[Note: The following exclusive report is closely based on an e-mail sent by Robert Dougal Watt to Mr Nick Wright, Clerk of the Committee, Public Accounts Committee, House of Commons on 10 February 2003. – Ed.]

In addition to the material which I included in my letter to members of the Committee, I have also researched the possibility that the "Quatraro Case" was part of something bigger; I have quite a lot of further material, some of which is in the public domain.

However, I must mention – and perhaps my letter to members should have made this explicit – I have no evidence that the NAO was aware of the "Quatraro Case" corruption. Indeed, I consider it most unlikely the NAO was aware of that case; my knowledge of it post-dated my departure from NAO.

I haven't "gone public" with the following.

The following is drawn from academic research, mainstream press articles, and original documentation. To begin, something of a history lesson, I'm afraid...

In 1943 the Vichy regime outlawed freemasonry; an order promptly annulled by De Gaulle. Post-1945, freemasonry was re-established in France, with the encouragement of De Gaulle (who needed all the support he could get; the traditional French right had been widely compromised by collaboration with Vichy) and the support of the US military.

In 1965, De Gaulle established the publicly-owned oil company Elf: for the purposes of a) ensuring energy supplies from former French colonies in Africa, b) combatting encroachment by US and UK commercial oil companies in Africa, and c) securing those former colonies in the French political orbit.

As well as straight commercial methods, Elf relied on the active support of the French intelligence services. Elf also relied on freemasonry, as the means by which the businessmen, the spooks, and the African political leaders, were networked and bound together. A further unusual feature of Elf was that it covertly financed the gaullist movement in France. De Gaulle controlled all this through his "Mr Africa", Jacques Foccart, who
also had responsibilities for the gaullist movement in France.  Pompidou, De Gaulle's chosen successor, continued this system, and the unity of its command.

Things changed with the accession of Giscard, which involved fragmentation of the gaullist movement into competing factions.  Elements within the Elf network took advantage of such competition to play off politicians against each other, and to conduct private business via contacts established through the Elf network (by now also involved in arms trading, and operating beyond the traditional French sphere of interest in Africa – e.g. Angola and the Congo). The accession of Mitterand in 1981 increased further the autonomy of the network, and the diversity of its political allegiances and financial "contributions". By this stage, Elf can be described as a "clan" system, with factions competing in some instances, and coming together in others, depending upon specific activities and interests. But it was highly organised; the Chairman of Elf has described how, like his predecessors, he would make an annual visit to the Elysée, and show Mitterand his list of bribes for the year. 

Then, in two big cases, it came unstuck. German public prosecutors found evidence of massive kick-backs paid by Elf
to German politicians, to snatch the privatisation of ex-DDR Leuna oil refinery and distribution network from BP.  Helmut Kohl's own personal financial advisor was involved in Elf: he expressed fears for his life when the scandal broke; soon afterwards, he fell down a stairs, and died. The affair also linked in to the CDU illegal funding scandal, which led to Kohl's disgrace. As well as receiving illegal money in, over a period of 30 years, prosecutors also found illegal CDU payments out; in the 1980s, to EU-friendly political parties in Spain and Portugal, in the run up to the Iberian accession. Some of these transfers were made via bank accounts of the German secret services.  And in one famous case, a suitcase full of money was handed over to a CDU representative in a Geneva car park by an associate of Mitterand.

In the second big Elf case: in the early 1990s, French arms firm Thomson agreed a deal to sell Taiwan a class of "Lafayette" radar-evading frigates. 

The problem for Thomson was Beijing wouldn't like it, and the French government had a stated policy prohibiting arms sales to Taiwan, then still governed by the Kuomintang. For a commission (Thomson later claimed a $-multimillion swindle), the Elf board member Alfred Sirven (appointed by Mitterand's new Chairman of Elf, Le Prigent) activated the Elf network. An
element in China paid bribes to leading figures in Beijing; and Prime Minister Edith Cresson ordered all details of the deal to be covertly passed to Beijing. On the French side, Sirven instructed an Elf employee, and mistress of Roland Dumas, the foreign minister, to sway her lover's opinion by presenting lavish gifts. She later wrote a best-seller in France, "Whore of the Republic". (Roland Dumas was foreign minister when officers
of the Direction Generale de Service Exterieure sank the "Rainbow Warrior", killing a Greenpeace photographer. He later visited the officers in a New Zealand jail, bringing gifts of wine and cognac. Then he blocked NZ lamb exports to Europe, until NZ handed the officers into French custody, who were then promptly released). The Lafayette deal went through. 

Then a Taiwanese navy captain, who had been investigating evidence Thomson had bribed political and naval leaders in Taiwan, was found dead, floating in a harbour. The navy said it was suicide. However, his widow insisted on a second autopsy, which found he'd been murdered. The first post-Kuomintang
government since 1949 had just taken office; and the Taiwanese were livid when they found out they'd paid three times as much as Singapore had, per frigate; and that the French had blabbed about the deal to Beijing. The Taiwanese investigated. People who had been close to the deal suddenly started dying. An unexpected cancer; a car crash; and in otherwise-unrelated incidents, two people fell out of windows.

One was a DGSE agent, Thierry Imbolt, son of freemason, retired DGSE chief. In November 2002 the father told a magistrate his son had expressed fears for his life. He'd been investigating alleged kick-backs paid by Thomson to leading political figures in France, and found evidence thereof. Other
associates of the son say the same. He fell out of his apartment window in the middle of the night; trying to repair a window shutter, without bothering to switch on a light, police concluded. An accident.

Roland Dumas was convicted of receiving bribes on the Lafayette deal. However, he didn't do time; indeed, pending appeal, he continued to practice as a top-ranking lawyer.  He was the chairman of the constitutional council, which decided in 2000 that President Chirac couldn't be questioned, whilst in office, by magistates examining his role as mayor of Paris in a big bribery case. Allegedly, there's a videotape showing Chirac receiving a bribe, and magistrates would like to talk to him about it. According to people now blabbing, the "quid pro quo" for such immunity, was a promise from Chirac that Dumas wouldn't suffer for his role in the Lafayette affair.

Just ten days ago, Dumas was acquitted on appeal. The judiciary accepted that he hadn't known Elf was the source of the lavish gifts he received from his mistress. Elf executives go on trial next month.

Curiously enough, Chirac's real problems began when, having reached the Presidency, he announced there was too much corruption about, and he wanted to clamp down. After that, details of his earlier activities began to reach the public domain.

Freemasonry runs like a thread through the above. Alfred Sirven, Roland Dumas, etc etc.

A leading French freemason, Raoul L Mattei (33rd degree), has spoken of such problems. In a paper, "Regularity: An Endless Assignment", which provides a brief history of Scottish Rite masonry in France, Mattei observes that post-1965, the new political and economic institutions of Europe provided fresh opportunities for freemasonry. He then bewails that such
opportunities blinded masonic leaders from their traditional values; with dire consequences for the reputation of freemasonry when the results became public knowledge. 

Where's the relevance of all this for the "Quatraro Case"?

A key figure in that case – the top-ranking Commission official, Director General of Agriculture, Guy Legras – was a protégé of Roland Dumas. Mr Legras was never questioned about the Quatraro affair; even though Quatraro was his subordinate, and Legras had authorised the very unusual tobacco-sale system which Quatraro was caught fiddling. The field investigators from 1993, interviewed in 2002, couldn't figure why he was never questioned, either.  Quatraro died, falling from a window, right after he told investigators other people in the Commission were involved, but before he gave them names. After that, the whole investigation was shut down; the European Parliament was told he'd acted alone, end of story. The internal investigation service continued to peddle this version in 2001. 

Even when relevant further evidence came to light. I complained about their inaction to my hierarchy; I was told to shut up. On 4 December 2001, I wrote to the President of the Court, observing evidence relevant to a murder case wasn't being followed up, by neither investigators nor my superiors - I didn't get any reply. So I "blew the whistle" on Court corruption to MEPs, not to internal investigators.

Guy Legras was appointed Director General of Agriculture straight from the French foreign ministry in 1984, during Dumas' first stint as minister. Legras had worked for Dumas, on preparing France's contribution to the drafting of the Treaty of European Union. The DG-Agriculture post doesn't have a very high profile, but it is the top job in Brussels. It's responsible for the CAP, which accounted (in the 1980s, less so now) for
more than half the EU budget. The CAP is crucial to France.  Commissioners come and go, and spend a lot of their time in public; but Directors General are the key figures, behind the scenes. Mr Legras filled that role for fifteen years.

Is any of the above positive evidence of wrong-doing in the "Quatraro Case"?

No it isn't; but, I submit, it should ring plenty of warning bells. I
submit, the European Court of Auditors is incapable of doing its job, because of internal corruption (corruption which the NAO knew of; but about which, like others, it did nothing). In consequence, Member States can't have reasonable confidence in the integrity of the European system.

That system cannot reform itself. As Paul van Buitenen has observed, the procedures for tackling internal wrong-doing have always been in place – they're simply not used (except against whistleblowers!). No amount of internal rule-changing "reform" will alter the pervading culture. The hounding of Cresson is a PR stunt; there are literally hundreds of lower-profile irregularity cases which are not being progressed. Cresson is an easy target; already thoroughly discredited, she's now outside the
Commission, without allies (just like Mrs Nikolaou, former Member of the Court, now being pursued on charges of fraud).  These prosecutions are designed to preserve the current system, not change it.

Unless Member States act to reform the European system, then I suggest one lesson from the history of Elf is clear. If corruption is tolerated overseas, even in the national interest; then, sooner or later, it comes home. And it wreaks havoc when it does. Elf undermined the whole French domestic political order, implicating all the mainstream parties. The shocking vote for Le Pen demonstrates the frightening disaffection of the French public from a democratic process which has been severely damaged by corruption.

I also fear the window of opportunity is closing, for individual Member States to make a real impact on corruption in "Europe". The prominence of the accession states in Transparency International's "Corruption Index" is rather worrying.

I'm sorry the above isn't more formally presented, with full references given – but I reckoned it might be helpful for members to receive it promptly. The indications are that there is a great deal more to this affair, and much more at stake, than is apparent from my original letter [to the British House of Commons].

Note: This piece was published for the first time as part of an exclusive report by JUST Response on May 18 2003.

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