French relish cycle of scandals as Sarkozy-era scores are settled

Nearly every week sees a new revelation about Sarkozy-era figures, such as Bernard Tapie and IMF chief Christine Lagarde, as scores settled

PUBLISHED : Monday, 24 June, 2013, 12:00am
UPDATED : Monday, 24 June, 2013, 6:13am


The French love their political scandals, especially when there is a change of power at the Elysee Palace, the presidential seat. Knives come out, grudges get pursued and those whose power was so intimidating a few short months ago face investigations.

Those inquiries, which prompt sometimes delicious and humiliating leaks, very often go nowhere, lost in a thicket of appeals and denials, with not quite enough evidence to indict the key figures involved.

France is in the midst of another cycle of scandals, most of them concerning central figures in the presidency of Nicolas Sarkozy, who lost his bid for re-election a year ago to the Socialist candidate, Francois Hollande. Nearly every week there are new revelations about Sarkozy or his former top lieutenants, including his good friend, consigliere, former chief of staff and former interior minister, Claude Guiant, and now even Christine Lagarde, the former finance minister.

The Lagarde case, which involves a dispute over the sale of a company, is particularly interesting for the rest of the world, since she is the well-liked managing director of the International Monetary Fund. She was chosen two years ago to replace the scandal-prone Dominique Strauss-Kahn, another former French finance minister. The case is particularly interesting for the French, too. Although Lagarde served Sarkozy, both her top aide then, Stephane Richard, who is now head of France Telecom (soon to be renamed Orange), and the larger-than-life character at the centre of the case, Bernard Tapie, were Socialists.

While a clear indication of the intimacy among France's elite, no matter their political allegiance, the Lagarde case has put the Hollande government in a quandary. While Tapie's critics dismiss him as an avaricious renegade, Lagarde has kept a vital international job in French hands and Richard is supported by both his board and by the government, which owns a significant stake in the company.

Tapie came from a modest background to become an actor, television star, race car driver, politician, government minister, businessman and owner of one of France's great soccer teams, Olympique de Marseille, which got him a jail term when he was found guilty of bribing opposing players. He also owned Adidas.

But in 1992, while in government, he asked the bank Credit Lyonnais to sell Adidas, which it did for his minimum price, while concealing that it had sold the company to itself. It then resold Adidas, making a profit of more than US$500 million. Tapie later sued the bank, and when Sarkozy became president, Lagarde agreed to a three-judge arbitration panel to settle the long case. In July 2008 the panel awarded Tapie US$528 million.

The accusation is that Sarkozy and his aides arranged the outcome, in part through the chairman of the panel, Pierre Estoup, now 86, as part of a deal with Tapie. What Tapie provided to Sarkozy in this version is not clear, but Lagarde and Richard have been interrogated in the case, and there are suggestions that Guiant was involved; he is expected to be questioned soon.

Lagarde has said she did nothing wrong, and in testimony leaked to Le Monde suggested Richard had handled the matter and kept information from her. She is seen so far to be a witness, not a suspect, unlike Richard, who also denies wrongdoing.

But Le Monde recently published a handwritten letter from Lagarde to Sarkozy, undated and possibly unsent, seized by the police when they raided her home in March. The letter, leaked to embarrass Lagarde, promises loyalty to Sarkozy, vows that she will do whatever he thinks needs to be done for as long as he wants to employ her, and asks for his advice, support and counsel. Written in the familiar "tu" form, it is signed "with my immense admiration, Christine L".

If nothing else, the letter is an indication of the sycophancy surrounding the republican imperium of the French presidency, especially under Sarkozy.

Guiant, who was feared as Sarkozy's enforcer, is being investigated over US$650,000 he received from a foreign bank. He says it was for the sale of two paintings that experts say would not be worth nearly that much, and which he did not register.

Other scandals around Sarkozy, who has immunity for official acts while president, remain significant, especially what has been called the Bettencourt affair. This concerns whether Sarkozy and his aides received illegal campaign financing by taking advantage of Liliane Bettencourt, the richest woman in France.



French President Francois Hollande's popularity was back to record lows in June after inching up in May, according to an Ifop poll carried out for French newspaper Journal du Dimanche. The survey showed 26 per cent of those interviewed were satisfied with Hollande's performance, down three percentage points, while 73 per cent were dissatisfied, up two points. The proportion of people satisfied with Prime Minister Jean-Marc Ayrault also declined two points to 31 per cent. The Socialist government has been struggling with rising unemployment, stalled economic growth and a large public deficit, while Hollande's same-sex marriage law prompted huge protests.

Elected in May 2012, Hollande's low popularity is lower than almost all previous presidents at the same point in their terms.

The study was based on the views of 1,865 people aged 18 or over contacted by telephone between June 14 and June 22.