L’Oreal, the French Minister and the ‘Envelopes of Cash’
BBC News | 7 July 2010
It started out as a dispute between the heiress to a cosmetics fortune and her family. But the row over Liliane Bettencourt’s finances has now reached out to touch the president of France himself. It has become a tangled saga of names, connections, claims and rebuttals. The BBC News website profiles key players in the political drama gripping the French public.
The story starts with Liliane Bettencourt, now 87, and the richest woman in France.
She is the heiress to the L’Oreal cosmetics fortune and holds a 27.5% stake in the company.
Her total wealth is put at about 17 billion euros ($20.78bn; £13.9bn).
Twenty years ago, she befriended the society photographer Francois-Marie Banier, 62. Over the years, she gave him gifts worth around 1bn euros. These included cash, life insurance policies and artworks by Picasso and Matisse.
Her daughter, Francoise Bettencourt-Meyers, took the matter to court. She said Mrs Bettencourt was mentally incompetent and had been exploited by Mr Banier. Mrs Bettencourt said she was a free woman, in full control of her faculties, and her daughter would just have to accept it.
But the dispute has now widened far beyond its origins.
Last month, prosecutors opened a separate investigation into Mrs Bettencourt’s tax affairs after secret recordings of conversations between the heiress and her wealth manager came to light. The recordings, made by Mrs Bettencourt’s butler, were passed to the police by her daughter. Transcripts published by the website Mediapart appear to refer to undeclared bank accounts in Switzerland and the Seychelles.
Mrs Bettencourt has admitted tax evasion and has promised to put her affairs in order.
Now Mrs Bettencourt’s political connections have come under the spotlight. Prosecutors have begun a separate inquiry into Mrs Bettencourt’s donations to French President Nicolas Sarkozy’s conservative party, the UMP.
The French labour minister has also been the treasurer for the UMP for eight years.
He ran the party’s finances at the time of the presidential election in 2007, when Mr Sarkozy was elected. Mrs Bettencourt’s former accountant has accused Mr Woerth of taking delivery of undeclared campaign donations from the L’Oreal heiress. Claire Thibout says Mr Woerth received 150,000 euros in cash for the UMP in March 2007.
French law says private donors can only give a maximum of 7,500 euros a year to a political party. Mr Woerth has vehemently denied the accusations, saying he never received a single illegal euro. He has said he is the victim of a witchhunt by the left because of his responsibility for pension reform and his plan to raise the retirement age from 60 to 62.
In his previous role as budget minister, Mr Woerth had responsibility for pursuing tax dodgers. Questions have now been raised about whether he turned a blind eye to Mrs Bettencourt’s tax evasion. A prosecutor says he informed the budget ministry of his suspicions about Mrs Bettencourt’s tax affairs in January 2009. Mr Woerth denies having blocked an investigation.
Florence Woerth has resigned as an investment adviser to Mrs BettencourtTo complicate matters still further, Mr Woerth’s wife used to work for Mrs Bettencourt as an investment adviser. She was employed by Patrice De Maistre, Mrs Bettencourt’s wealth manager, but resigned last month after she and her husband were accused of a conflict of interest.
In the secret tapes, Mr De Maistre says clearly that he gave the job to Mrs Woerth after being asked by her husband to employ her.
Patrice de Maistre
Patrice de Maistre is Mrs Bettencourt’s wealth manager. His company, Clymene, has as its sole function the investment of the estimated 278 million euros that Mrs Bettencourt draws annually from her stake in L’Oreal. He has been questioned by police and denies accusations by Mrs Bettencourt’s accountant, Claire Thibout. Ms Thibout’s lawyer said Mr de Maistre asked her for 150,000 euros, which he promised to give “discreetly” to Eric Woerth at a dinner.
In the tapes recorded by Mrs Bettencourt’s butler, he is heard to describe Eric Woerth as “very nice, and also he’s the man who is in charge of your taxes…He’s a friend.”
Ms Thibout was formerly Mrs Bettencourt’s accountant. She told prosecutors that in March 2007, she had been involved in withdrawing 150,000 euros in cash from Mrs Bettencourt’s accounts.
She said she herself took out 50,000 euros – the maximum she was authorised to withdraw – and handed the money to Patrice De Maistre.
Police have checked bank records and have confirmed the withdrawal.
The money was to be given to Mr Woerth in plain envelopes as a donation for the UMP, she said.
Ms Thibout admitted she herself had not witnessed the handover.
She is quoted by the news website Mediapart as saying that President Sarkozy also received envelopes of cash from the Bettencourt family.
This is the first time Mr Sarkozy himself has been linked to the widening scandal.
The French president has denied receiving illegal funding from Mrs Bettencourt.
He has defended his labour minister, saying Eric Woerth was a victim of defamation without the slightest basis in reality.Claire Thibout said Mr Sarkozy regularly received envelopes of cash from the Bettencourts when he was the mayor of the affluent Parisian suburb of Neuilly-sur-Seine, from 1983 to 2002. Mr Sarkozy has consistently rejected all accusations of impropriety, but some observers say the case is now damaging him politically at a time when his approval ratings have already been falling.
Described as an aesthete, Francois-Marie Banier made his name as a photographer. His work has been published in Le Figaro and the New Yorker. In his youth, Francois-Marie Banier was the friend of 1960s cultural icons like Salvador Dali and Samuel Beckett.
But his friendship with Mrs Bettencourt angered her family. Mrs Bettencourt’s daughter, Francoise Bettencourt-Meyers, called him the “predator”.
In December, a court ruled that Mr Banier did have a criminal case to answer for “abuse of mental fragility”. Mr Banier went on trial on 1 July, but the case was quickly adjourned. If convicted, he could be fined, imprisoned for up to three years, and forced to return the gifts. He denies all the charges, saying he did not take advantage of Mrs Bettencourt.