<a href=news.ft.com>Financial Times By Robert Graham Published: April 21 2003 21:13 | Last Updated: April 21 2003 21:13 The air of injured innocence is slowly evaporating among the key defendants in France's biggest ever corruption trial.

In all, 37 people have been charged with siphoning off almost €400m ($436m) during the late eighties and early nineties from Elf, then a French state-owned oil group.

After a month of hearings, the whereabouts of most of the funds remains a mystery. But the trial judge has succeeded in teasing out the lavish whims of Elf executives and their acolytes, forcing many of the accused to admit to serious personal enrichment.

Loik Le Floch-Prigent, Elf's chief executive from 1989 to 1993 and a central figure in the case, admitted his personal gains with masterly understatement, saying: "Things got out of hand.""At Elf everything was exaggerated. It eroded one's sense of reality... I allowed myself to get carried away." Loik Le Floch-Prigent

Accused of removing €183m of Elf money, and now in poor health as he serves a 2½ year prison term imposed at a previous corruption trial, he appears relieved to confess. "I see this as an occasion to get things off my chest," he said.

Alfred Sirven, who handled many of Elf's pay-offs to middlemen and foreign dignitaries, who is charged with siphoning off €168m, has been a little less contrite.

Soon after the investigation began in 1994 he went on the run, and police only caught up with him in the Philippines in 2001. "I am guilty of certain things: this I have known for a long time, but all the same that does not really explain how these things happened," he said in his gravelly voice.

These men and the other defendants are bitter that their political superiors are absent from the dock - even though they claim Elf was used as a secret treasury for under-the-table state activities from the foundation of the Fifth republic in 1958 until the group's privatisation in the mid-1990s.

But - as the sharp-tongued judge Michel Desplan has reminded them - this is no answer to the serious corruption charges against them.

Mr Le Floch-Prigent has, for instance, been asked to justify the purchase of a $9.3m Paris mansion, a country chateau and a divorce settlement after 18 months of marriage that cost Elf €4.5m. He replied: "At Elf everything was exaggerated. It eroded one's sense of reality . . . I allowed myself to get carried away."

At first he insisted the luxury town house had been bought for corporate relations with the ulterior purpose of being for the use of president Omar Bongo of Gabon, where Elf had vital oil interests.

But Fatima Belaid, Mr Le Floch-Prigent's ex-wife, told the court that the place was for her ex-husband's "personal use", and that its ownership was concealed to avoid taxes.

This prompted the judge to ask Mr Le Floch-Prigent: "For company representation, was not this place too much even for the president of Elf?"

His reply became one of the most quoted lines from the case: "It was a folie des grandeurs. Let's say it was a mistake; but it was not a crime."

To defend the fact that his expensive divorce was settled through offshore Elf bank accounts, Mr Le Floch-Prigent invoked his close relationship with the country's late president François Mitterrand.

The court heard he told the president that if the divorce turned messy there was a risk his ex-wife might reveal what she knew of Elf's activities, causing "collateral damage" to Elf's African clients as well as the president's son Jean-Cristophe, who handled African affairs at the Elysée Palace.

This was the first time Mr Mitterrand had been overtly linked to corruption at Elf during the trial, although the group's top appointments were approved by him.

On the broader issue of where Elf's secret funds went, Mr Le Floch-Prigent has admitted he knew of a "black box" containing some $5m a year. Nevertheless, he said he knew nothing about how the contents were used. That was in the hands of Mr Sirven and André Tarallo, head of Elf's Gabon subsidiary and its principal contact with African leaders, who is accused of corruptly handling €35m.

Neither man has yet been forthcoming about the money trail. Mr Tarallo has been the more explicit, claiming at one point that in 1990 President Bongo feared he was about to lose French backing for his long-standing authoritarian rule and needed a "savings bank" as insurance against losing power.

The trial is in its early stages, and evidence about Elf's dubious foreign operations is expected to be heard throughout May.

This could yet throw light on kickbacks paid by Elf over a deal between Mr Mitterrand and German ex-chancellor Helmut Kohl to invest in the Luena refinery in East Germany - an affair which helped bring Mr Kohl down.

Also under scrutiny will be oil contracts in the North Sea and Venezuela and the purchase of Spanish group Ertoil.

But many observers will be watching most keenly for more folies des grandeurs.

Related stories Time up for men accused of greasing palms with Elf's oil  Apr 22 2003 05:00 The Elf affair - who's who  Apr 15 2003 17:45 Total launches review of corporate ethics  Apr 14 2003 21:53
Exiles call for Iraq to let in oil companies  Apr 07 2003 03:49
Pentagon to blacklist companies investing in Iran  Mar 28 2003 22:25
Moving places  Mar 26 2003 04:00

<a href=reuters.com>Reuters Mon April 21, 2003 04:00 PM ET By Pascal Fletcher

CARACAS, Venezuela (Reuters) - Venezuela on Monday dismissed renewed charges by Colombia that it was sheltering leftist guerrillas, intensifying a dispute over border security just two days before a bilateral presidential summit.

President Hugo Chavez and his Colombian counterpart Alvaro Uribe are due to meet on Wednesday in eastern Venezuela to try to defuse the controversy over the frontier and shore up ties battered by economic and political problems in both countries.

Relations between the two Andean neighbors, who share a rugged 1,400-mile border, have been strained by accusations from Colombia -- denied in Caracas -- that Chavez's government is allowing Colombian Marxist rebels to operate from Venezuelan territory.

"Venezuela gives no shelter to criminals of any nationality," Venezuelan Vice President Jose Vicente Rangel said in an angry response to charges from Colombian Attorney-General Luis Camilo Osorio.

Osorio said at the weekend Venezuela was becoming a "haven for Colombian delinquents" and urged Venezuela to help rid the border of rebels, right-wing paramilitaries and drug-traffickers.

Rejecting Osorio's comments as "a provocation," Rangel said in a statement: "If Colombian delinquents have come into this country, then this is more the result of negligence and complicity by the Colombian authorities, rather than by us Venezuelans."

WAR OF WORDS

In a war of words in recent weeks, Chavez's government has accused the Colombian army of backing right-wing paramilitaries and allowing them to penetrate into Venezuela.

The latest heated exchange set the tone for what could be a prickly April 23 meeting between left-wing paratrooper Chavez and Uribe, a lawyer who has set himself the task of trying to defeat the Marxist rebels and bring peace to his country.

Uribe, whose father was killed by the Revolutionary Armed Forces of Colombia, or FARC, has appealed to neighboring governments to denounce the FARC and a smaller rebel group as "terrorists" and act firmly against them.

But populist Chavez, who was first elected in 1998 and has declared a self-styled "revolution" in favor of his country's poor, has refused to label the Colombian rebels as "terrorists." He says he wants to maintain a neutral position to be able to contribute to a negotiated peace in Colombia.

His critics accuse him of having ideological sympathies for the Colombian guerrillas.

Chavez has denied the criticism, saying his armed forces will repel any illegal incursions into Venezuelan territory, whether by rebels, paramilitaries or the Colombian army.

"Venezuela, its government and people, want to have the best relations with Colombia ... we hope the Uribe-Chavez meeting in Puerto Ordaz will be fruitful," Rangel said.

Also on the agenda for the talks in the industrial city of Puerto Ordaz will be trade between the two neighbors, who are major commercial partners.

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, April 21, 2003 By: VenAmCham

VenAmCham's Jose Gregorio Pineda (chief economist) and Jose Gabriel Angarita (economist) write: Planning Minister Felipe Perez announced his preliminary forecasts for 2003, predicting that the Venezuelan economy will contract by 3% to 5% and inflation will come to 27%. These estimates reflect a serious underestimation in comparison with those offered by many specialists, including those of the International Monetary Fund (IMF), which forecasts a 17% plunge of economic activity and a 40% inflation rate.

The current trend in the Venezuelan economy, marked by the closing of industrial companies, a massive growth of unemployment, worsening poverty indicators, economic policies (such as price and exchange controls) detrimental to productive enterprises, barriers to foreign trade, and other distortions, could not result in anything but a deep contraction of Gross Domestic Product, to an even greater extent than in 2002.

One of the strongest explanatory factors in this highly adverse scenario for the Venezuelan economy is the systematic refusal to distribute foreign exchange to the different industries, under the exchange control system. Until the foreign exchange market is restored, even if with strict rationing, the national private will continue to be in serious difficulty, and the inevitable outcome will be higher unemployment, a deeper economic contraction, and a smaller private share in national product.

At the same time, the different components of aggregate demand contribute to the prevailing negative expectations on the course of economic activity in 2003. One of those components is a drastic decline of final household consumption, which is suffering the impact of falling real salary levels; this trend diminishes access to goods and services and undercuts well-being throughout society. Internal and external private investment have fallen considerably in recent years, and are now very skittish, given the unfavorable economic expectations and policies. Finally, public spending contracted drastically in the early months of the year (and is not expected to recover in real terms in the rest of the year) due to the fiscal crisis.

The only way to reverse the economic failure toward which we are moving, since political and social conflict have been partially limited, is a radical change of direction for economic policy. Venezuela needs policies that put in motion a plan for sustained economic growth based on a revival of national industry through the free operation of the external and internal markets, thereby stimulating the creation of new jobs, generating a favorable climate for investment of capital and maintaining price stability, among other policies designed to put the Venezuelan economy on the path toward sustained economic growth.

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Our editorial statement reads: VHeadline.com Venezuela is a wholly independent e-publication promoting democracy in its fullest expression and the inalienable right of all Venezuelans to self-determination and the pursuit of sovereign independence without interference. We seek to shed light on nefarious practices and the corruption which for decades has strangled this South American nation's development and progress. Our declared editorial bias is pro-democracy and pro-Venezuela ... which some may wrongly interpret as anti-American. Roy S. Carson, Editor/Publisher Editor@VHeadline.com  

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Monday, April 21, 2003 02:26 PM ET  Printer-friendly version   CARACAS (Dow Jones)--Venezuela will send 13 shipments of Merey crude oil to ConocoPhillips(COP, news) by June, adding to two shipments totaling 1.12 million barrels in April, Venezuela's state-run Venpres news agency reported Monday.

In April, the B/T Constitution and the Pioner shipped 550,000 barrels and 571, 000 barrels respectively, according to Venpres, which didn't specify total volume expected to be shipped through June.

Shipping agents couldn't be reached to verify the ships' names which are often mispelled by Venpres.

Venezuela's government claims crude oil output has now topped 3.1 million barrels per day after being down as low as 150,000 b/d during the strike that began Dec. 2.

The government has said it lost about $7 billion due to the strike.

Former managers at state oil company Petroleos de Venezuela SA have put production at closer to 2.6 million b/d.

Venezuela normally provides about 15% of U.S. crude oil and refined product imports.

-By Jehan Senaratna; Dow Jones Newswires; 58212 564 1339; jehan.senaratna@ dowjones.com

<a href=www.vheadline.com>Venezuela's Electronic News Posted: Monday, April 21, 2003 By: Patrick J. O'Donoghue

Pressure is building up before the Colombian-Venezuelan presidential summit scheduled on Wednesday April 23 in Puerto Ordaz.

Colombian Attorney General, Luis Camilo Osorio claims that Venezuela is harboring Colombian criminals in Venezuelan territory and calls on Venezuelan authorities to exercise greater collaboration in confronting the critical border situation. "The warning is clear: anyone who is a friend of criminals must accept the consequences." 

Osorio is referring principally , of course to Colombian guerrillas, who have been fighting successive governments for more than thirty years but throws in paramilitaries, narco-traffickers and common criminals for good measure. "I don't want to enter into microphone policy but in as far as it concerns my Office, we demand greater collaboration from the Venezuelan authorities and we are investigating the alleged bombing of a Colombian village by Venezuelan planes."

• The Colombian media has forecast that the summit will be "stormy and red hot." 

The first meeting between President Hugo Chavez Frias and Colombian President Alvaro Uribe took place on November 13, 2002 in Santa Marta, Colombia when both sides agreed to follow normal diplomatic channels to address problems and avoid so-called microphone policy of publicly attacking each other via media spots. 

This summit is preceded by a return to the shouting match or microphone diplomacy initiated on the Colombian side and which has characterized bilateral relations over the last couple of years. 

It coincides with a Colombian media offensive emboldened by the US war on Iraq and certainty that the USA will finally solve Colombian's internal de facto civil war, which has been mostly rural and recently started to hit urban areas. 

Venezuelan Executive Vice president, Jose Vicente Rangel has replied to the offensive by counter-attacking taking the Colombians by surprise, and raising belligerency levels in bilateral relations. 

Colombia's El Espectador broadsheet forecasts that it will be difficult to reach concrete agreements given current relations. Economic relations will figure high on the agenda as Venezuelans allegedly owe Colombian exporters $250-350 million.

Chavez Frias could dangle economic advantages to his counterpart by offering to drop the disastrous trucking agreement that has caused serious damage to trade between the two countries. 

The irony is that three years ago Chavez Frias ordered Colombian trucks that formerly delivered cargo inside Venezuela to transfer products to Venezuelan trucks at border check-points to favor Venezuelan trucking barons unable to compete on equals terms with their Colombian counterparts ... the main baron being (former?)  Federation of Chambers of Industry & Commerce president, Carlos Fernandez whose greed almost broke the Venezuelan economy in December-January. 

The deciding factor in Uribe's approach to the summit will be the USA and possible "pre-emptive diplomacy" changes to Plan Colombia. 

Colombian Senate Foreign Affairs Committee president, Enrique Gomez Hurtado agrees that it will be difficult to normalize bilateral relations ... "the Venezuelan government has few elements of mental normality ... President Chavez Frias has lost all credibility and is stimulating international provocations to cover up Venezuela's economic crisis."

The latest Bogota media spin is to reveal a Revolutionary Armed Forces of Colombia (FARC) deserter's claim that the Caracas Carapaima urban guerrilla group is a FARC front and  evidence of the link between President Chavez Frias and FARC.

The woman deserter, who has entered the Colombian Army's witness protection program, has stated that the subversives receive Venezuelan ID cards and that FARC commander Jorge Briceno received medical attention in the Venezuelan border town of San Antonio in May 2000.

Our editorial statement reads: VHeadline.com Venezuela is a wholly independent e-publication promoting democracy in its fullest expression and the inalienable right of all Venezuelans to self-determination and the pursuit of sovereign independence without interference. We seek to shed light on nefarious practices and the corruption which for decades has strangled this South American nation's development and progress. Our declared editorial bias is pro-democracy and pro-Venezuela ... which some may wrongly interpret as anti-American. Roy S. Carson, Editor/Publisher Editor@VHeadline.com    © 2003 VHeadline.com All Rights Reserved.  Privacy Policy Website Design, hosting and administration by: Integradesign.ca