French ex-minister admits lying about bank account

[April 03, 2013]  PARIS (AP) -- French President Francois Hollande on Tuesday decried an "unforgiveable moral error" by his former budget minister, who has jolted France's body politic by admitting on his blog to having lied about a once-secret foreign bank account.

Authorities filed preliminary charges against Jerome Cahuzac, a former plastic surgeon-turned-politician, for alleged money laundering, a spokeswoman for Paris prosecutors said. If convicted, he faces up to five years in prison and a 375,000 euro ($481,500) fine.

After months of denials, Cahuzac wrote on his blog that he had told investigating judges he had a foreign bank account for 20 years. Calls by The Associated Press to his lawyer and to colleagues were not returned and he could not directly be reached for comment. Cahuzac, who had long criticized the use of overseas tax havens, quit the government last month as the scandal swelled.

On his blog, http://www.jerome-cahuzac.com, the former minister wrote that he had taken steps to repatriate 600,000 euros worth of holdings now in the account.

Cahuzac also made a thorough mea culpa, expressing regret to his colleagues, supporters and all French, and asking Hollande, the prime minister and former colleagues for "forgiveness for the damage I have caused them." Fellow Socialists expressed disappointment and betrayal, and rival conservatives pounced: At least two scolded the Socialists for having lectured the political right on morality issues in the past.

Top government officials swung into crisis-management mode. Hollande's office said in a statement that the president "noted the admission of Jerome Cahuzac with great severity," and regretted how he "committed an unforgiveable moral error" with his public denials -- including on the floor of parliament.

Prime Minister Jean-Marc Ayrault said he spoke to Cahuzac on Tuesday, and that the former budget minister admitted to him that he had been dishonest.

"With sadness and dismay, I learn the truth. This truth is cruel: Jerome Cahuzac lied," Ayrault said. "He acknowledged holding an undeclared bank account abroad. He has just made these facts public -- these facts are serious ... Now, Jerome Cahuzac is alone in the face of his responsibilities. He must now answer to the justice system."

When the scandal first broke, Cahuzac said solemnly in the National Assembly: "I never had a foreign account, not now, not before. I deny these accusations." But in the blog posting Tuesday, a far less combative Cahuzac wrote: "I was caught in a spiral of lie and I lost my way. I am devastated with remorse."

The scandal couldn't have come at a worse time for Hollande, whose poll numbers have sunk in recent months, largely over concerns about his handling of France's gloomy economic picture and double-digit jobless rate. He had surged to victory over conservative incumbent Nicolas Sarkozy in the presidential race in May, in part by pledging greater ethics in government: Sarkozy's own budget minister, Eric Woerth, had resigned in another scandal.

Cahuzac had garnered Hollande's trust as a point man to help boost tax revenues as France battles a lackluster economy and growing budget deficit.

Cahuzac, a sharp-speaking former hair-transplant specialist, had made his name as budget minister by singling out corporate multinational tax dodgers, citizens who live abroad to avoid taxes, and those within France who stash money in overseas accounts. The issue struck a chord among many French as the government looks for ways to trim a swollen budget deficit.

Paris prosecutors opened a judicial investigation last month into a case of alleged laundering of money gained through tax fraud centering on Cahuzac, though investigators had not yet turned up enough evidence to charge him by name. That prompted Cahuzac's resignation -- making him the first minister to leave the 10-month-old Socialist government.

The online journal Mediapart broke the story in December, alleging that Cahuzac had transferred money from a Swiss account into another in Singapore. It produced a recording that it said was of Cahuzac's voice talking about his secret account. Mediapart said the recording, dating back more than a decade, turned up -- apparently accidentally and unbeknownst to Cahuzac -- on the voice mail system of someone he knew.

Cahuzac, who garnered a hand-shake from Ayrault and a pat-on-the-back from a colleague after his fervent speech of self-defense in the National Assembly, repeated his denials on French TV and radio interviews. He also filed a defamation suit against Mediapart.

Ayrault, the prime minister, defended the role of a free press in French society and said he had previously had doubts -- but no proof -- about whether Cahuzac was telling the truth.

"I am deeply hurt for the French people," Ayrault told France-2 TV. "There are sometimes serious individual cases -- and this is one."

[Associated Press; By JAMEY KEATEN]

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