French probe allegations of secret Sarkozy funding

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PARIS (AP) — French prosecutors have opened a preliminary investigation into allegations that the country’s richest woman secretly funded President Nicolas Sarkozy’s election campaign, a judicial official said Wednesday.

The probe is a new blow to Sarkozy, who is rapidly losing support among French voters stung by the global economic crisis.

Sarkozy denies claims that his 2007 campaign received euro150,000 ($188,000) in secret cash from 87-year-old L’Oreal heiress Liliane Bettencourt and calls the allegations an effort to smear him.

But Sarkozy and his prime minister strained Wednesday to keep their government and conservative party from unraveling amid a mushrooming scandal surrounding Bettencourt’s fortune.

The scandal, including suggestions of large-scale tax evasion, first ensnared his labor minister and is now inching closer to the president himself.

On Wednesday, the prosecutor’s office in the Paris suburb of Nanterre opened a preliminary investigation into statements by a former accountant for Bettencourt, Claire Thibout, the judicial official said. The official was not authorized to be publicly named because the investigation is ongoing.

Thibout told investigators that Bettencourt’s chief financial adviser gave euro150,000 in cash to the treasurer of Sarkozy’s conservative party UMP, Eric Woerth, in March 2007, the official said. Sarkozy was elected two months later.

Woerth’s wife until recently worked as an investment adviser to the L’Oreal heiress, and Woerth himself is Sarkozy’s labor minister and in charge of an unpopular pension reform set to raise the retirement age from 60 to 62.

Opposition politicians are demanding that Woerth resign amid the Bettencourt scandal, but Sarkozy has vigorously defended him.

At a Cabinet meeting Wednesday, the president urged his ministers to show their “sang-froid” and concentrate on work, government spokesman Luc Chatel said afterward.

Prime Minister Francois Fillon tried to rally the troops of his UMP party Wednesday, calling for collective courage and saying they should not fall “hostage to rumors.”

Woerth, who has been treasurer for Sarkozy’s conservative party for eight years, said Tuesday he was “outraged” by the claim and said he has “never received the slightest euro that wasn’t legal.”

An intergovernmental financial inspection agency is also investigating Bettencourt’s tax file, and Budget Minister Francois Baroin said its report would be “on my desk Friday.”

Bettencourt is No. 17 on Forbes magazine’s list of the world’s richest people worldwide.

Campaign finance scandals dogged past French administrations. Former President Jacques Chirac must face trial over what investigators say was a fake jobs scheme while he was mayor of Paris meant to help finance his conservative party. Chirac has denied wrongdoing. Former Prime Minister Alain Juppe was convicted of party financing irregularities in 2004. Finance scandals plagued the Socialist Party under the second term of then-President Francois Mitterrand.


Associated Press write Sylvie Corbet in Paris contributed to this report.