France

Woerth tax scandal intensifies with calls for an inquiry

(Photo: Reuters)

French Labour Minister Eric Woerth has come under attack for a tax scandal involving the heiress to the L’Oreal cosmetics empire. It prompted allegations of government corruption following the earlier release of taped conversations by the heiress' butler. France’s National Assembly has been asked to form an inquiry commission.

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Woerth’s dual role as treasurer of the Union for a Popular Movement (UMP) party and Labour Minister was being called into question on Wednesday, as left-wing newspaper Liberation questioned whether his responsibilities, one partisan, the other governmental, could continue to coexist.

French President Nicolas Sarkozy’s government counter-attacked, saying that Woerth’s critics were trying to undermine his pension reforms. Immigration Minister Eric Besson called it a "shameful witch-hunt."

Jean-Marc Ayrault, the president of the Socialist Party in the French National Assembly, presented a possible solution today – the creation of an inquiry commission.

He said it would act to “throw light on the management of the Bettencourt affair by the Budget Ministry, under the authority of Mr Woerth, Mr Baroin [Minister of Budget, Public Accounts and State Reform] and Mrs Alloit-Marie [Minister of Justice].” Though he refused to remark on any of the accusations or comments made about the scandal.

Liliane Bettencourt is France’s richest women. On 16 June a website published transcripts of secret tapes made by her butler. The conversations concerned alleged tax evasion in Swiss bank accounts to the tune of 80 million euros. Plus large donations to associates in Sarkozy's ruling UMP party.

It then emerged from the recorded conversations that Woerth’s wife Florence also worked for a company that managed part of Bettencourt’s fortune while he was budget minister.

The possible conflict of interest was clear for the French press: “The poison of the Woerth affair” said Le Parisien, “Can he hang on?” questioned left-wing Liberation.

Opposition politicians were quick to hit-out. “The Sarkozy system is today corrupt,” Socialist Segolene Royal, who was Sarkozy’s main rival in the 2007 presidential election, told TF1 television on Tuesday.

“This is a power that blends private property and public property”; “it is a power which has lost its sense of the common good”; “a power which benefits with complete impunity” Royal added, calling for an impartial inquiry.

However Christian Estrosi, Ministry of Industry, was quick to react to Royal’s comments. He called her a “liar”, “cheater” and “indignant”, referring to her involvement in previous alleged cases of corruption.

The scandal also comes just a day after Sarkozy announced 150 measures which would reduce the size of the state - in particular perks for officials, such as government vehicles, housing and use of jets.

Confronted by the scandal Sarkozy is set to reorganise his government in October, according to Yannick Favennec, a UMP party member, who said via his Twitter feed that the president would consider the conduct of his ministers.

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