Latest update: 02/07/2010
- France - Nicolas Sarkozy - tax evasion
L’Oreal tax scandal intensifies for French minister Woerth
For the French press and opposition, French Labour Minister Eric Woerth and his wife got too close to the super-rich L’Oreal heiress, accused of plotting to evade taxes. Bad timing when Woerth is trying to institute unpopular pensions reforms.
It is a scandal that has all the ingredients of a blockbuster novel: stolen gold bullion, an eavesdropping butler, a mega-wealthy cosmetics heiress, a government minister and accusations of tax evasion.
At the centre of this growing political scandal is France’s Labour Minister Eric Woerth.
Woerth had been making his own headlines as the man overseeing deeply unpopular pensions reform that has seen thousands of public sector workers go on strike and take to the streets in protest.
Then on June 16 a website published transcripts of tapes recorded secretly by the butler of France's richest woman, Liliane Bettencourt, the L'Oreal cosmetics heiress with a fortune estimated at 16 billion euros.
The taped conversations between Bettencourt and her financial advisor reveal that the 87-year-old allegedly hid 80 million euros in Swiss bank accounts while making big donations to friends in Sarkozy's UMP political party.
The butler's tapes are the latest twist in a long-running family feud between the billionaire and her daughter, who claims Bettencourt is mentally unfit after she gave more than a billion euros in cash and art works to a society photographer friend.
But the scandal exploded when it emerged from the tapes that Woerth's wife Florence worked for a company that managed part of Bettencourt's fortune.
French newspapers and opposition politicians were quick to ask if the Woerths knew of the alleged tax fraud and to note that Woerth last year presented Bettencourt's financial advisor with France’s top civic award, the Legion d'Honneur.
Both Woerth, who in a previous post led a major crackdown on tax evasion, and his wife vehemently deny any wrongdoing.
The confidence of the president
Speaking to French media on Sunday, Woerth said there was "no conflict of interest" between the roles of UMP party treasurer and minister.
"What is very unpleasant," Woerth said, "is being considered a suspect when I have not done anything. I am being targeted in this affair because people want to disrupt the speed and success of pensions reform.”
The day before, Sarkozy had added his voice to government support for the minister, saying Woerth had his "total" confidence.
But the calls are growing for Woerth to put an end to an apparent major conflict of interest, even if few politicians have so far openly called for his resignation.
First L’Oreal, now Peugeot dynasty in spotlight
Woerth came under fresh scrutiny on Sunday when the Journal du Dimanche newspaper alleged that another super-rich heir to a world-class French company had sought Woerth out when he had tax problems.
The paper said Robert Peugeot, of the car manufacturer of the same name, dined with Woerth just days after gold ingots - worth an estimated 150,000 euros - were stolen late last year by burglars who broke into his Paris home.
Peugeot contacted Woerth because, according to sources the paper did not identify, "he was afraid of an inquiry into the origin of his gold."
The Journal de Dimanche noted that Woerth earlier this month awarded a Legion d'Honneur to Peugeot.
The Woerth affair comes on the heels of incendiary reports suggesting that several government ministers are living the high life at the taxpayer's expense, while ordinary people are being told to tighten their belts.
Woerth continues to deny any wrongdoing and has refused opposition calls to resign.