Sarkozy tries to weather L'Oreal scandal storm

8th July 2010, Comments 0 comments

President Nicolas Sarkozy's government tried to win back the political initiative Thursday, hoping for a respite from a storm of allegations of illegal donations from France's richest woman.

The scandal over Labour Minister Eric Woerth's ties to L'Oreal heiress Liliane Bettencourt has threatened Sarkozy's flagship reform project, a pensions shake-up that would push back the retirement age.

This week the story took a dramatic turn when a former Bettencourt family accountant told police that Woerth and Sarkozy himself had received illegal payments in person in the form of envelopes stuffed with cash.

Both have furiously denied the charge, which is being investigated by magistrates, and the government hopes to ride out the storm and resume its legislative programme without losing any ministers.

Woerth will present his proposed pensions reform bill to cabinet next week, and in the meantime two developments appeared to offer Sarkozy a glimmer of a hope for a respite from the daily round of allegations.

Firstly, leaked copies of Bettencourt account books appeared only to partially confirm the accountant's testimony, offering no concrete proof that large cash bank withdrawals had ended up in politicians' hands.

Secondly, a report by the government's financial watchdog was expected to exonerate Woerth on another related charge, that in his former role as budget minister he intervened to protect Bettencourt from tax audits.

Neither development draws a line under the scandal, and Sarkozy still faces his lowest ever approval ratings and a summer of labour union protests over the pension reform plan, but the government hopes to regain the initiative.

Meeting centre-right lawmakers Wednesday at the Elysee Palace, Sarkozy told them that he was confident that a report to be issued Friday by government financial inspectors would clear Woerth of a conflict of interest.

"If he did something wrong, I'll punish him, and if he didn't I don't see why I would punish him. But I'm pretty confident that they won't find fault," Sarkozy said, according to people present at the talks.

Woerth's wife Florence used to work for a firm that managed Bettencourt's 17-billion-euro personal fortune, which is under investigation after conversations secretly taped by a butler appeared to reveal tax evasion.

The minister -- who was at the time charged with leading France's fight against tax evasion -- has furiously denied suggestions that he used his position to protect his wife's client from investigation.

According to extracts of Bettencourt records which have been seen by police and obtained by the daily Liberation, accountant Claire Thibout did indeed withdraw 50,000 euros in cash from a family account on March 26, 2007.

Thibout has told police that this sum was given to Liliane Bettencourt, added to 100,000 euros taken separately from an account in Switzerland and then given to Woerth for Sarkozy's presidential campaign.

But, according to Liberation, there is no receipt to show that the 87-year-old heiress received the cash as a single sum.

The shampoo billionaire's lawyer Georges Kiejman told reporters that a 50,000 euro (63,000 dollar) fortnightly withdrawal would used for everyday running costs of a rich household like the Bettencourt's.

"It served to give several hundred or several thousand euros to friends they helped out, to doctors, shopkeepers, bookbinders -- but not to Mr Woerth nor to Mr Sarkozy," he told AFP.

Nevertheless, according to the report, there is a receipt that shows that two months earlier on January 26, a "Monsieur" -- believed to be the widow's late husband Andre -- received 100,000 euros in cash.

"My client is categorical. When you withdraw 100,000 euros in cash for Mr Bettencourt, it's not so he can go to the barber's," Thibout's lawyer Antoine Gillot told Liberation, suggesting that the money had gone to politicians.

© 2010 AFP

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