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French government reeling from ex-minister tax scandal

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(Globalpost/GlobalPost)

France's Socialist government was reeling from an explosive tax fraud scandal Wednesday as critics questioned how much President Francois Hollande knew about a former budget minister's secret foreign bank account.

Jerome Cahuzac -- the minister responsible for cracking down on tax evasion until he resigned two weeks ago -- was charged Tuesday with "laundering the proceeds of tax fraud" after he admitted to having a foreign bank account containing some 600,000 euros ($770,000), following weeks of denials.

Hollande appeared on national television Wednesday to address the scandal, vowing a new law within weeks on the "publication and control" of the wealth of ministers and parliamentarians.

Hollande said he knew nothing of the foreign account and that Cahuzac "did not benefit from any protection" from the government.

"He deceived the highest authorities in the country: the head of state, the head of the government, parliament, and through them all the French people," Hollande said.

The president had been quick to condemn Cahuzac's actions, but critics have pounced on the scandal, saying top officials must have been either lying to protect the ex-minister or naive enough to believe him.

The head of the main opposition right-wing UMP party, Jean-Francois Cope, has demanded Hollande explain the scandal to the French public.

Cope said the president either "knew nothing, and that's extremely serious because it means he showed a certain amount of naivete" or "he knew and that means he lied to the French people".

"Who can believe that Francois Hollande and (Prime Minister) Jean-Marc Ayrault were aware of nothing?" Cope asked on Europe 1 radio. "They must explain themselves more deeply before the French people."

Opposition lawmakers have called for a parliamentary probe into the scandal and for the resignation of Cahuzac's former boss, Finance Minister Pierre Moscovici.

Marine Le Pen, the leader of the far-right National Front, said the entire government should resign and new parliamentary elections held.

"I see no other solution," she said. "When we have this kind of situation of rupture, the people must be able to express themselves," she said. "This abscess must be drained by new elections."

Hollande had promised a government of unimpeachable morals, and the scandal is likely to further damage the standing of the president, who is languishing in opinion polls less than a year into his five-year term.

Cahuzac announced his resignation on March 19 after prosecutors opened a probe into the account, first revealed by the investigative Mediapart news website in December. He met with investigators on Tuesday and admitted to having had the foreign account for around 20 years.

His lawyer said the account, originally opened in Switzerland, had been transferred to Singapore and that the amount laundered was equivalent to about 30,000 euros.

Swiss prosecutors said Wednesday that Cahuzac had agreed to allow details of the Swiss account to be transferred to French investigators.

In a contrite statement on his website, Cahuzac said: "I was caught in a spiral of lies and lost my way. I am devastated by guilt."

Little-known before being named a minister, Cahuzac, 60, began his career as a cardiologist before switching to the more lucrative world of plastic surgery, in particular hair transplants.

Elected to the National Assembly in 1997, he headed its commission on public finances and was named budget minister when Hollande formed his first government following his victory over ex-president Nicolas Sarkozy last May.

If convicted, Cahuzac faces up to five years in prison and a potential fine of up to 375,000 euros.

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http://www.globalpost.com/dispatch/news/afp/130403/french-government-reeling-ex-minister-tax-scandal-1