Henri Proglio loses his touch with France's political elite

Henri Proglio has thrived in a country where politics and business go hand in hand - until now.

The son of vegetable market sellers rose to the top of Veolia, the world's biggest water and waste utility, mingling with politicians from the right and the left to sell contracts to their towns. He also led state-owned EDF, the world's largest nuclear power maker, and was a close adviser to centre-right presidents Jacques Chirac and Nicolas Sarkozy.

But lately, Mr Proglio, 65, has lost his touch. This week, he had to give up the chairmanship of defence contractor Thales, a position he had been offered by Serge Dassault, the rightwing defence entrepreneur whose company, Dassault Aviation, is a Thales shareholder alongside the state. After reluctantly agreeing to the nomination, the socialist government led by President Hollande decided to block it.

In an unusual outburst in the press pre-empting the government's official decision, Mr Proglio accused French economy minister Emmanuel Macron of leading a smear campaign depicting him as a Russian spy to force him aside.

"Stop taking me for a clown, a spy, a glutton, a traitor," he told daily newspaper Le Monde. "I've had enough of suspicion, humiliation. (...) For me, a word is a word, there's no going back on it."

For Mr Macron, Mr Proglio's appointment to such a critical role at Thales was incompatible with him sitting on the board of two subsidiaries of Rosatom, the Kremlin-owned nuclear group. "This is a problem of ethics and conflicts of interest," the minister said.

But Mr Proglio, who also sits on the board of a company linked to Rossiya, a Russian bank targeted by US sanctions following Moscow's annexation of Crimea, said the reasons were an "alibi" and denied any conflicts of interests.

"For 45 years, I have been working for my country, I am a real patriot," he said. "I never betrayed France. (...) Some in France consider Russia as a disreputable country. I disagree."

Mr Proglio's reaction underlines a tendency among the French elite to brush off conflicts of interest, or even consider them an inherent part of business and politics, according to Thierry Gadault, co-author of Henri Proglio: une reussite bien Francaise. French industrialists have long believed that power lies in behind-the-scenes networks and political connections, more than in financial performance and corporate governance, he claimed.

"The fact that he did not realise that those roles posed a problem given the geopolitical context is emblematic of this state of mind, French elites are in a bubble," Mr Gadault said.

Mr Proglio claimed he was punished for his ties with Mr Sarkozy, who appointed him as EDF chief in 2009. After surviving two years of socialist rule, Mr Proglio was ousted from the electricity group last year, when the government appointed Jean-Bernard Levy as chief executive.

Mr Proglio's decision to give in is not like him, Mr Gadault said. "He's not one to dodge a fight. The pressure must have been tremendous for him to step aside."

In the end Mr Dassault dropped his backing, according to four people with knowledge of the matter. The maker of the Rafale fighter jet did not feel like arm-wrestling with Mr Hollande, who has recently been winning export orders for the military aircraft in Egypt, India and Qatar.

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