Sarkozy caught up in heiress cash scandal

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New allegations of illegal campaign donations from France's richest woman piled pressure Tuesday on President Nicolas Sarkozy, who declared himself the victim of a political smear campaign.

The French leader reacted angrily to reports that police were probing claims his election campaign received illegal donations from L'Oreal heiress Liliane Bettencourt.

He now faces mounting pressure to address the allegations directly and mew calls for a clear-out of tainted colleagues, including embattled Labour Minister Eric Woerth, who is at the centre of the scandal.

"I would love it so much if the country could excite itself over the big problems ... rather than to get wrapped up in the first horror, a slander with only one goal, to smear with no basis in reality," Sarkozy said.

Elected in 2007, Sarkozy's approval ratings are at their lowest levels ever and he faces an uphill battle to get his reform programme back on track before seeking reelection in 2012.

On Tuesday, an opinion poll by the Ifop agency found that 69 percent of French voters would like to see an immediate cabinet reshuffle.

Already at the weekend two junior ministers were forced to step down over reports that they had spent public money on private jet rentals and cigars.

The new claim is that Woerth, treasurer of the ruling UMP as well as a key minister, received 150,000 euros (188,000 dollars) in cash from Bettencourt. Donations to politicians and their parties are strictly limited in France.

The investigative website Mediapart interviewed a former Bettencourt accountant, identified as Claire T., who alleged the heiress often gave cash to right-wing politicians.

The accountant's lawyer, Antoine Gillot, confirmed to AFP that his client had told police about the alleged payments.

According to Mediapart, the accountant also alleges that Sarkozy personally received envelopes of cash after dinners at Bettencourt's mansion when the future president was mayor of the Paris suburb of Neuilly.

An aide to Sarkozy dismissed the report as "totally false". Woerth denied any wrongdoing and said he would not resign.

My party has not received a single illegal euro. That's enough! I have been treasurer for eight years. No-one can say I did anything wrong," he said.

Sarkozy defended Woerth after it was revealed that his wife worked for a firm managing Bettencourt's 17-billion-euro personal fortune.

But, with the head of state now personally implicated, key right-wing allies, including the UMP leader in parliament, Jean-Francois Cope, called on the president to "speak to the French people" about the scandal.

Presidential aides confirmed he was considering making a televised address.

Benoit Hamon, spokesman for the opposition Socialists, said that the allegations meant Woerth no longer had the "legitimacy" to lead the government's attempts to reform pensions.

Claire T. told police and Mediapart that Woerth received the donation in cash in March 2007, ahead of Sarkozy's election in May.

Woerth has since served as Sarkozy's budget minister charged with fighting tax evasion by personalities like Bettencourt, and now as labour minister is fighting to push through pensions reform.

Mediapart quoted Claire T. as saying she had been asked for 150,000 euros by Bettencourt's financial adviser Patrice de Maistre, who told her he would give it "discreetly" to Woerth at a dinner.

The accountant, who worked for Bettencourt for 12 years until 2008, said she believed Sarkozy had 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 scandal implicating the heiress 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 conversations, in which she and Maistre -- who denies all the allegations -- allegedly plotted to evade taxes by moving assets abroad ahead of a crackdown ordered by Woerth.

© 2010 AFP

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