at the weekend.

The allegations concern the Socialist President's friendship with Roger-Patrice Pelat, a friend he met in a German prisoner-of-war camp during the Second World War. Pelat, who died in 1989, was alleged at a recent corruption trial to have profited from information obtained at a lunch in 1988 at the home of Pierre Beregovoy, then the Finance Minister. Beregovoy, who went on to become prime minister in 1992, shot himself last 1 May.

Beregovoy, who committed suicide a month after the Socialists' crushing defeat in parliamentary elections, was said to have been depressed in part because of revelations that he had accepted an interest-free loan from Pelat to buy a flat.

Beregovoy, backed by the Pelat family, said he had repaid the debt on Pelat's death, in part in antique books and works of art. Mr Jean-Pierre threw doubt on this version, noting that Beregovoy could have made a list of the objects to add to the documents concerning the Pelat estate but had not done so. Accepting the loan was not illegal in itself, and Beregovoy has not been directly linked to the insider- trading accusations against Pelat.

Pelat was alleged to have learnt at the Beregovoy lunch that the nationalised French firm Pechiney was negotiating the purchase of American Can from the US Triangle company. Investigators suspected Pelat of buying 20,000 Triangle shares through a Swiss broker just before the deal was struck. Pelat had earlier purchased 10,000 other shares openly. Three months ago, seven people were fined or received suspended prison sentences for their role in the affair.

In his report, Mr Jean-Pierre touched on a public works contract in North Korea for which Pelat received a 25m-franc ( pounds 2.8m) commission. The report said the contract was negotiated by the Elysee Palace shortly after Mr Mitterrand's election in 1981.

The most damaging information was the investigator's assertion that Mr Mitterrand received commissions from Vibrachoc, one of Pelat's companies, in the 1970s. He gave a list of payments between 1972 and 1980 totalling 239,000 francs.

After his election, Vibrachoc continued the payments to Mr Mitterrand's son, Gilbert, the magistrate said. Mr Jean-Pierre gave a list amounting to 494,750.92 francs received between 1981 and 1989.

Mr Jean-Pierre quoted Michel Guenot, Vibrachoc's financial director, as saying that Gilbert Mitterrand's services were 'fictitious' and 'a roundabout way of ensuring a friendly income from Roger- Patrice Pelat to Mr Mitterrand'.

On the President himself, the director said: 'I was never aware of any bills for his fees and the sums connected with his name do not correspond to any real service.'

The report also mentioned a cheque for 150,000 francs from Pelat to Mr Mitterrand in 1988 and quoted a banker as saying he believed it had gone to the President's re-election campaign that year.

Mr Jean-Pierre was appointed to a new post to coordinate investigations into money-laundering, a subject on which he published a book early this year. His appointment to a ministry job aroused speculation that he had been promoted to gain his silence.

A new development in the history of Socialist corruption had been expected since September when it emerged that the internal security service, the DST, had seized some of Pelat's business files in 1990. Mr Jean-Pierre had sought to examine the Pelat files and found some were missing. He said an anonymous letter-writer told him they had been taken by Interior Ministry officials. The DST then acknowledged having taken the files, although there was no record of it.