Special Report

Moneygate

For the love of lucre.

By 7.9.10

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PARIS -- Nicolas Sarkozy has never made any bones about his love of money. The very evening of his election in 2007, he made straight for one of the most fashionable and expensive watering holes on the Champs Elysées -- no Ben's Chili Bowl, this -- to celebrate with similarly money-minded pals. He later told a biographer, with evident pleasure, that among the French president's perks came no fewer than five bona fide chateaux staffed with butlers and maids awaiting his eventual arrival. The wealth, luxury and privilege that have gone with France's top job for millennia, whether monarchy or republic, were his.

Unabashedly enjoying them, Sarkozy looked like a kid in a candy shop with an unlimited allowance: vacations on friends' luxury yachts, courting an Italian model, jetting around the world with a large retinue in tow, reinstating presidential hunting parties for favorites and VIPs à la French kings of yore. "President bling-bling," the French dubbed him, not altogether affectionately. He set the tone for his administration. In this country where sex is freely discussed but money is a taboo subject, that tone said, "Forget your hang-ups about it, money is okay." If Gaullism in the 1960s meant a prickly sense of national pride, Sarkozysm in the early 21st century has come to mean that making money, spending money, flaunting money is acceptable, even for public servants. Easy come, easy go!

Cabinet members duly followed suit. When the secretary of state for overseas development couldn't find a convenient Air France flight to a meeting in the Caribbean, he simply rented an executive jet for $145,625 of taxpayer money. One minister wasn't satisfied with the single official Paris apartment the government generously provides its high officials, so he simply took two of them. Another thoughtfully gave relatives the keys to hers, complete with personal valet and chef. When the junior minister for sports visited South Africa for the World Cup, she booked a luxury hotel suite at $750 a night. The secretary of state for the Greater Paris Region, fond of fine Havana cigars, spent $15,000 on them from the public purse. Under Sarkozysm, why not?

Ordinary French citizens, asked to tighten their belts during the economic crisis, were increasingly shocked as these things came to light. But at least no one accused the Sarkozy administration of outright corruption.

That changed this week as the long-running Bettencourt Affair took a surprise twist. No longer was this merely your ordinary, everyday family squabble between 87-year-old Liliane Bettencourt, heiress to the $20 billion L'Oréal cosmetics fortune -- the world's 17th richest person and France's biggest victim in Bernie Madoff's scam -- and her estranged daughter over a few masterpiece paintings, an island in the Seychelles, and a billion or so in secret bank accounts. The daughter, Françoise Bettencourt-Meyers, sued a celebrity photographer who had befriended Bettencourt mère, accusing him of conning her mother out of $1.25 billion.

Enter a long-serving butler who, disliking what he heard in conversations between Madame Bettencourt and her chief financial adviser, secretly recorded them. The 20 hours of recorded talk revealed much more than the fraught relationship between mother, daughter, and photographer. The adviser and Bettencourt are heard discussing $97 million stashed illegally in foreign accounts. Even more titillating, he mentions that he had hired a certain Florence Woerth to help with her investments.

When the 28 computer disks were handed over to police and leaked to the press, Paris ears pricked up. Woerth? As in Eric Woerth, Sarkozy's former budget minister? The long-time treasurer and chief fundraiser for Sarkozy's UMP party? Could there be a conflict of interest involving France's wealthiest woman and a government minister charged with cracking down on tax evasion while seeking funds for the governing party?

Woerth's wife quickly resigned her job and Sarkozy ritually declared complete confidence in Woerth, now labor minister in charge of pushing through France's needed pension reform. The minister himself, until now considered the administration's Mr. Clean, insisted everything he had done as budget minister and party treasurer was "transparent… clean… clear." There had been no tax breaks for Bettencourt, even though she was known to have given liberally to the party.

Then the plot thickened. Last Tuesday Bettencourt's discontented former accountant blew the cover on years of alleged systematic cash payments to politicians. Including, she claimed, to party treasurer Eric Woerth for Nicolas Sarkozy.

Claire Thibaut, the bookkeeper who worked on Bettencourt's accounts for 12 years until 2008, claims that one day in the spring of 2007, the financial adviser asked her to provide $188,000 in cash for Sarkozy's campaign. (French law prohibits cash contributions to individual politicians of more than $5,750 a year.) Since her weekly withdrawal limit at the bank was a mere $62,500, she turned over what she could and he withdrew the rest from Bettencourt's secret accounts. The adviser denies this.

"Totally false," Sarkozy's spokesman retorted with unseemly haste at the unusually early hour of 8 a.m. But the president has refused to comment on the allegations except to deplore that the French public, for some reason, seems more interested in "smears" than in things like pension reform. While he remains bunkered in the Elysée Palace, the biggest crisis of Sarkozy's presidency is growing like a lowering thunderhead.

Panicked cabinet members are circling the wagons, accusing the inquiring press of "an ignominious campaign" and "fascist methods." A prosecutor has opened an investigation into the allegations, which for obvious reasons are virtually impossible to prove. The French know they can't count on such investigations, under the thumb of Sarkozy's loyal justice minister, to come up with the unvarnished truth. Whatever the inquiry's result, it's unlikely to alter the poisonous prevailing climate, with two out of three voters considering French politicians "mostly corrupt."

Meanwhile Sarkozy, his poll numbers now at a record low 26 percent, is making gestures at reining in some of the more egregious spending. He canceled the traditional Bastille Day garden party at the Elysée Palace, along with the presidential hunts at Chambord chateau. Henceforth ministers will travel by train when possible, and their budgets will be trimmed by 10 percent. The number of official limousines will be reduced by 10,000, leaving a niggardly 60,000 cars in the fleet. State asceticism can only go so far, naturally. The new $221 million presidential airplane Sarkozy has ordered up, complete with office, meeting room, bed room with double bed, large bath, and medical center -- known by some as Sarko One -- will be delivered as scheduled.

The sacrosanct July-August vacation season has saved French governments in the past, notably during the riots of 1968. The Elysée is playing for time, with Sarkozy not expected to address the nation before July 13. "The situation is getting more difficult as days pass," says one political pollster. "These very public scandals are eroding Sarkozy's credibility. Maybe the summer recess will cool things down." Maybe, but right now we're having a heat wave.

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About the Author

Joseph A. Harriss is The American Spectator's Paris correspondent. His latest book, An American Spectator in Paris, was released this fall.