French probe allegations of secret Sarkozy funding

[July 07, 2010]  PARIS (AP) -- French prosecutors have opened a preliminary investigation into allegations that the country's richest woman secretly funded President Nicolas Sarkozy's election campaign, a judicial official said Wednesday.

Sarkozy has denied claims that his 2007 campaign received euro150,000 ($188,000) in secret cash from 87-year-old L'Oreal heiress Liliane Bettencourt, and called the reports an effort to smear him.

A mushrooming scandal surrounding Bettencourt's fortune, including suggestions of large-scale tax evasion, has destabilized Sarkozy's conservative government and inched closer in recent days to the president himself.

On Wednesday, the prosecutor's office in the Paris suburb of Nanterre opened a new preliminary investigation into statements by a former accountant for Bettencourt, Claire Thibout, the judicial official said. The official was not authorized to be publicly named because the investigation is ongoing.

Thibout told investigators that Bettencourt's chief financial adviser gave euro150,000 in cash to the treasurer of Sarkozy's conservative party UMP, Eric Woerth, in March 2007, the official said. Sarkozy was elected two months later.

Woerth's wife until recently worked as an investment adviser to the L'Oreal heiress. Woerth is now Sarkozy's labor minister and in charge of an unpopular pension reform set to raise the retirement age from 60 to 62. Opposition politicians are demanding that Woerth resign amid the Bettencourt scandal.

Sarkozy has vigorously defended Woerth. On Tuesday, Sarkozy denounced the allegations as "libel that aims only to smear, without the slightest basis in reality."

Woerth, who has been treasurer for Sarkozy's conservative party for eight years, said Tuesday he was "outraged" by the claim and said he has "never received the slightest euro that wasn't legal."

Bettencourt is No. 17 on Forbes magazine's list of the world's richest people worldwide.

[Associated Press; By PIERRE-ANTOINE SOUCHARD]

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