French President Nicolas Sarkozy will appear on national TV Monday for a live interview to address the burgeoning political scandal over allegations L'Oreal heiress Liliane Bettencourt made illegal donations to his party.
REUTERS - French President Nicolas Sarkozy will try to quell a political donations scandal on Monday after losing a safe parliamentary seat in a sign of public anger over allegations of cash handouts to conservative politicians.
An official investigation cleared a key minister on Sunday of abusing his position to shield France's richest woman from a tax audit, but critics said the report did not erase suspicions of a conflict of interest.
Sarkozy will give a rare summer television interview a day before embattled Labour Minister Eric Woerth presents to the cabinet a pension reform, which is unpopular with voters and unions.
The furore over alleged cash handouts by France's richest woman, L'Oreal heiress Liliane Bettencourt, and her late husband, to conservative politicians has shaken the president and helped drive his approval rating to a record low.
The ruling UMP party lost a by-election on Sunday in what opposition Socialist leader Martine Aubry called "a very clear snub to the president and the government, and a strong rejection of the climate created by these revelations and scandals".
Green candidate Anny Poursinoff, backed by the Socialists, beat the UMP incumbent in the Rambouillet constituency southwest of Paris by 51.7 percent to 48.3 percent on a low 26.8 percent turnout. The conservatives retain a comfortable majority in the lower house of parliament.
Woerth is a central figure in the case. He was treasurer of Sarkozy's 2007 presidential campaign, remains treasurer of the UMP and served as budget minister, in charge of tax affairs, prompting accusations of a conflict of interest, especially as his wife worked for Bettencourt's wealth manager.
Seeking to silence such criticism, the government rushed out a report from the Finance Ministry's tax inspectorate on Sunday, concluding that Woerth played no role in the tax affairs of the Bettencourts, their wealth manager or family friends.
The budget ministry said inspectors had found that Woerth neither interfered with the handling of Bettencourt's tax file nor neglected to follow up evidence of possible tax evasion.
However, the report did not cover allegations by a former bookkeeper for Bettencourt that Woerth was given an illegal donation for Sarkozy's campaign. Police are investigating her statements, which wealth manager Patrice de Maistre has denied.
The lawyer for Claire Thibout, Bettencourt's former bookkeeper, has said his client alleged that Woerth received 150,000 euros in cash. France limits personal donations to 7,500 euros per year, of which only 150 euros in cash.
Despite isolated calls for Woerth to resign, or for Sarkozy to bring forward a cabinet reshuffle planned for October, the president seems determined to tough it out in the hope that the story will die away during the summer holidays.
Reacting to the by-election loss, Higher Education Minister Valerie Pecresse accused the left of "a shocking exploitation of lies, rumours and insinuations while the government is working on the essential issue of saving our retirement system".
Critics say the government is in crisis.
"There's nothing more (Sarkozy) can do by talking, the French are waiting for action," Jerome Cahuzac, Socialist president of the finance commission, told newspaper Le Journal du Dimanche.
"The events are all as sordid as each other. The French can no longer accept this decay," centrist leader Francois Bayrou told Europe 1 radio on Sunday.
A source at the presidential palace has said Sarkozy's appearance was not related to the political crisis.
The government has said Woerth has not been weakened by the affair and that he has Sarkozy's full support.
Woerth told Le Journal du Dimanche he wanted to be given a hearing as quickly as possible in order to prove his innocence.
In an emotional prime-time television interview on Tuesday, he denounced what he called an "outpouring of hatred" against himself and said he was the victim of "a political cabal orchestrated by the Socialist party".
Bettencourt's lawyer has not commented on the allegations.
Sarkozy's approval ratings have dropped to an all-time low, and a survey released on Friday showed he would lose the second round of the next general election, due in 2012, to Socialist Party leader Martine Aubry.
Date created : 2010-07-12