From SwissInfo

Switzerland in eye of Bettencourt-Woerth storm

Simon Bradley
swissinfo.ch
Jul 5, 2010 - 21:30


Secret Swiss bank accounts have been at the centre of a high-society political drama that has gripped France over the past few weeks.

French Labour Minister Eric Woerth, who has led a high-profile clampdown on tax evasion against Switzerland, has been linked to the bitter inheritance suit involving L’Oreal heiress Liliane Bettencourt, who is suspected of tax dodging.

The affair began when Françoise Bettencourt-Meyer, the estranged only daughter of 87-year-old Liliane, filed a complaint against celebrity photographer Francois-Marie Banier for “abuse of frailty” of her mother.

Banier is accused of tricking elderly Bettencourt, France’s richest woman, into handing over €1 billion (SFr1.3 billion) of assets, including works of art and an island in the Seychelles. Her net fortune is estimated at €17 billion.

Both he and Liliane Bettencourt reject the charges, insisting the gifts were made in good faith.

Judges last Thursday postponed the trial after secret recordings made by her butler emerged; the leaked recordings suggest the heiress was evading taxes by failing to declare assets to the French tax authorities.

Bettencourt and her financial advisor, Patrice de Maistre, are heard discussing undeclared Swiss bank accounts. These include one in Vevey worth €65 million and another in Geneva worth €16 million.

Last week Bettencourt quickly issued a statement indicating she would “regularise” her assets abroad.

According to last Friday’s Tribune de Genève newspaper, these accounts were allegedly moved last April for life insurance in France for Liliane’s grandson.


Wider fallout?

The trial judges have decided they need more time to study the recordings, but the tapes appear to have much wider implications.

On several occasions, conversations between Liliane Bettencourt and De Maistre referred to Eric Woerth and his wife Florence.

Florence Woerth worked for De Maistre’s company Clymene, whose function is to invest the estimated €278 million in dividends that Liliane Bettencourt earns from her stake in L’Oreal, the world’s biggest cosmetic firm.

In the tapes De Maistre clearly says he gave the job to Florence Woerth after being asked to do so by Eric Woerth. Florence Woerth resigned from Clymene two weeks ago.

The tapes also show that Liliane Bettencourt made cash gifts to support political campaigns by members of the French UMP ruling party, including Mr Woerth.

Woerth has been accused of conflict of interests as he is both labour minister as well as the UMP treasurer and chief fundraiser.

The leftist opposition and unions have delighted in the affair, calling for the resignation of the minister, who is trying to push through sensitive pension reforms.

The minister, meanwhile, angrily denies allegations of any wrong-doing, saying he knew nothing about his wife’s activities and she knew nothing about the tax evasion, and he has the public backing of President Nicolas Sarkozy.


Tax evasion crackdown

A Geneva financial specialist criticised the minister in Friday’s edition of the Tribune de Genève: “Eric Woerth, who made tax evasion his priority, has attacked us for some time for being public enemy number one. He’s the one who got us on the OECD grey list of non-cooperative tax havens.

“But do you know, at the same time his wife, Florence, one of Liliane Bettencourt’s wealth managers, was often in the ‘family office’ of the French billionaire, two doors from the Hotel Angleterre?”

“Over the past two years Eric Woerth couldn’t ignore the fact that his wife was often in Geneva, and definitely not there to see the Geneva fountain.”

Until recently, Woerth was budget minister, with a mission of cracking down on tax evasion.

In August 2009 Woerth said his offices had the names of about 3,000 French citizens who held secret numbered accounts in Switzerland worth €3 billion. He said a portion of those names had come from an informant from the Geneva branch of British bank HSBC.

Both countries eventually settled the escalating row in January 2010 after France agreed not to use stolen data when requesting tax information.


Excessive behaviour

Whatever happens next, even if Bettencourt is found guilty of tax evasion, the Swiss bankers and institutions allegedly involved “have nothing to worry about”, said Geneva lawyer Dominique Warluzel.

Unlike American law, financiers are not liable for tax evasion under French law or the new double-taxation treaty between France and Switzerland, he told Swiss national radio.

Meanwhile, the Bettencourt-Woerth affair comes as other scandals embarrass the Sarkozy government.

Two French junior ministers, Alain Joyandet, secretary of state for cooperation, and Christian Blanc, in charge of a new transport plan for Paris, resigned on Sunday after scandals involving spending state money on a private jet and thousands of euros worth of cigars.

These revelations come at a time when the French government is looking to reign in “unjustified or excessive expenses” as the country struggles to bring down its deficit.

Schadenfreude is the purest joy ...

From the National Post

Sarkozy accused of taking envelopes stuffed with cash from heiress

Thibauld Malterre
Agence France-Presse

Tuesday, Jul. 6, 2010

Originally Posted by Francois Cellier

The payoffs were usually in amounts of €50,000-€100,000 ($66,000-$133,000), though Claire T. recalled an incident when Mr. Woerth asked for — and got — ¤150,000 ($200,000), which was above her withdrawal limit at the bank. She explained she was worried about drawing out such a large amount in cash because it might attract the attention of the tax authorities.

Swiss TV went one step further and explained that $50,000 out of the $200,000 were handed over in cash, whereas the remaining $150,000 were transferred over from a secret Swiss bank account.

From the Independent

New claim links Sarkozy directly to scandal over l'Oréal money

President demands end to 'smears' after accountant alleges he accepted envelopes

By John Lichfield in Paris
Wednesday, 7 July 2010


Liliane Bettencourt, 87, France's richest woman, left, is accused of illegally funding politicians including the President, Nicolas Sarkozy


The seemingly unstoppable wildfire of the L'Oréal family feud and political funding scandal threatened yesterday to engulf President Nicolas Sarkozy.

A former accountant for France's wealthiest woman, Liliane Bettencourt, told investigators that she had made an illegal €150,000 (£125,000) cash donation to the Sarkozy presidential campaign in 2007.

She also said that Ms Bettencourt, 87, chief shareholder in L'Oréal, had illicitly funded many centre-right politicians, including Mr Sarkozy in the years before he became president.

The Elysée Palace angrily denied the claims. President Sarkozy – without referring to the allegations directly – made a public appeal for an "end to calumnies, whose only aim is to smear, without any kind of basis in reality".

The accusation was made to police – and repeated in an interview with an investigative website – by Claire T, an accountant who had helped to handle Ms Bettencourt's €17bn fortune for two decades until 2008. She said that the elderly billionairess's family fund manager, Patrice de Maistre, had handed over €150,000 in cash to the Sarkozy campaign in 2007 – 20 times the legal limit on personal contributions.

The latest allegations, although denied by all those involved, threaten to turn the saga into a full-blown affaire d'état or state scandal. At a time when ordinary French people face tax rises and spending cuts, opposition politicians on the left and far right are making hay of the suggestion that Ms Bettencourt's irregular tax affairs were protected by "hired" political friends.

Unlike almost all other politicians on the centre-right, President Sarkozy has been virtually immune, until now, to allegations that he funded his political career illegally.

The L'Oréal family feud already menaces the career of Mr Sarkozy's employment minister and former budget minister Eric Woerth. He is accused of turning a blind eye to systematic tax evasion by Ms Bettencourt in return for campaign funds that he received as Mr Sarkozy's party treasurer. Mr Woerth again rejected these claims yesterday as "utterly baseless".

His denials have been undermined, however, by the revelation last month that he solicited a job for his accountant wife, Florence, with the company that manages Ms Bettencourt's personal fortune.

It has already been revealed that President Sarkozy tried to intervene – on the side of Ms Bettencourt – in a two-years-old legal action between the L'Oréal heiress and her estranged only child, Françoise.

All these revelations come from secret tapes of the billionairess's conversations with advisers and courtiers recorded over 12 months by Ms Bettencourt's former butler. The tapes, handed to police last month, have become Exhibit Number One in the legal action brought by Françoise Bettencourt-Meyers. She accuses her mother's friend, a society photographer, Francois-Marie Banier, 63, of abusing her mother's "weakness of mind" to persuade her to hand over €1bn in cash, art works and life insurance policies.

Like the butler who made the secret tapes, the accountant, Claire T, left Ms Bettencourt's employment – in somewhat disputed circumstances – as part of this family row. She is, therefore, accused by Ms Bettencourt's advisers and lawyers of being an unreliable witness. In her statement to the website Mediapart yesterday Claire T (whose full name has not been released) said that Ms Bettencourt, and her late husband, André, had illicitly funded Mr Sarkozy and other centre-right politicians for years. "Politicians were constantly marching through the house, especially at election time," she said. "They all came to pick up their envelopes, sometimes as much as €100,000, or even €200,000."

The Bettencourt mansion is in Neuilly-sur-Seine, the wealthiest town in Paris, on the western boundary of the city of Paris. The town's former mayor is Nicolas Sarkozy. Claire T said that the future president was a frequent dinner guest before he became President. "Nicolas Sarkozy used to get his envelope too. It happened in one of the little ground-floor salons next to the dining-room. It usually happened after the meal," she told Mediapart, a website set up by former employees of the newspaper Le Monde. "Everyone in the house knew that Sarkozy too went to see the Bettencourts to pick up money."

Claire T also said that she had personally withdrawn €50,000 in cash as part of a €150,000 donation to be given to Mr Woerth in unmarked envelopes before Mr Sarkozy's successful 2007 election campaign.

Mr Woerth, treasurer of the ruling centre-right Union pour un Mouvement Populaire (UMP), and treasurer of Mr Sarkozy's 2007 campaign, told French television yesterday: "I've been treasurer of my party for eight years and I think no one can accuse me of anything. Everything is clear, everything is clean."

Under French law, individuals can only donate €7,500 a year to campaign funds. Only €150 can be given in cash.


Timeline of a scandal

December 2009 Liliane Bettencourt's daughter begins a civil case to try to have Ms Bettencourt declared legally irresponsible.

16 June 2010 Secret recordings of conversations between Ms Bettencourt and her wealth manager are passed to police. Reports say they include details of donations made to members of the ruling centre-right UMP party, including the minister Eric Woerth.

17 June Mr Woerth says he did not procure a job for his wife, Florence, at the firm that manages the heiress's fortune.

21 June Mr Woerth announces that his wife will step down from her role at the wealth management company.

25 June Mr Woerth denies having blocked a tax investigation into possible fraud by Ms Bettencourt.

27 June Mr Woerth's successor as budget minister says the authorities will review of Ms Bettencourt's tax returns.

6 July A former bookkeeper for Ms Bettencourt alleges that Nicolas Sarkozy's party received illegal donations. The President's office denies the claims.

Originally Posted by Francois Cellier

Holy mother Mary, please, save me from those pesky reporters!

I am truly enjoying that thread.

See what I am saying? Confiscating EUR16.75 billions out of Mme Bettancourt's fortune would actually be doing her a favour. And I doubt she would really lack lackeys and hangers-on even if she had 'only' EUR250 millions to tease people with...

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Quote:

By the time most of you read this on Saturday, François-Marie Banier, the society photographer and novelist, will have been grilled for 48 hours solid by the French police, without the benefit of a lawyer. They want to know, among other things, whether he evaded tax by hiding, through a Liechtenstein trust, the gift of a Seychelles island (estimated at 500 million euros) from the L'Oréal heiress, Liliane Bettencourt. The procedure is known as garde à vue, and it's as unpleasant as it sounds (France is regularly taken to task about it by the European Court of Human Rights, and regularly blows, in answer, an elegantly argued raspberry in Strasbourg's general direction). Banier's Left Bank townhouse has also been raided by magistrates, in search of proof of tax evasion, money laundering, and possibly conspiracy to defraud a person "in situation of weakness". He has denied it, of course. But a number of people must be watching the proceedings with unmitigated glee. There's Françoise Meyers-Bettencourt, the heiress's only daughter, who started the whole thing three years ago when she felt her mother was being estranged from her by the entourage. Many members of Liliane Bettencourt's staff actively loathed Banier, not least because he was extremely rude to them. He would call before taking Liliane out, one of them told the police, reminding them "to make sure she had her chequebook with her". Frédéric, the grandson of interior designer Madeleine Castaing, a kind of French Elsie de Wolfe, recalls how Banier could become rough when refused a prized possession. He told the police that Banier "shouted at her and once urinated in her teacups, in front of her staff ". Banier, it is said, learned his shocking rudeness from Salvador Dali. The great Surrealist painter would receive him, still in his teens, in his suite at the Meurice hotel, and graphically comment on the supposed physical attributes of the waiters serving them tea. "Banier wants to shock, he only manages to be embarrassing," wrote Pierre Bergé, Yves Saint Laurent's longtime partner, after a 10-day holiday in Toulon. Still, Banier managed to get Princess Caroline of Monaco to pose for him with her head shaved, and the notoriously skittish Isabelle Adjani to make monkey faces to his camera. The man has charm, and chutzpah. Visiting a gallery with Liliane Bettencourt, he freezes in front of a picture. "The colour of our friendship is the precise blue of this Matisse," he exclaims. As if on cue, the billionaire heiress stops too and replies, "François-Marie, this picture is yours." This week, just before he was taken for questioning, Banier gave a long interview to L'Express, shooting salvoes at his detractors. "Of course I can't influence Liliane Bettencourt," he protested. "I advised her to buy Cheval Blanc, the Premier Cru vineyard; Ilford, the British photographic company; [the ailing daily] Libération; a museum; a skyscraper for L'Oréal's new headquarters. She did none of it. How can anyone possibly think I manipulate her?"

The L'Oreal heiress and a picture of rudeness - Telegraph

It's been agony trying to follow this from abroad. I'm enjoying it even more than the emplois fictifs affair.

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Quote:

Investigators went to Eric Woerth's offices in the labour ministry to conduct the interview, police officials said, speaking on condition of anonymity. Five separate judicial investigations are underway regarding the fortune of the richest woman in France, including into allegations of tax evasion and illegal campaign funding involving Mr Woerth. Investigations centre on whether Mr Woerth received cash donations from Mrs Bettencourt via her adviser, Patrick de Maistre, far above the legal limit of €7,500 per year. Mrs Bettencourt's former bookkeeper claims Mr de Maistre handed the labour minister €150,000 in 2007, shortly before the presidential elections, when Mr Woerth was budget minister and chief fundraiser for Mr Sarkozy's UMP party. Both Mr Woerth and the financial advisor have denied the claims. Françoise Bettencourt-Meyers, the estranged daughter of the 87-year-old billionaire, has accused her mother's entourage, in particular the society photographer François-Marie Banier, of taking advantage of the heiress, whom she claims is no longer in a fit mental state to manage her €15.6 billion (£13 billion) fortune. Mr Banier denies the allegation. Detectives are conducting an inquiry launched after secretly recorded tapes appeared to reveal a conversation between Mrs Bettencourt and her business adviser, in which they allegedly discussed means of avoiding French tax. Mr Woerth's name also came up in the recording, during which the billionaire allegedly signs a cheque for his political campaign. Questioned earlier this week as a witness, Mrs Bettencourt told investigators that said she had no memory of handing over cash to her adviser for Mr Woerth in 2007, and that her now deceased husband handled party funding matters. She said she had rarely met Mr Woerth, and did not recall his wife, who last month resigned from her job in a company running Mrs Bettencourt's fortune – which led to claims of a conflict of interest with her husband. The minister has firmly denied any conflict of interest.

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L'Oreal probe: French labour minister Eric Woerth questioned - Telegraph

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