The age-old tale of the revolving doors in France between government and business is so deeply ingrained in the culture that the French even have a word for it: pantouflage.
Now startups are hiring former government officials too — and attracting increasing scrutiny.
Ex-digital minister Cédric O is the most high-profile former member of Macron’s government to hop on the startup ship, joining headline-grabbing AI startup Mistral in May last year.
But the transition from public to private life is proving far from easy, thanks to onerous anti-corruption rules which require former officials to get approval from France’s ethics watchdog, the HATVP (High Authority for Transparency of Public Life), when joining a new company or starting their own. And the green light can be tricky to obtain.
“A lot of people would love to work for the state but they don’t want their life in the private sector to end. The general approach should be fluidity,” says O, who has become an outspoken critic of the rules.
Ethical watchdogs say that the laws are more essential than ever to maintain trust and transparency in a sector deemed so vital to the nation’s future.
“What’s behind this is the prevention of illegal conflicts of interest,” says Kévin Gernier, advocacy officer for anti-corruption organisation Transparency International. “It’s to prevent any suspicions that a job offer is coming as a reward for a public decision.”
Pantouflage in the age of the startup nation
Pantouflage is not inherently French. From former UK deputy PM Nick Clegg joining Meta as president of global affairs, to George Osborne (previously UK Chancellor) taking up a £650k-a-year advisor job with fund manager BlackRock after he left office in 2017 — high-profile examples of the revolving door abound elsewhere.
But the stars have aligned recently for French startups to attract talent straight from the ranks of the government.
Macron’s fervent embrace of entrepreneurs since he was first elected in 2017 has made the tech sector a centrepiece of political discourse. And so, recent years have seen a growing number of French ministers and government officials taking board seats at startups, joining VC firms, or launching their own funds.
“The development of startups in France, the fact that there are more and more companies of a significant size, enables this type of crossover,” says Yedidia Levy-Zauberman, VP of public affairs at French AI startup Owkin and himself a former government official.
“There is also a need created by the emergence of startups that are innovating and opening new legal and regulatory questions. That’s a space that makes sense for ex-officials to fill.”
Carbon tracking platform Sweep’s chief impact officer is Julien Denormandie, previously the minister of agriculture. Élisabeth Moreno, ex-minister of gender equality, sits on the board of French investor Ring Capital and refugee tech startup Each One. Florence Parly, former minister of the armed forces, joined the board of growth investor Jolt Capital.
Perhaps no shift from government to tech drew greater attention than O’s.
After leaving the government in 2022, O was invited to join the board of IT multinational Atos — a move that was blocked by the HATVP on the grounds that the company had benefited from state subsidies issued by the digital ministry in O’s time.
O did receive approval to create an advisory firm called Neopunto, through which he became an investor and cofounder of red-hot GenAI startup Mistral — but he’s still frustrated by the Atos decision.
In a blog post, O described the outcome of this ruling as a “collective catastrophe”, showing that back-and-forths between the private and the public sector are “almost impossible”.
The only way the government can attract the very best people from diverse backgrounds, he said, is to reform these ethical rules.
Stopping illegal pantouflages
French law has stated for decades that ex-politicians are not allowed to work, advise or invest in any company that they have signed contracts with or that has been directly affected by a decision they made while in government, for up to three years after leaving their duties. Failure to comply risks up to three years in prison and a €200k fine.
The HATVP was created in 2013 to, among other duties, better implement the law by monitoring all transfers to the private sector. Before taking up a new position, politicians have to take their case to the organisation — which rules whether or not their new role is legally compliant.
“The regulatory framework does not at any point forbid all mobility between the public and private sectors,” says Transparency International’s Gernier. “You could even say that the HATVP has a guiding role.”
“Cédric O was lucky that the HATVP stopped him from joining Atos, because if he had, he could have been prosecuted for illegal conflict of interest.”
But for the non-traditional officials recruited into government, the rules can come as a shock. Such was the case for Élisabeth Moreno.
A former entrepreneur who became an executive at Dell in Africa, Moreno joined Macron’s government as minister of gender equality and diversity in 2020.
“I think the intention of president Macron to get people from the civil space to join politics is very good,” Moreno said. “But nobody prepares you.”
When Moreno decided to return to the private sector after Macron’s re-election in 2022, she received a shock: any work for the next three years would have to be approved by the HATVP.
At one point, when she was seeking approval to work with a venture firm, the partners found that internal documents they had shared were disclosed by the HATVP. In other cases, she had to turn down potential clients who wanted to work with her confidentially because all such jobs must be publicly disclosed.
“Nobody told me that when I would leave the government, I would have to ask for permission to work with everybody,” she said. “It’s a super-heavy process.”
Kat Borlongan was also an entrepreneur before she became French Tech director in 2018. When she left the post in 2021, she was offered the job of chief impact officer at Contentsquare. However, getting the approval required running a gauntlet of interviews with ethics officials and filling out piles of forms.
“It took me forever,” she said. “I signed my contract for Contentsquare the day before I went to the office because that's how long it took to clear it with the government.”
A “maximalist” application of the law
The rules can trip up even the most savvy government officials.
Fleur Pellerin was a minister between 2012 and 2016, first for SMEs and digital, and then for culture. During her time in government, she created the government’s La French Tech Mission, which has become emblematic of its efforts to catalyse entrepreneurship.
She subsequently left the government to found VC firm Korelya Capital, which was “orange-lighted” by the HATVP — meaning the authority gave her the go-ahead to create the company, under the condition that she wouldn’t, for the next three years, do any business with companies that she had dealt with as a minister.
The same year, Korelya benefitted from a €200m anchor investment from South Korean internet conglomerate Naver Corp — a company that Pellerin had signed a letter of intent with during her time as culture minister, to facilitate the broadcast of French content in South Korea during events celebrating Franco-Korean relations.
This got the attention of the HATVP and triggered what became a three-year investigation by the financial prosecutor. The case was dismissed in 2021, but Pellerin says that it significantly impacted her fundraising efforts.
“In 2019, I started raising for a second fund, and that’s exactly when this started,” she says. “A lot of institutionals have compliance requirements and if there is an ongoing investigation, they won’t take the risk.”
Pellerin says that her example is reflective of a “maximalist” application of the law that is detrimental to both the public and the private sector.
“We have to prevent corruption cases, and that requires an intelligent interpretation of the law,” she says. “The problem is that the way the law is interpreted now means that you could have shaken someone’s hand at a social event and you can’t work with them later.”
“We must not completely stop people who work in the public sector from reconverting because circulation is what enables the two sectors to understand each other.”
6% unfavourable rulings
In 2022, of the 581 rulings issued by the HATVP on government officials’ moves between the public and the private sectors — a record year due to Macron’s first five-year-term ending — only around 6% were deemed incompatible.
The majority (80%) of decisions were favourable with conditions; typically, that no business be undertaken with companies that an ex-minister had signed contracts with during their time in office.
“It isn’t the case that there is a strict interpretation of the law by the HATVP,” says Transparency International’s Gernier.
“It’s an exaggeration to say that it is a barrier for those who would want to work in the government… Working for a ministerial cabinet remains a huge career boost rather than an obstacle.”
HATVP president Didier Migaud sees its role as beneficial to government employees by ensuring they avoid any legal jeopardy while maintaining public trust that government officials are not leveraging their political positions for personal profit. In fact, he proposed expanding the HATVP to cover more public functions.
“We believe that these developments would help restore citizens' confidence in their representatives,” he said during an appearance at a French Senate hearing.
“The High Authority is sometimes accused of accentuating a form of suspicion towards public officials. Our controls demonstrate that the vast majority of public officials carry out their mission with probity.”
An entrepreneur at the time, former digital minister Mounir Mahjoubi was a strong supporter of the HATVP when it was created in 2013.
He was in the process of launching a new startup when he became a minister in 2017. The moment the appointment was officially made, Mahjoubi was forbidden from making any contact with his associates: no calls, no emails, no meetups for coffee.
He couldn’t even call to say he would no longer work there. A representative was appointed to handle all such contact on his behalf.
“It was quite a shock for everyone,” Mahjoubi said.
After Mahjoubi left, he created and shut down another startup and then, more recently, launched a tech M&A advisory firm called Matin Partners.
While he wasn’t directly impacted, he would like to see the rules changed to lift the prohibitions on work and keep only the requirement for public disclosures. For Mahjoubi, it’s a necessary step to recognise the changing demographics of people working in the government.
“You cannot tell someone that becoming the minister of a department is the end of their work in that field,” he said. “It's impossible. It's unacceptable.”
“It’s okay when you appoint people who are 60 years old because they are at the end of their careers. But I was 36 when I left the ministry. I still have more than 25 years to work.”
