How a French Smart‑Card Pioneer Fell Victim to a US Intelligence‑Backed Takeover

Introduction

The story follows Marc Lassus, founder of the French smart‑card company GM Plus (later part of Gemalto), and how his once‑dominant firm was gradually overtaken by American financial and intelligence interests.

The Birth of a Smart‑Card Giant

• 1988 – Marc Lassus, a former Bou‑engineer, leaves his job at 48 and creates GM Plus with five‑six fellow engineers.
• The company focuses on the emerging chip‑card (smart‑card) technology invented by Roland Moreno.
• Early backing comes from France Télécom, which needs a secure alternative to magnetic‑stripe cards.
• By 1998 GM Plus employs ~6 000 people, sells 3 million cards per month in Europe and generates €200 million in revenue, with a 50 % annual growth rate.
• Its chips are used in SIM cards, banking cards, passports, encrypted TV, etc., and are considered “inviolable” because only proprietary cryptographic keys can unlock them.

The Quest for the US Market

• The US market is essential for global leadership, but American telecom standards do not use GSM SIM cards and banks still rely on magnetic stripes.
• Initial attempts to partner with US payment‑terminal leader Datacard fail.
• Lassus then approaches the German Quant family, who acquire a stake in GM Plus and a Datacard plant in Philadelphia, but the US still resists French technology.

The TPG Deal and Internal Conflict

• In 1999 a US private‑equity firm TPG offers a $550 million investment for a 33 % stake, a size and structure unusual for a thriving company.
• The board, fearing loss of control over the cryptographic keys, initially rejects the offer.
• Lassus, convinced the deal is the only way into America, negotiates a reduced 26 % stake, granting TPG the right to appoint the CEO and five of nine board seats.
• The deal closes, opening US operations, but also introduces a new management team led by Antonio Perz (CEO) and a new CFO.

CIA‑Linked Takeover

• Within months, Perz makes bizarre strategic decisions (abandoning the “tele‑card” product, selling a profitable subsidiary, mishandling investor communications), causing the share price to plunge.
• Parallel oddities appear: trash‑can searches, repeated break‑ins at Lassus’s home, and a mysterious call from a tech firm Landis & Gear warning of TPG’s financial troubles.
• Investigations reveal that the new GM Plus CEO, Alex Mandel, is a senior operative of Inqutel, a CIA‑backed investment fund, and also sits on the board of Benz (Business Executives for National Security).
• The CIA’s interest stems from the fact that GM Plus stores the secret cryptographic keys used in millions of SIM, banking and passport chips; controlling those keys would give the US unparalleled access to global communications.

Collapse and Aftermath

• By early 2001 the board, now dominated by TPG and its American allies, forces Lassus to resign as chairman; he loses all operational authority.
• The company’s stock collapses, the French regulator AMF accuses Lassus of market manipulation, and he is forced to repay a $70 million loan, leading to personal bankruptcy.
• GM Plus is eventually sold in 2006 to Axalto, forming Gemalto, which later becomes part of the French defense group Thales in 2019.
• Declassified NSA documents (2013) later confirm that the agency had indeed infiltrated and exploited GM Plus’s key‑management infrastructure.

Lessons Learned

• Strategic technology (cryptography, secure identification) is a national‑security asset, attracting covert foreign interest.
• Minority‑blocking stakes can give investors disproportionate control over critical decisions.
• Due‑diligence on investors must include geopolitical risk assessment, not just financial terms.
• European firms need robust safeguards—state support, diversified ownership, and transparent governance—to protect sovereign technology.

The rise and fall of GM Plus shows that when a company holds the keys to global digital security, it becomes a target for foreign intelligence and finance; safeguarding such strategic assets requires vigilance far beyond ordinary business negotiations.