American Trap： American ＂Sanctions＂ War against French Companies

Wen | Wu Moment, author | Robbery of Darts

As a former executive of Alstom France, Pieruzzi is called the protagonist of "French version of Meng Wanzhou incident".

In 2013, Pieruzzi was arrested by the U.S. Department of Justice at JFK International Airport, charged with a business corruption case in Indonesia in 2003. In September 2018, after Pieruzzi was freed from prison, he wrote the book "American Trap" based on his personal experience. So far, the whole story of General Electric’s acquisition of Alstom, which was regarded as the shame of France, was declassified.

In the past decade, American legal and regulatory authorities have taken extraterritorial legal actions against many large foreign companies. Large companies that have been under the threat of "long-arm jurisdiction" in the United States for a long time have almost reached the point where everyone fears for himself.

Alstom was founded in France in 1928, and it is a leading enterprise in power generation and rail transit infrastructure in the world.

It is understood that a quarter of the global power stations come from Alstom’s equipment. In 2013, there were 58 nuclear reactor turbogenerators in France, which were manufactured and maintained by Alstom. In France, 75% of the production equipment in the store came from Alstom, even including the propulsion turbine of Charles de Gaulle aircraft carrier. Known as "the crown of French power equipment industry".

Therefore, the global power business targeted by GE is also related to France’s economic and strategic security.

In 2003 and 2008, Alstom was caught in the suspicion of commercial corruption. In 2003, Alstom was faced with debt and was on the verge of bankruptcy. With the help of then French Minister of Economy and Finance Sarkozy, it was only through the government’s repurchase of 20% assets that it was able to continue its life. Later, it was only by the order of Tallahan Power Plant in Indonesia that it was brought back to life.

Subsequently, in an audit report of KPMG Fides Peat in Switzerland in 2004, it was found that Alstom used the records of transfer from several offshore shadow companies, with a total amount of 20 million euros. Alstom was also found to have opened accounts in Liechtenstein, Switzerland, the United States, Singapore, Hong Kong, Thailand and Bahrain, and transferred more than $12 million to personal accounts in Venezuela, Singapore, Thailand and China through these accounts.

In 2008, a former Alstom employee said that some European companies had long acquiesced in paying kickbacks to foreign officials or customers, especially in the 1990s. In the early days, some countries even stipulated that companies could get a maximum tax reduction of 7.5% if they reported to the tax authorities.

American multinational companies have strongly protested against this, believing that it will put American enterprises at an extremely unfavorable competitive disadvantage, which is particularly obvious when entering the market of developing countries.

Alstom, which was not "clean" originally, received an offer from General Electric at this time.

After the global financial tsunami in 2008, GE Capital, which contributed 40% of GE’s annual income, began to return to manufacturing. Holding more than 50 billion yuan without cash, even if the opponent is in France with strong "economic patriotism", GE is determined to win. Where does it come from?

A French company engaged in business activities in Indonesia, but its executives were arrested while on a business trip in the United States, which is such an incredible thing in the eyes of ordinary people.

The "reasonable explanation" presented by the police to Pieruzzi was actually hidden in the US Department of Justice, because in this case, the Ministry of Justice used two key laws — — Foreign Corrupt Practices Act and Long-arm Jurisdiction.

The Foreign Corrupt Practices Act was originally a law aimed at preventing American enterprises from engaging in bribery overseas. However, in the second amendment in 1998, it was stipulated that it also had jurisdiction over corrupt acts of foreign enterprises overseas.

The long-arm jurisdiction is easy to understand, and the explanation given by European tradesmen is: "If the arm is long, everything should be taken care of".

When the defendant has a "minimum contact" with a certain state in the United States, for example, the defendant’s enterprise has a branch in the United States, or only communicates through the American mail system and transfers money through American banks, the United States will think that it has jurisdiction.

In other words, when implementing the Foreign Corrupt Practices Act, the U.S. Department of Justice has the right to sue any overseas company under the preset long arm jurisdiction.

Facts have proved that the Foreign Corrupt Practices Act and the long-arm jurisdiction have actually become important legal tools for the United States to achieve the national strategic goal of "re-industrialization" by non-economic means and help American enterprises make profits, and have become an important part of General Electric’s acquisition of Alstom, France.

With the active cooperation of the Ministry of Justice, General Electric successfully won Alstom, the pearl of French industry.

In the process of acquisition, the U.S. Department of Justice took the initiative to cooperate with GE three times.

1. Arrest Pieruzzi. In Pieruzzi’s self-report, the U.S. prosecutor had expressed the hope that Pieruzzi would become his informant in Alstom. After being rejected, the Ministry of Justice gave him two choices.

One option is to plead not guilty and stand trial. Therefore, the Ministry of Justice will strive for the court to sentence him to 15 to 19 years in prison. He was told that the preparation for the trial would last three years and cost millions of dollars.

Another option is to plead guilty and cooperate with the American authorities, and only need to be locked up for a few more months before you can go out. The email provided by the US Department of Justice shows that Pieruzzi is an insider even if he does not encourage bribery — — Confessing to this part of the crime will only result in him being sentenced to a maximum of six months in prison, and he has served more than half of his sentence.

When Pieruzzi finally succumbed to the pressure and signed the plea agreement, the American judicial authorities still imprisoned him for more than five years, and he was not freed until 2008.

2. coerce the CEO to submit. Pierucci’s claim that he has become an "economic hostage" carries considerable weight, and the arrest shocked Alstom’s top management. About 30 executives were warned not to go to the United States to avoid repeating the mistakes of Pieruzzi.

By the spring of 2014, in order to put pressure on Alstom to cooperate with the US Department of Justice, the US authorities arrested at least three former colleagues of Pieruzzi. By inserting an informant, I got a 49-hour secret conversation recording inside Alstom.

At this point, CEO Bai Kelong can only take the lead, and secretly contact with GE executives to discuss the acquisition. After the acquisition was completed in 2015, an official of the US Department of Justice said that Alstom was not willing to sit down and negotiate until we started arresting their executives.

3. Push back Siemens. After learning about the secret conversation between Bacron and GE, Siemens suddenly stepped in and asked for the establishment of a joint venture with Alstom, which was followed by the invitation of Monteberg, then Minister of Industry of the French government. Obviously, Germany, as France’s EU partner, Siemens’ acquisition of Alstom is more in line with France’s national interests than that of American enterprises.

However, the Ministry of Justice warned Siemens that if it formed a joint venture with, the company would face a fine of $1 billion (in 2006, Siemens was accused by the United States of bribery in Argentina and Venezuela, and two years later, Siemens pleaded guilty and paid a fine of $800 million, and CEO von Pierre resigned).

In the end, the European Commission approved the acquisition on September 8, 2015 under the lobbying of the interests of all parties. Alstom was "dismembered": its core energy and electricity business was forced to be sold to American companies, and the company’s business was only rail transit. The Economist, a well-known economic journal, commented in the article that the investigation by the US Department of Justice distorted Alstom’s process of selling assets and created an advantage for potential American buyers.

In 2015, Mark Kong Lung took over as Minister of Economy. He tried to start an inquiry about the acquisition, but he finally gave up. "I believe that there is a causal relationship between the investigation by the US Department of Justice and the sale of Alstom assets, but … … I have no evidence. "

"Pieruzzi is the epitome of French tragedy," French historian Fran? ois Godement admitted frankly in 2016. "At least in industry, France and even Europe have long been conquered by the United States, and we are powerless in the global competition."

When we mention General Electric, we always think of a great name — — Edison. The story of Electric Light Wire is accompanied by several generations’ childhood memories. Today, GE once again appeared in the Wall Street Journal. The title of the article has become "The Dilemma of General Electric: How a company that defined the" American Age "went into decline". In 2018, the overall share price fell by more than 50%, which was nearly 90% lower than the high point in 2000.

High-tech industry, as one of the four pillars of the United States, has now ushered in a challenger from China — — Huawei.

Will Huawei be the next Alstom? Recent performance has shown that Huawei is strong enough to leverage and tear a hole in the rules built by American enterprises and government alliances.

How can we subvert the existing organizational system rules? Mihali, the author of "Flow", introduced in "Creativity: Flow and Innovation Psychology" that the disintegration process has a unique dynamics in the face of rules determined by the contrast of forces:

The first is unimodal preference, and the challenger faces a tough counterattack from conservatives, followed by sub-conservatives.

In the process of disintegration, confrontation will gradually evolve into a "double-peak preference". Conservatives still don’t like you, but they don’t like the sub-conservatives who are not so strongly opposed, and they are caught in internal struggles. The small differences are worse than the sky: the enemy is hateful, the "traitor" is even more hateful, and those who are different from me are traitors. At this point, congratulations, you will win.

Under the blockade, Huawei has also received the support of some "sub-opposition parties". Ren Zhengfei’s answer is: if you get more help, you will get less help.

"We can also make chips like American chips, but that doesn’t mean we won’t buy them."

"We will not narrowly exclude American chips easily and grow together, but if there is a supply difficulty, we have a backup. We are at ‘ Peacetime ’ Half of them are from American chips and half are from Huawei. We cannot be isolated from the world. "

"Huawei’s 5G will not be affected. In terms of 5G technology, others will definitely not catch up with Huawei in two or three years."

In addition, Ren Zhengfei also stressed in his previous public interviews with Japan and Britain that no-spy agreements can be signed. In the face of absolute strength, we see Huawei’s confidence.

After being released on bail, Meng Wanzhou made a circle of friends with Huawei’s propaganda pictures of ballet feet as a picture.

Behind greatness is suffering, and behind continuous greatness is continuous suffering. Restricting Huawei’s development is only a means for the United States to try to maintain its superpower hegemony once again. Whether it is Alstom, its ally, or Huawei in fair trade, what it can’t restrain is the long arms that the United States constantly wants to extend.

At present, it is a pity that the 75-year-old man said when talking about his family: "What I am most sorry for in my life is my children. I was too busy when I started my business, and I had little time to communicate with them. When I was young, my company was in a desperate struggle for survival, and I often had little contact with children for several months. I owed them."