Paul Desmarais: A kingmaker expounds

There are business icons who, for all their genius, display about as much aesthetic ambition as a semi-detached in the suburbs. Warren Buffett comes to mind.

There are business celebrities who, for all their dough, can't buy good taste. Donald Trump leads the pack.

Then there's Paul Desmarais. The Sage of Sagard - Sagard being the name of Mr. Desmarais' massive estate in Quebec's Charlevoix region - embodies the noblesse and intellectual intrigue of a Renaissance doge.

Turns out, he's even got the castle of one.

His Sagard residence, long rumoured to be a replica of Versailles, is in fact modelled on La Malcontenta, the 16th century Palladian villa built for descendants of Venice's once ruling Foscari family.

Mr. Desmarais, 81, imparts this rich piece of trivia in a captivating interview published last week by the French magazine Le Point. Frankly we're jealous: It is the first time in years that the Power Corp. of Canada patriarch has sat down with a journalist anywhere.

The French are understandably curious about their new President's influential ami canadien. Mr. Desmarais was largely unknown to the mainstream French media until he and Belgian partner Albert Frère lorded over Nicholas Sarkozy's election victory bash 14 months ago at a swanky Champs-Élysées restaurant.

Then in January, Mr. Sarkozy awarded Mr. Desmarais the Grand Cross of the Legion of Honour. You can count on a hand or two the number of foreigners who've been granted France's highest distinction. It's usually gone to people who have literally changed the world, like Lech Walesa and Vaclav Havel.

For the French, though, Mr. Desmarais has changed their world by pressing Mr. Sarkozy toward the top. "If I am President of the Republic, I owe it in part to the advice, friendship and loyalty of Paul Desmarais," Mr. Sarkozy conceded once in the Élysée Palace.

Though the President's approval ratings have fallen like a failed soufflé, Mr. Desmarais remains loyal to the world leader (another one) he has mentored since giving Mr. Sarkozy a lift on his private jet in 1995. Mr. Sarkozy has spoken of the "long walks in the forest" at Sagard during which Mr. Desmarais pushed him to pursue his goal.

"When he came to Quebec, I encouraged him," Mr. Desmarais tells Le Point. "France needs him. ... If France continues with social programs that it is unable to afford, it's on the wrong track. Sarkozy has arrived at the height of a [global]financial crisis. But he has a vision for France. He's the right man for the situation." Mr. Desmarais' influence over Mr. Sarkozy has been detected in the latter's move to redefine Canada-France relations by getting cozier with Ottawa and distancing la mère patrie from its officially neutral (but unofficially amenable) stance toward Quebec independence.

"Do you feel Québécois?" Le Point journalist Patrick Bonazza asks Mr. Desmarais, a native of Sudbury, Ont. "I am Franco-Ontarian by birth. I chose Quebec to live. I am Canadian. Canada is my country. Quebec is my province," the billionaire replies. "If Quebec separates, it will be its end." Of course, Mr. Desmarais' sway with Mr. Sarkozy goes beyond diplomacy. One of the President's first moves after taking office was to relaunch the long-stalled merger between state-owned Gaz de France and the electric and gas utility Suez SA to create a massive global power player with €75-billion ($121-billion) in sales.

Groupe Bruxelles Lambert, the European affiliate jointly controlled by Mr. Desmarais' Power Financial Corp. and Mr. Frère's Belgian holding company, is the largest shareholder in Suez with 9.5 per cent. It will emerge as the biggest shareholder after the French state in the combined GDF-Suez once the merger closes July 22.

Paul Desmarais Jr., Power's 54-year-old chairman and co-chief executive officer, will oversee the family's interests as a member of the GDF-Suez board. Dad has no doubt his sons (Paul Jr.'s brother André, 52, is Power's other co-CEO) have the right stuff.

"There was never any question they'd be up to it," Mr. Desmarais insists. "I associated my children with the business very early, when they were eight or nine. I brought them everywhere. When I signed a big contract, they were there. I told them: 'Sit there and listen.' " It's not entirely clear whether the elder Mr. Desmarais is still giving orders, but he does offer free investment advice to his sons and financial whizzes who whipped up the structured investment vehicles now in the eye of the subprime financial storm.

"Wanting to earn one-eighth of 1 per cent more, that's greedy. It's going too far. We've never been greedy."

Now for the juicy stuff. So just how big is Sagard, with its summer staff of 100? "To get Frère going," Mr. Demarais jokes, "I tell him it's bigger than Belgium." Not quite true, but it does have a doge.