French minister hit by new accusations over heiress refund

2nd July 2010, Comments 0 comments

France's embattled Labour Minister Eric Woerth hit back on Friday at reports that he agreed a 30-million-euro tax refund for L'Oreal heiress Liliane Bettencourt, who is at the centre of a growing scandal.

The Mediapart website reported that Woerth had approved the cheque for France's richest woman in 2008 when he was budget minister, in line with a law capping income tax for high earners.

"Contrary to what is being said, Eric Woerth, then budget minister, did not 'give his approval' for the payment of Mrs Bettencourt's tax refund," said a Labour Ministry statement.

"The budget minister does not intervene in any circumstance in this procedure," it added.

Woerth, a high-profile minister in Sarkozy's government, is facing calls for his resignation over his links to Bettencourt after taped conversations revealed last month that she plotted to evade taxes.

He has also been accused of a conflict of interest because his wife worked for Bettencourt's estate while he was budget minister.

The scandal comes at a delicate time for the right-wing government, which is trying to push through a sweeping pension reform and a freeze on public spending.

The Elysee palace has stood by Woerth in the turmoil, but parliament speaker Bernard Accoyer on Wednesday bowed to opposition calls and agreed to set up a commission of inquiry into the affair.

There has been an almost daily stream of revelations surrounding Bettencourt and Woerth, who as budget minister was tasked with policing tax evasion and who also is the governing UMP party's treasurer, in contact with donors.

"Everything in this affair is absolutely contrary to the public interest," said former Socialist prime minister Laurent Fabius, who said Woerth would probably be forced to resign.

"I believe that it is very difficult when you are in his predicatment to lead an important reform programme," Fabius told RTL radio.

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

© 2010 AFP

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