Jailed for corruption, French executive’s story of U.S. justice fuels Chinese distrust of Western courts

For years, Western leaders, business groups and diplomats alike have argued that in liberal democracies justice is delivered free of the taint of politics. It is an argument at the heart of Canada’s response to Chinese anger over the arrest and possible extradition of Huawei executive Meng Wanzhou. Canada, Prime Minister Justin Trudeau reiterated this week, operates “a truly independent justice system.”

But in China, few voices have been more persuasive than that of a single French executive, Frédéric Pierucci, who was arrested in the United States on corruption charges in 2013, then wrote a book about what he calls the “underground economic warfare” waged by Washington and its courts against foreign companies. The U.S. justice system, in concert with its foreign-intelligence apparatus, “enables them to debilitate, eliminate or even absorb their main contenders,” Mr. Pierucci writes in The American Trap.

Translated into Chinese, the book has been influential among Chinese government officials, business leaders and scholars alike, bolstering doubts about the fairness of Western courts. The arguments it makes, and the receptive audience it has found in China, lie in the background of Beijing’s refusal to accept Western assurances about the independence of Canadian and U.S. courts handling the case against Ms. Meng.

On Wednesday, a B.C. judge denied Ms. Weng her freedom, ruling that her alleged bank fraud is a crime in both Canada and the United States. The decision in the extradition case means that Ms. Meng will continue living under partial house arrest in her Vancouver mansion.

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Mr. Pierucci has kept a close eye on what is happening with Ms. Meng, in part because he sees “some resemblances" with his own case. Both were executives for foreign companies that competed with U.S. interests: French conglomerate Alstom SA with GE, which acquired Alstom’s power and grid business in 2015; and Huawei with the U.S. security and technology establishment.

“It is now clear that in the U.S. the lines between the judicial, economic and political powers are at best blurred if not closely intertwined in this case,” Mr. Pierucci told The Globe and Mail in an interview via e-mail.

His conclusions have been received warmly in China, where his book became a bestseller last year, selling almost 600,000 copies there.

It has landed on the desk of Huawei founder Ren Zhengfei, whose company has used it as a training tool for employees, while Jiang Shigong, director of Peking University’s Rule of Law Research Centre, cited Mr. Pierucci’s work as a warning against “naked judicial bullying” from Washington – an argument the Chinese government itself has made.

“For some time, the U.S has been using national power to tarnish and crack down on specific Chinese companies in an attempt to strangle their lawful and legitimate operations,” Chinese Foreign Ministry spokesman Geng Shuang said last January. “Behind such practices are deep political intentions and manipulations.”

Earlier this week, the Communist Party-backed Global Times reiterated that argument, saying, “Canada has helped the U.S. take Meng hostage to impose a crackdown on Huawei. Similar tactics were used by the U.S. in the 2013 arrest of Frederic Pierucci.”

Mr. Pierucci was the Singapore-based global president of Alstom’s boiler division when he was arrested upon arrival in the U.S. in 2013. In and out of prison for more than five years, he eventually pleaded guilty to charges under the Foreign Corrupt Practices Act, the powerful U.S. anti-graft law, after Alstom paid consultancy fees to people connected to the Indonesian government when it was seeking a power plant construction contract.

Alstom was fined US$772-million. Its “corruption scheme was sustained over more than a decade and across several continents. It was astounding in its breadth, its brazenness and its worldwide consequences,” U.S. Deputy Attorney-General James M. Cole said in late 2014 when the fine was announced.

Mr. Pierucci, however, has also documented how the U.S. anti-corruption investigations have yielded enormous fines from overseas companies but comparatively less from U.S. companies.

“In 43 years, the FBI and the [Department of Justice] have been unable to discover a single case of foreign bribery by any of the U.S. power-generation manufacturers,” he said in the interview, while “all major competitors of U.S. companies have been fined.“

Since publishing his book, Mr. Pierucci, who now runs a consulting firm that specializes in international anti-corruption law, has been invited to lecture across China, with speaking engagements at universities, business associations, law firms and the headquarters of major Chinese corporations, including automaker Geely and airline China Eastern. His views helped “China Eastern staff to better understand the various risks that the company may face in overseas operations,” the company wrote in a report on its website.

Mr. Pierucci draws a parallel between Alstom and Huawei, whose network technology has been called a security threat by Washington. “The country that leads the world in 5G technology will have a clear technological, economic and national-security advantage over other countries,” he said, pointing to a Feb. 6 speech by U.S. Attorney-General William Barr in which Mr. Barr said, “Our economic future is at stake. … The risk of losing the 5G struggle with China should vastly outweigh other considerations.”

Mr. Barr’s Department of Justice is in charge of the prosecution of Huawei and Ms. Meng.

“Those words coming out of the mouth of the U.S. Department of Commerce or Department of Defense or even the State Department could be understandable,” Mr. Pierucci said. “But coming out of the DOJ itself is genuinely concerning.”

With reporting by Alexandra Li

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