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Sarkozy Struggles With Corruption Allegations

Scandal accusations have snowballed and created turmoil for President NIcolas Sarkozy as he tries to pass his pension bill through parliament.
The French media call this summer President Nicolas Sarkozy's season in hell.

They may be right. Sarkozy, who came to the presidency in 2007 as a media star, and then became a still greater celebrity by marrying former supermodel and singer Carla Bruni, is now caught in the kind of scandal the French press pursues relentlessly.

It is a scandal that mixes power, money, sex, secret recordings, and allegations of payoffs with envelopes stuffed with cash. Day by day, the scandal is turning into Sarkozy's greatest political test in his three years in office.

The scandal begins with the femme fatale in the story, who also happens to be the world's third richest woman. She is Liliane Bettencourt, the heir to the L'Oreal cosmetics fortune with a net worth of about $20 billion.


Bettencourt, who is 87 years old, usually lives far from the spotlight. But this summer, her picture is everywhere in the French press often juxtaposed with that of Sarkozy himself.

According to Bettencourt's former accountant, they had a financial relationship that allegedly included the handover over of some $190,000 by Bettencourt to Sarkozy's political party -- Union for a Popular Movement -- to help fund his 2007 presidential campaign. The allegations have gained enough momentum that Sarkozy appeared on public television on July 12 to deny them.

"To be portrayed as someone who for 20 years scurried after Madame Bettencourt picking up envelopes, that's a shameful charge," Sarkozy said. "I'm not surprised to be the target [of such charges], I was ready for that. But I want to say that this [scandal] is a waste of time compared to what people really want from me, and they want something very simple, and that is to get us out of this [economic] crisis."

Bettencourt's accountant, Claire Thibault, has told police she helped to raise the cash payments for Sarkozy's campaign and that the money was handed over to the treasurer of Sarkozy's party, Eric Woerth.

Sarkozy advised Woerth, who is also labor minister, to give up his treasurer's post and Woerth told reporters on July 13 he would do so.

Woerth has been particularly controversial in the scandal because his wife was a key financial adviser to Bettencourt while he was budget minister and while the billionaire was allegedly hiding part of her fortune in Swiss bank accounts.

Political Tones

Sarkozy has dismissed the whole scandal as politically motivated, in part because the accountant went public with her charges in a left-wing website, Mediapart.

Specifically, the president has accused the opposition Socialists of trying to use the scandal to derail his government's effort to raise France's pension age by two years to 62. The government approved the text of the draft law on July 13 and is now due to send it to parliament where a tough fight is expected.

But no amount of political name-calling seems likely to stop the Bettencourt Affair -- as it is dubbed in France -- from growing more dangerous for Sarkozy and his likely second presidential bid in 2012.

After all, the French police are taking a serious interest in the case, with raids on the homes of several of Bettencourt's advisers and friends in search of more clues.

Meanwhile, more and more material is being leaked to the press that paints almost all the characters, guilty or not, in an unfavorable light.

The picture that is emerging is precisely that of the old, rich, and class-conscious France whose traditions the populist Sarkozy promised to free the country from when he was elected president in 2007. He even coined a campaign slogan for his new-beginning policy, vowing a "rupture" with the past.

Instead, the French public is now receiving a daily media dose of the Bettencourts' moneyed life thanks to three separate investigations into the family's affairs.

Multiple Probes

The first investigation is the cash-for-campaign scandal that threatens Sarkozy. It includes additional allegations that the Bettencourt family also made payments to Sarkozy while he was mayor of Neuilly, the site of the Bettencourt's mansion.

The second investigation is into whether Madame Bettencourt evaded taxes – a charge that has emerged from secret tapes made by her butler of conversations between the billionaire and her legal and financial advisers.

And the third investigation is into whether Madame Bettencourt's closest friends and advisers are seeking to defraud her of millions of dollars by pressing her for gifts. Those legal charges have been filed by Bettencourt's daughter.

Whether the allegations will coalesce into a body of evidence remains to be seen. But whether they do or not, the images of power, greed and venality they seem to offer couldn't come at a more sensitive time for either Sarkozy or for ordinary French citizens.

Sarkozy's drive to raise the retirement age is part of austerity measures he hope will help France recover from the global economic crisis.

Effect On Popularity

But the retirement age overhaul is highly unpopular, with some 2 million people taking to the streets in protests last month. Partly as a result -- and partly due to his now being associated with the wealthy Bettencourts who have no retirement worries -- Sarkozy's own ratings have plunged.

Marc Perelman, French politics editor for news channel France 24, says that the scandal is almost certain to hurt Sarkozy's political prospects.

"This scandal which mixes a lot of things, money, politics, tax evasion, rich people, at a time when the government is asking everyone to tighten their belts, is certainly damaging, especially so because the president doesn't seem to be able to put out the fire," Perelman says.

But he says nobody should count Sarkozy out or underestimate his abilities to bounce back.

"The 2012 presidential race is still far away and we know that Nicolas Sarkozy is a very, very good campaigner, probably better when his back is against the wall than when things are going rather normally," Perelman says. "So no one should write him off."

A survey last week showed Sarkozy he would lose in 2012 general election to Socialist Party leader Martine Aubry.

with material from agency reports