PARIS, April 11 (UPI) — French automaker Renault SA said it had reached tentative settlements with three improperly fired executives, but others could lose jobs due to the scandal.
The scandal began in January, when the company said it had evidence three executives in its electric car division had been paid to leak information. The company has since said it had been scammed and paid for fraudulent information that implicated the executives, The Wall Street Journal reported Monday.
After a director’s meeting Monday in which Chief Executive Officer Carlos Ghosn was reported to have apologized to board members, Renault said second in command, Chief Operating Officer Patrick Pelata, would be reassigned and three officials in the firm’s internal security office would now be subjected to disciplinary action.
Chief legal counsel Christian Husson, corporate secretary Laurence Dors and senior executive Jean-Yves Coudriou were all suspended, the firm said.
Renault said it had reached preliminary settlements with Michel Balthazard, Matthieu Tenenbaum and Bertrand Rochette, the three who were fired in January, and with Philippe Clogenson, an executive wrongfully dismissed in 2009.
French authorities are investigating the fraud concerning the purchase of false information, the newspaper said.
Allegations of espionage and email snooping enveloped Montreal’s city hall on Monday, with a senior elected member of the governing party at the centre of the scandal.
Veteran city councillor Claude Dauphin said Monday he wants answers after being informed his emails were opened by a senior city bureaucrat after prompting by provincial police.
The fresh allegations added to an increasingly chaotic situation at scandal-plagued city hall.
Mayor Gerald Tremblay revealed the espionage occurred in the midst of an internal investigation involving Dauphin, who is chairman of city council and a member of Tremblay’s political party.
Municipal regulations explicitly forbid city employees from investigating elected officials and their staff.
“The real case that concerns us today is whether or not an elected official was subject to an investigation without his knowledge: Were my communications spied upon?,” Dauphin said shortly before an afternoon city council meeting that was quickly postponed.
“If the response is yes, then it’s totally unacceptable and it’s totally illegal.”
Dauphin is asking why city controller Pierre Reid opened his emails.
Reid is a veteran bureaucrat who has been at the centre of espionage scandals in recent months.
The 30-year veteran city employee spearheaded a secret investigation into Montreal auditor general Jacques Bergeron which came to light in February.
On Monday, Reid was relieved of his duties as controller but will remain with the city in a different capacity, Tremblay said.
Tremblay noted the emails were opened as part of an internal investigation into a deal involving Dauphin, a probe the mayor said produced “troubling facts.”
He said Reid was acting in good faith and only doing his job and that it was police who suggested the emails be scrutinized.
The catch: there was no formal, written request from either the police or the Quebec government.
“I think that Pierre Reid had a difficult (job),” Tremblay said.
“He was in a position where there were a lot of allegations of collusion and corruption and a lot of irregularities.”
The Tremblay administration has been under fire to fire Reid since a revelation that a 10-month investigation of the auditor general was conducted after anonymous tips that Bergeron had behaved improperly.
The bureaucrats alleged the investigation found that Bergeron awarded contracts to his family and used city resources for personal reasons.
Some elected officials expressed concern that espionage was widespread within city hall and they asked again on Monday for Reid to be fired outright.
“I don’t understand how Mayor Tremblay can reconcile his solemn declarations to Montrealers that there had been no espionage of elected officials,” said opposition Coun. Alex Norris of Projet Montreal.
“It’s a completely absurd situation and it’s difficult to maintain any confidence in Mayor Tremblay when he says one thing and then the opposite two weeks later.”
The mayor has also requested that new guidelines be drafted to require official written authorization from police or government officials before emails are searched.
Tremblay said Dauphin will be asked to step down as council speaker and from the party caucus pending the police investigation. A city hall motion to that effect could come as early as Tuesday.
Dauphin has denied any wrongdoing and says the transaction involving property in the west-end borough where he is mayor was above board.
He said he will not step down.
“On the basis of a document I haven’t seen, the mayor asked me to resign, which I’ve refused,” Dauphin said, adding his reputation is on the line.
Corporate espionage is a business almost as old as corporations, but thanks to the Internet revolution it has a new business model: cybercrime. A new report from McAfee illustrates how intellectual property and trade secrets are becoming the primary target for hackers, and providing the currency that fuels the cyber underground.
The recent attack against RSA–resulting in the compromise of sensitive data related to the SecurID two-factor authentication that many corporations rely on to guard against unauthorized access and protect data–is an example of how even the very companies that we trust to help guard against corporate espionage are not invulnerable themselves. Hacked SecurID tokens could be used as a stepping stone to more serious corporate espionage.
“Cybercriminals have shifted their focus from physical assets to data driven properties, such as trade secrets or product planning documents,” said Simon Hunt, vice president and chief technology officer, endpoint security at McAfee. “We’ve seen significant attacks targeting this type of information. Sophisticated attacks such as s Operation Aurora, and even unsophisticated attacks like Night Dragon, have infiltrated some of the of the largest, and seemingly most protected corporations in the world. Criminals are targeting corporate intellectual capital and they are often succeeding.”
Personal information–names, addresses, birth dates–are still hot commodities for identity theft, and financial details–credit card numbers, bank account passwords–are big business as well. Don’t hold your breath waiting for botnets and other malware to stop trying to steal those types of data. But, hacking into corporate networks and stealing intellectual capital is generally safer and more lucrative.
JERUSALEM – Israel’s parliament has passed a law that allows courts to strip citizenship of anyone convicted of an act of terror against Israel, espionage or aiding Israel’s enemies.
The legislation was opposed by critics who claim it’s aimed at Israel’s Arab minority. It passed easily Monday night with a 37-11 vote in the 120-seat parliament.
The law is in addition to other penalties that violators might face. It was sponsored by Foreign Minister Avigdor Lieberman’s hardline Yisrael Beiteinu Party, which has played heavily on the perceived disloyalty of Israel’s 1.5 million Arabs.
The party has also pushed through parliament a law requiring non-Jewish immigrants to take a loyalty oath. That law was seen as anti-Arab because it doesn’t apply to Jewish immigrants.
The espionage turned fraud scandal that has dogged Renault for months has taken a new turn as French media aired secret recordings of one of the automaker’s executives begging its former security boss to help it “get out of this mess”.
“Help us to get out of this mess in one piece,” Renault’s general counsel and compliance officer Christian Husson said to Dominique Gevrey, the ex-security manager now accused of fraud in the case, in secret recordings of the meeting released by magazine L’Express and France 2 television.
The meeting between Husson, Gevrey and the company’s lawyer Jean Reinhart, took place on February 14, when Renault still believed it was a victim of industrial spying.
The automaker was eventually forced to apologise to and promise to compensate the three men it had accused and fired in the case.
“We don’t live in the world of the police, we live in a world of management, an internationally-listed company. So we’re in a mess. Help us get out of it,” Husson went on.
Gevrey for his part assured the others that he had a written report containing information about his supposed source, but that it was not in his office, but in Brussels.
“From the start, I’ve said, ‘be careful !’ What we have won’t stand up in a court,” he adds in the recording.
Renault said it was “shocking” that such a recording, which it said was made by Gevrey without the others’ knowledge, should be made public.
Renault had submitted the minutes of the meeting, which was called to make Gevrey reveal his source and cooperate with the police, to the authorities, it said in an emailed statement.
Reinhart told Reuters on Wednesday the conversation had planted the first seeds of doubt about Gevrey.
“We came out of the meeting and we said to ourselves, ‘this guy is taking us for a ride,’. We could no longer exclude the possibility of fraud,” he said.
Investors shrugged off the revelations and bid up the automaker’s shares 2.4 percent, making it the day’s top gainer among European car companies. So far this year, though, Renault’s shares are the sector’s biggest decliners.
French industry minister Eric Besson has said he is against “destabilising” the company in the face of questions over whether Chief Executive Carlos Ghosn, who is also head of alliance partner Nissan Motor, should keep his job after the scandal.
Ghosn and Chief Operating Officer Patrick Pelata said they would forgo their 2010 bonuses because of the affair, which has embarrassed the company and the government – Renault is 15 percent state-owned.
Pelata tendered his resignation earlier this month but Ghosn refused to accept it.
In a related development, police on Monday interviewed as a witness a Belgian man named by Gevrey as his source, who said he had never passed any information to Gevrey, website Mediapart reported.
An independent magistrate is trying to determine if other people were involved in the affair and to find the money Renault paid, part of which is in Swiss bank accounts belonging to Gevrey.
Michel Luc, an employee of a private security company, was also placed under investigation last week after serving as an intermediary to help Gervey organise what he said was the paying of his source. Luc has been released on bail.
