Sarkozy government under fire in tax evasion row

30th June 2010, Comments 0 comments

France's labour minister faced Wednesday a wave of attacks in a tax evasion scandal involving the heiress of the L'Oreal cosmetics empire, which has sparked allegations of government corruption.

"The poison of the Woerth affair," read the front-page headline in Le Parisien newspaper above an article that said President Nicolas Sarkozy's right-wing government was in "torment" over minister Eric Woerth.

"Can he hang on?" wondered the left-wing Liberation, which said that Woerth's double role as minister and treasurer of Sarkozy's UMP party was untenable.

Those damaging headlines came a day after the president's 2007 election rival, the Socialist Segolene Royal, told TF1 television that "the Sarkozy system is today corrupt."

Woerth was already making headlines in recent weeks as the man overseeing pension reform that is so unpopular that last week hundreds of thousands of French took to the streets to protest against it.

Then on June 16 a website published transcripts of tapes secretly made by the butler of France's richest woman, Liliane Bettencourt, the L'Oreal cosmetics heiress with a fortune worth 17 billion euros (20 billion dollars).

The taped conversations between Bettencourt and her financial adviser reveal that the 87-year-old allegedly hid 80 million euros in Swiss bank accounts while making big donations to friends in the ruling UMP party.

The butler's tapes were the latest twist in a long-running family feud between the billionaire and her daughter, who claims Bettencourt is mentally unfit after she gave more than a billion euros to a photographer friend.

That case was due to reach court on Thursday but may be postponed due to the emergence of the secret tapes.

The Bettencourt affair turned political when it emerged from the recorded conversations that Woerth's wife Florence worked for a company that managed part of the heiress' fortune, while he was budget minister.

French papers and opposition politicians were quick to see a possible conflict of interest.

They called for an inquiry to determine whether the Woerths knew of the alleged tax fraud and noted that Woerth last year presented Bettencourt's financial adviser with the Legion d'Honneur civic award.

Woerth, who as budget minister led a major crackdown on tax evasion, and his wife vehemently deny any wrong-doing.

But the attacks continued, and on Wednesday attention had turned to Woerth's dual role as minister and treasurer of the UMP party.

"To dispel suspicion, one can hardly see how he could continue to hold both positions, one of which is partisan and the other governmental," said an editorial in Liberation.

The government has counter-attacked by saying that Woerth's critics are trying to undermine his pension reforms and that he is the innocent victim of a "shameful witch-hunt," as Immigration Minister Eric Besson put it on Wednesday.

The Woerth affair comes on the heels of reports suggesting that several government ministers are living the high life at the taxpayer's expense, while ordinary people are being told to tighten their belts.

In response, Sarkozy moved on Monday to slash perks for members of the government.

© 2010 AFP

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