Sarkozy rejects cash claim, says France not corrupt

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President Nicolas Sarkozy firmly rejected on Monday allegations that he took illegal cash donations from France's richest woman, declaring "France is not a corrupt country."

Sarkozy backed Labour Minister Eric Woerth, accused of accepting 150,000 euros from L'Oreal heiress Liliane Bettencourt during the 2007 presidential race and of conflict of interest because his wife helped manage the billionaire's wealth.

"France is not a corrupt country," the president declared in a prime time interview on French television. "The political class, left and right alike, is in general honest. French public officials are people of great rigour."

The three-week scandal has weakened Sarkozy, whose poll ratings have hit their lowest level since he took office in 2007 and who is fighting a difficult battle on pension reform, a centrepiece of his reform agenda.

Sarkozy said it was a disgrace to accuse him of visiting Bettencourt's home to pick up illegal cash donations, and suggested those behind the allegations were taking part in "defamation, a campaign."

"I was described as someone who for 20 years has been going to Mrs Bettencourt's house to pick up envelopes. It's shameful," he said.

The president insisted Woerth will stay on as labour minister to enact pension reform, going before cabinet on Tuesday to present a bill raising the retirement age from 60 to 62 before it heads to parliament in September.

"Eric Woerth is an honest man, a competent man. He enjoys my full confidence," Sarkozy said, during the interview broadcast on state television from the gardens of the Elysee presidential palace.

But Sarkozy said he would advise Woerth to step down as treasurer of the majority UMP party to "devote himself exclusively to pension reform."

And, in a gesture to critics who say Woerth's party and ministerial roles are incompatible, Sarkozy said he wanted a cross-party commission to draft guidelines "to avoid in the future any form of conflict of interest."

He spoke after police searched seven homes and offices including that of a friend to Bettencourt as part of several probes involving the billionaire, from a family feud to allegations of illegal campaign financing.

Police from the financial crimes unit raided the Paris apartment of photographer Francois-Marie Banier, who is accused by Bettencourt's daughter of making millions by taking advantage of her mother's frailty.

The multi-layered affair started when a website in June published reports of conversations secretly recorded by Bettencourt's butler, which revealed that the L'Oreal heiress plotted to evade taxes.

Woerth, who formerly served as budget minister with responsibility for stopping tax evasion, came under fire as his wife worked for the firm managing Bettencourt's 17-billion-euro fortune.

The minister said Monday he is considering stepping down as chief fundraiser for Sarkozy's governing UMP to put an end to the conflict of interest claims.

Bettencourt, heiress to the L'Oreal cosmetics fortune, allegedly discussed political donations to the UMP with her financial adviser in the tapes released last month.

The 87-year-old shampoo billionaire is France's richest woman and ranks 17th on the Forbes list of the world's wealthiest people.

She was also one of the biggest beneficiaries of a tax break for the wealthy passed by Sarkozy after he won the 2007 election, receiving a lawful 30-million-euro rebate.

Ahead of the television appearance, an internal government report was released stating it could find no evidence Woerth intervened to protect Bettencourt's affairs from scrutiny by tax inspectors.

But Sarkozy's critics, including the opposition Socialist Party, have demanded an independent investigative magistrate be appointed to probe all the allegations surrounding the Bettencourt fortune.

© 2010 AFP

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