ase application 2 Spy games What started as a high-profile corporate espionage case security department who led the internal inquiry against his turned into an enormously confusing, bewildering and embar- three colleagues. He was arrested while trying to board a rassing mess for French car maker Renault SA and its top flight to Guinea, in West Africa, and accused of concocting the executives."The story began in August of 2010 when several spying allegations. top executives received an anonymous tip accusing a senior The audit committee of Renault's board of directors also Renault executive of negotiating a bribe - supposedly for infor- launched an investigation. It concluded that executives had mation related to the cost of the company's electric car. committed a series of missteps after the company received According to CEO Carlos Ghosn, this information was critical the anonymous espionage tip. One was that the security economic data that could give competitors insight into the department's investigation was deliberately hidden from car's technology and costs. Renault's board and audit committee. It also said that it had Renault's chief operating officer, Patrick Pelata, launched a been a mistake for the company to pay out 200,000 euros four-month internal investigation that led the company to (A$300,000) to obscure firms for 'imprecise purposes' in con- conclude that "it was the target of a system organised to nection with the investigation into the alleged espionage. The collect economic, technological and strategic information to audit committee also concluded that the three Renault man- serve interests abroad'. A company spokesperson also said agers accused of spying had been fired without being given an that the company's compliance committee was alerted to opportunity to respond to the allegations. possible unethical practices involving three employees. At a specially called meeting, the board took the following Renault then lodged a criminal complaint of 'organised actions: accepted the resignation of Patrick Pelata, Renault's industrial espionage, corruption, breach of trust, theft and chief operating officer: dismissed the head of human concealment" and dismissed three executives who worked resources, the head of the legal department and the secretary on its electric car program for allegedly leaking information general; fired three security officials, including Dominique in exchange for money. Ghosn said the company's actions Gevrey; asked for a complete redesign of the company's secu- were taken to protect the company. He declared on a French rity department, hiring expert consultants from around the evening news program on 23 January 2011 that Renault world; reinstated one of the wrongfully terminated employees had plenty of proof and was absolutely certain that the three and reached settlements with the other two; and called for the employees had passed company secrets to outside sources. creation of a company ethics committee and a restructuring of The affair also caused tension with Beijing after then-French its compliance committee. president Nicolas Sarkozy ordered an investigation into whether China was involved in the espionage. But the story Discussion questions takes an interesting twist here, as the three men had 4.15 What does this case indicate about the risks organi- asserted their innocence from sations face from corporate spying? Which do you the beginning and repeatedly think was more damaging for Renault: the loss of Bad intelligence? denied any wrongdoing. competitive intelligence about its electric car, or the Doubts began to surface about way the company handled the situation? the alleged spying when the Paris 4.16 What do you think were the stated goals of Renault's state prosecutor dismissed investigation into the bribery allegations? Do you think charges against the three fired executives for lack of evi- the stated goals were the real goals? Why or why not? dence. That's because the three were, in fact, innocent. 4.17 Imagine you were responsible for developing a plan Renault, for the first time, began suggesting that the company may have been 'tricked' into bringing the allegations against for handling investigations of bribery or other forms of misconduct. What would be the breadth, time frame, the men. Then, French prosecutors began trying to figure out specificity and use frequency of your plan? whether someone had engineered the entire affair as a way to defraud the company. The French police hadn't found any for- 4.18 How would you plan to handle investigations of this sign accounts into which the three executives were said to type to ensure that people accused of wrongdoing are have deposited their spying proceeds, but they did find treated as if they are "innocent until proven guilty'? accounts in Spain and Dubai holding some of the money that (Hint: See the material in Chapter 8 about investigat- Renault had given Dominique Gevrey, an employee in Renault's ing workplace bullying.)