Earlier this year a select group of journalists was allowed into the office of Ren Zheng-fei, the reclusive founder and CEO of Huawei. When pictures of the visit were published on the internet, readers were quick to notice Ren’s choice of reading: a Mandarin translation of Le Piege Américain, in which Frédéric Pierucci used his experience of arrest and imprisonment in the US to tell the story of a long, quiet trade war waged by America against the rest of the world. It must have been an urgent read for Zheng-fei, whose company is a focal point of the tension between the US and China and whose daughter, Huawei CFO Meng Wanzhou, is currently under house arrest in Canada, facing extradition to the US on fraud charges (which she contests). But as Pierucci found out, America’s pursuit of foreign businesses is an established trend.
In early 2013, Pierucci was invited to dinner on the 57th floor of the Marina Bay Sands hotel in Singapore by his boss, Patrick Kron, then the CEO of the French industrial giant Alstom. Among the executives present was Keith Carr, the group’s general counsel. Carr and Pierucci briefly discussed “the Tarahan case”: an investigation into the use of “consultants” to persuade members of the Indonesian government to buy Alstom’s equipment for use in their power stations. Most in the power business knew that these “consultants” bribed officials, but an internal investigation at Alstom had cleared Pierucci himself of any involvement. As they sipped cocktails over Singapore, Carr told Pierucci: “You have absolutely nothing to fear.”
A few weeks later, Pierucci flew to New York on a routine business trip. He was arrested by FBI agents as he got off the plane and found himself, within hours, manacled to a wall and under interrogation. Still reeling from shock and jet lag, he was moved to a maximum security prison and in an overcrowded, windowless block in which murder and sexual violence were commonplace, was told that he faced a maximum sentence of 125 years.
Pierucci was charged under the Foreign Corrupt Practices Act, which allows the Department of Justice (DoJ) to prosecute foreign nationals for crimes – particularly bribery – committed outside its jurisdiction. If a company employs people, trades its shares or even stores its emails (as almost everyone does) in the US, the DoJ has grounds to investigate, imprison and issue huge fines.
The Americans knew that Pierucci was not the ringleader of Alstom’s corrupt practices. As other Alstom executives were nabbed and the DoJ went after the company’s leadership, it became evident that Pierucci’s freedom had become leverage in a deal. In April 2014, after just over a year in prison (without having been sentenced or bailed), Pierucci found out what the deal was. From a television in the prison common room, he learned that Alstom had agreed to sell its entire energy division to General Electric (GE).
France has a model of state investment in energy supply that the UK can only dream of. After the 1973 oil shock, the country implemented the Messmer Plan, a huge building programme that created 56 nuclear power stations. France has so much cheap nuclear power that it is able to sell it to other countries; three million British homes are powered by French electricity. But in 2014, much of France’s nuclear infrastructure – including the generators themselves – became American property.
Pierucci and his co-writer, the investigative journalist Matthieu Arron, have put together a detailed account of the machinations that allowed this act of “economic warfare” to take place. It shows lobbyists making their way easily from the offices of Barack Obama and Emmanuel Macron to the GE boardroom; auditors seeing only what they’re paid to see; retail shareholders watching their investments disappear while Patrick Kron, who was CEO for most of the period that Alstom bribed its way into energy markets around the world, leaves the company with an unblemished record and a payout of more than €12m.
Beyond the fact that there is corruption everywhere and it’s only punished when convenient, this book has something important to say about the world today. While Trump challenges China’s industrial dominance with the blunt instrument of tariffs, a more subtle and effective trade war has been fought for many years. Under both Republican and Democrat administrations, the US was able to “destabilise”, as Pierucci describes it, the multinationals of other nations. British, French, Swedish, Russian and German companies paid tens of billions in fines as the US extended its legal jurisdiction around the globe. Nor is America the only combatant: Carlos Ghosn, the former CEO of Nissan-Renault, was arrested in Japan on financial crime charges but protests that he is the subject of a politically motivated “conspiracy”, as Japan and France jostle for control of car production.
Most importantly, it confirms that while politicians position themselves as being on the side of the free market or the state, this is a lie. No market is free, and the two are always intertwined – sometimes a lot more than we might imagine.
The American Trap
Hodder & Stoughton, 336pp, £25
This article appears in the 18 Dec 2019 issue of the New Statesman, Days of reckoning