Sarkozy’s financial scandal


French satiric take on Sarkozy's plans to cut pensions

From the Financial Times in England:

French ministers quit in expenses scandal

By Scheherazade Daneshkhu in Paris

Published: July 5 2010 15:29 | Last updated: July 5 2010 15:29

Two ministers in the French government have resigned over separate expenses scandals as Nicolas Sarkozy, president, struggled to regain credibility after accusations of a potential conflict of interest.

The sacrifice on Sunday of the two junior ministers – Alain Joyandet, state secretary for overseas development, and Christian Blanc, state secretary for the Greater Paris region – fuelled speculation that Mr Sarkozy was not prepared to part with Eric Woerth, his social affairs minister, over allegations of a conflict of interest involving the tax affairs of Liliane Bettencourt, France’s wealthiest woman.

President Sarkozy had criticised the behaviour of the two junior ministers and made clear they would not be re-appointed in a cabinet reshuffle planned for October.

Mr Blanc caused a public furore last month after his office disclosed it had spent €12,000 on cigars. He admitted having smoked one-third of the cigars and was ordered to pay the full bill.

Mr Joyandet spent €116,500 on a private jet to attend a conference in Martinique, when he could have taken a scheduled flight.

The revelations sparked fury about the waste of public funds at a time when the government is cutting back on public spending. The government has let it be known that in a further cost-cutting measure the two men will not be replaced.

The expenses scandals have erupted at the same time as revelations regarding the tax affairs of Ms Bettencourt, the 87-year-old heiress to the L’Oréal cosmetics fortune, which have embroiled Mr Woerth, former budget minister.

Illicit recordings of Ms Bettencourt’s private conversations with advisers triggered a political storm last month after suggestions that Ms Bettencourt’s tax affairs might have avoided public scrutiny because Mr Woerth’s wife worked as a financial adviser to the billionaire.

Mr Woerth, who is now spearheading controversial pension reform as social affairs minister, faces further allegations of a conflict of interest because he is also treasurer of President Sarkozy’s UMP party, to which Ms Bettencourt has made donations.

Mr Woerth denies any wrongdoing but the apparent conflict of interest has unleashed a political storn that shows no signs of ebbing and has proved highly embarrassing to Mr Sarkozy, whose popularity ratings hit a record low at the end of last month.

Mr Woerth has said the attacks against him are politically motivated in order to scupper the sensitive pension reform. “These accusations are scandalous and totally false. The accusations were hurled the very day I announced the pension reform. It’s clearly an attempt to destabilise me.”

He also denies any conflict of interest in his role as treasurer of the UMP and his previous ministerial budget post.

But Mr Woerth’s woes could be compounded if a judge decides this week to broaden an investigation into the secretly-recorded tapes to a tax probe.

6 thoughts on “Sarkozy’s financial scandal

  1. Sarkozy linked to L’Oreal cash scandal

    July 6, 2010 – 6:49PM

    French President Nicolas Sarkozy has been directly linked for the first time to L’Oreal heiress Liliane Bettencourt’s murky finances, with claims his presidential campaign received 150,000 euros ($A224,047) in cash.

    An aide to Sarkozy dismissed the latest reports as “totally false”, as the French government was drawn deeper into a series of scandals that had already embroiled his labour minister and seen two other ministers resign.

    An accountant, identified by the investigative website Mediapart as Claire T, said Eric Woerth, a Sarkozy ally and treasurer of his UMP party, received the donation in March 2007, ahead of Sarkozy’s election victory in May.

    The accountant’s lawyer, Antoine Gillot, confirmed to AFP his client had told police investigating Bettencourt’s finances about the alleged payment.

    Woerth has since served as Sarkozy’s budget minister and is now his labour minister, and faces calls for his resignation after he was accused of conflict of interest in his relations with Bettencourt, France’s richest woman.

    The accountant also claimed that Sarkozy himself was a regular visitor at the Bettencourt family home, where he too allegedly received envelopes of cash when he was mayor of the town of Neuilly, west of Paris.

    The allegations hit Sarkozy at a crucial time as he struggles with plunging popularity and difficult economic reforms while eyeing re-election in 2012.

    His approval ratings are at an all time low of 26 per cent, and a poll conducted by Vivavoice and the daily Liberation just before the ministers’ resignations found 64 per cent of voters think the political class corrupt.

    If the allegations are confirmed, the party payments would be illegal, surpassing the limit of 7500 euros ($A11,202) permitted for political donations to parties and 4600 euros to individuals.

    Mediapart quoted Claire T as saying she prepared envelopes of cash taking care not to leave any written record of the payments to politicians.

    Gillot told AFP that the accountant had been asked for 150,000 euros ($A224,047) by Bettencourt’s financial adviser Patrice de Maistre, who told her he would give it “discreetly” to Woerth at a dinner.

    The woman, who worked for the Bettencourts for 12 years until 2008, said she believed Sarkozy also received envelopes in person while he was mayor between 1983 and 2002.

    “Everyone in the house knew that Sarkozy went to see the Bettencourts to collect money,” Mediapart quoted her as saying.

    The leader of the UMP in parliament, Jean-Francois Cope, said it was time for Sarkozy to “speak to the French people” about the scandal. Le Figaro newspaper reported that Sarkozy is considering making a televised response.

    The scandal involving Bettencourt, the heiress to the L’Oreal shampoo and cosmetics empire, started with secret tapes recorded by the 87-year-old billionaire’s butler and leaked to media last month.

    Woerth’s name came up in the secretly taped conversations, in which the cosmetics billionaire allegedly plotted to evade taxes on her fortune.

    He was further tainted when it emerged his wife Florence had worked for Bettencourt’s estate at the time, helping manage the shampoo billionaire’s private fortune, some of which was held in foreign tax havens.

    Woerth is a key figure in Sarkozy’s plans to get government reforms back on track after the financial crisis and help him prepare for the 2012 election.

    Next week, Woerth is to present a proposed law to reform France’s pension rules and push back the legal retirement age, the centrepiece of Sarkozy’s legislative program.

    Pressured by the scandal, Sarkozy sacrificed international development secretary Alain Joyandet and Christian Blanc, a minister for the Paris region, who both resigned at the weekend after drawing fire over excessive expenses.

    © 2010 AFP

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