Attali, meet your Alamo?

Bernard Attali, a well-connected former Air France chairman, joined the buyout group last month to help counter nasty French media coverage that has gone so far as to charge that TPG is a CIA front. "My principal role will be that of an ambassador," says the 60-year-old businessman, who was an adviser to French prime minister Pierre Mauroy from 1981 to 1984.

TPG can trace much of its unpopularity to its purchase three years ago of a 26.4 percent stake in Gemplus, a money-losing French manufacturer of electronic chips. The company was struggling under founder Marc Lassus. But when a TPG-led investor group pushed Lassus off the board last December -- after bringing in an American, former AT&T COO Alex Mandl, a few months earlier to restructure the company -- it set off a furor in France.

Critics homed in on Mandl's previous role as a member of the board of the CIA's venture capital arm, In-Q-Tel (see story, page 101). Workers, government officials and even French business leaders have suggested that Mandl and TPG are engaged in a covert plot to transfer the company's assets -- and technology -- to the U.S. TPG has dismissed the charges as "ridiculous."

Nonetheless, Attali, who most recently was chairman of Paris's economic development agency, is supposed to help TPG avoid future faux pas. "I will counsel TPG on the economy, the companies and the key men of France so they can do their job as investors," he tells Institutional Investor.

A TPG spokesman denies that Attali's appointment is related to the Gemplus controversy. Instead, he says, it is "recognition that France is a promising market for future deals." Bien sûr!