Has Corruption Become Commonplace?
In the Chanson scandal, the big loser is Burgundy
This month's fraud trial involving Burgundy négociant house Chanson Père & Fils was rich with drama. With four men in the dock, each with his own version of the truth, it is difficult to declare a winner. But there is one clear loser: Burgundy.
Prosecutor Jean-Claude Dumarets summarized the situation for the packed courtroom: "Unfortunately for Burgundy and France, this is not the trial of the century. Unfortunately, there were trials like this before, and others will follow. This is not a unique case." Two more fraud cases are in the pipeline and will be prosecuted within the next few months, he said.
The seven-hour trial raised fundamental questions about Burgundy's credibility--or what's left of it. Are cheating and fraudulent wines widespread in Burgundy, as some of the evidence and testimony suggest? Is Burgundy so corrupt that even an ethical company couldn't avoid malfeasance?
Etienne Bizot under fire
The ethical company in this case is Société Jacques Bollinger, which owns the stellar Champagne Bollinger and bought Chanson five years ago. The late Christian Bizot, who headed the Champagne house and its parent company, was the author of a quality and ethics charter for Champagne producers, and he was widely respected in the wine world.
Now Bizot's son, Etienne, 42, finds himself in legal peril. Charged with fraud, he faces a sentence of eight months in jail and a fine of 25,000 euros. Judge Alain Chalopin plans to announce the verdict on Nov. 17.
How did Bizot and Bollinger get into this mess? Bollinger bought Beaune-based Chanson from brothers François and Philippe Marion in September 1999. Unbeknownst to Bizot, who was sent to head Chanson, Bollinger took over a stock that included hundreds of thousands of fraudulent bottles of "Burgundy."
By all accounts, Bollinger wanted to produce authentic Burgundies when it bought the négociant, which also owns vineyards. In fact, the Champenois have turned around quality at Chanson, which had been mediocre for years, and started to make fine reds and whites there in 2001.
It wasn't until early 2001--16 months after Bollinger bought Chanson--that Bizot alerted authorities to the fraudulent bottles, and that's why he's in trouble. He disclosed then that Chanson's 6-million-bottle cellar included 727,500 bottles of illegally blended wines. Bizot told the cops that he hadn't found out about the fraud until December 2000, but they didn't believe him.
Bizot pled innocent on Oct. 13. Nobody doubts that the reputable Bollinger was shocked to find itself the owner of illegal wines. But these wines were worth up to 25 million euros (roughly $30 million) on the market. So, according to one theory advanced at the trial by the Marions' attorneys, Bollinger decided to sell the "Burgundies" to unsuspecting clients. But in late 2000, unrelated corruption scandals shook Burgundy and made Bollinger nervous that its scheme might also become public.
At first, Bollinger tried to sell back the bad stock to the Marions, both parties agree. In January 2001, Bollinger informed the Marions it would alert police unless the Burgundians reimbursed the Champenois more than $8.5 million, according to the Marions' attorneys. The Marions accused Bollinger of blackmail and hypocrisy, and they refused to pay the sum. A few days later, Bizot went to the authorities to disclose the fraud.
Much of the trial was spent accusing Bizot--who broke down in tears--of a cover-up. But no matter when Bizot actually learned of Chanson's fraud, it is important to remember this basic fact: Well before Bollinger came to Burgundy, Chanson's co-owners and managers, the Marions, were in the habit of breaking France's Appellation d'Origine Contrôlée laws.
The Marion brothers admit their guilt
The Burgundian vintners, not the Champenois, are the source of the scandal. The Marion brothers pled guilty to the fraud charges, as did an employee, Chanson cellar master Marc Cugney, 44, who actually concocted the various fraudulent wines.
The Marions each face a sentence of one year in jail and a fine of 30,000 euros. Cugney faces six months in jail and a fine of 5,000 euros.
Under French AOC laws, a bottle labeled from a specific appellation--whether a single vineyard site or a broader area--must be made from grapes from that exact site or area. The laws were designed to guarantee the authenticity of AOC wines, so that consumers would know that the wines came from the place indicated on the label.
Yet Chanson flouted those laws, mislabeling wines with specific AOC designations even though the wines were blended from different Burgundy appellations, according to investigators. Worse, many bottles labeled AOC Burgundy included vin de pays from the Languedoc region, in southern France. One specialty was to boost Burgundies with deep-colored Alicante; such blends typically consisted of 4 percent to 8 percent Alicante, although one contained 79.2 percent vin de pays, the prosecutor said.
Under the Marions, who supervised Chanson's winemaking from 1966 to mid-2000, "there was massive fraud," said Dumarets. "There was fraud for many years," he added, not just during difficult vintages, when poor weather affected wine quality. During the 2000, 1999 and 1998 vintages, about one-quarter of Chanson's stocks had been illegally blended, according to investigators.
"This is not a fraud where people wanted to add color in certain weak vintages," concluded Jean-François Manière, the attorney for France's Institut National des Appellations d'Origine, which oversees the country's wine regions. The INAO, which joined the case in the French equivalent of an American "friend of the court" brief, asked the court to fine Chanson 119,000 euros for the damage it had done to the reputations of the country and its AOCs. "Transgression was automatic," said Manière. "They systematically cut Burgundy with vins ordinaires. These people manufactured appellations."
The Marions admit they didn't forewarn Bollinger about their modus operandi. The brothers never held a formal meeting with Bizot to detail how they took "certain liberties" to make their wines, but they did indicate that they used "traditional Burgundy practices," said one of their two attorneys, Alexis Dejean de La Bâtie.
Bizot testified that he didn't "decode" the wording the Marions used that indicated their winemaking methods were illegal. The Marions can't believe Bizot didn't know about Burgundy's widespread cheating. "The Marions weren't the only ones who did it," said de La Bâtie.
"The Marions thought we knew, but we didn't know," said Bizot's attorney, Alain Lecoq. "The Marions say, 'Don't be naïve; it's always been done, so don't tell us you didn't know.'"
How prevalent is cheating in Burgundy? I asked François Marion, 75, after the trial. "It's known on every street corner. It's no secret."
The cellar master as accomplice
Marc Cugney, the cellar master, said he had made illegal "Burgundies" since he joined Chanson in 1985, always with the Marions' consent. Cugney kept detailed records in two cellar books, one blue and one yellow. He knew he was breaking the law, he told the judge, Chalopin.
"Why did you get into this mechanism?" Chalopin asked, holding up the incriminating cellar books. "An enologist has a conscience, and you could have said, 'I will leave the enterprise.' Did you get some benefits doing this, a bonus?"
"No," replied Cugney. He committed his crimes "without coercion and fully aware of what he did," he testified, adding that he followed his bosses' instructions. (Cugney--who still works at Chanson--earns 2,300 euros a month, as revealed at the hearing.) He provided examples of the scam. In one case, he blended various wines and passed the results off as 100 percent premiers crus Beaune Clos des Mouche or Beaune Grèves.
The Marions argued that their blending tactics produced wines that were good copies of AOC Burgundies. Not only their buyers thought so, but so did the Burgundian experts who taste wines before approving the AOC label--France's famous agrément. "We submitted our wines, and they systematically passed the agrément, said Philippe Marion, 72.
The Marions' other lawyer, Olivier Morice, argued that his clients were convinced that consumers were better off with these "improved" wines.
"That's not an excuse to commit fraud and falsify," said the prosecutor, glaring at the Marions. "Dealers who sell drugs at the corner of the square also do it to satisfy their clients. I don't deny their clients are happy, but it doesn't make drug dealing right."
Is corruption endemic to Burgundy?
Faced with the facts of the fraud, what should Bizot have done?
Robert Drouhin, president of Maison Joseph Drouhin, one of Burgundy's most prominent wine companies, offered some pointed advice in dramatic testimony. Before the hushed courtroom, the lawyers and the judge worked in tandem to solicit information about the inner workings of Burgundy.
What would he do if he found 700,000 bottles of illegal wine in a company purchased by Drouhin?
"I'd cancel the sale," he said. "The situation is dangerous, both commercially and legally. I would withdraw the offer without causing harm to the seller."
And if Drouhin discovered the illicit wines after the sale was finalized?
"That would be very annoying. I would have experts taste the wines. I'd destroy bad or atypical wines. But it's more than likely that a large majority of these wines would be acceptable," he answered.
Would he commercialize those wines?
"I think I'd commercialize them."
"As AOCs?" the judge asked.
"I'd declassify them to the lowest appellations in Burgundy, such as Hautes Côtes."
"You'd sell illegal wine?" one of the lawyers asked. "You say publicly that Maison Joseph Drouhin would have imagined to commercialize AOC Burgundy that wasn't allowed to be commercialized?"
"If experts had been saying, 'Your Burgundies are good,' I think I'd do so," Drouhin replied. "I'd take that sort of risk."
Drouhin's testimony played right into the Marions' defense. Selling illicit wine was done all the time in Burgundy, Morice said, but a "Machiavellian" Bollinger, driven by financial motives, chose to denounce the Marions. Now, Morice argued, his clients deserved a light sentence; unlike Bizot, they told the truth and pled guilty.
It was 10 p.m. when Morice finished his closing argument. As his voice rose in a crescendo, almost to the point of shouting, Morice attacked Bizot for going to the police and spilling the beans.
"Drouhin said he would have declassed the wines, but you didn't," the attorney said. "Chanson is a scandal for Burgundy. You should never have revealed what you know."
Bizot, the Champenois, had broken Burgundy's omertà, its code of silence. For that, on Nov. 17, he might be sentenced to jail.
