A family feud over the fortune of France’s richest woman—Liliane Bettencourt, heiress to the L’Oréal cosmetics empire, who’s worth a reported $20 billion—has touched off a scandal about alleged illegal campaign contributions that threatens to drag down Nicolas Sarkozy himself. For the French president, who’s pushing austerity measures to shore up the country’s economy in the face of the global economic crisis, it couldn’t have come at a worse time: earlier this month, his approval rating fell to 33 per cent, making him the most unpopular French leader since the pollsters started keeping track 30 years ago.
When he was elected in 2007, Sarkozy was something of a novelty in France, says Edward Berenson, director of the Institute of French Studies at New York University. “He wasn’t squeamish about money and success,” he says. While it intrigued voters at first, “two years into the economic crisis, that perception is costing him.” And with l’affaire Bettencourt splashed across the French dailies—rife with tales of cash-stuffed envelopes and lavish gifts—the recession-rattled public’s patience for Sarkozy is wearing thin.
The scandal began when Bettencourt’s own daughter tried to have her mother declared legally irresponsible in court, after accusing society photographer François-Marie Banier of taking advantage of her. The 87-year-old, it was revealed, has given Banier gifts worth over $1 billion, from artworks by Matisse to a private island in the Seychelles. As soon as the trial began, on July 1, it was postponed when another bombshell dropped: secret tapes referring to undeclared Swiss bank accounts, and cash donations to Sarkozy’s party. Bettencourt’s own butler made the tapes, hiding a recorder in the china as she met with her financial adviser—for her protection, he said.
Prosecutors launched an investigation into Bettencourt’s tax affairs just as she promised to get them in order, but it didn’t end there. Last week, in an interview with French website Mediapart, Bettencourt’s former accountant said her boss had given almost $200,000 in cash to Sarkozy’s presidential campaign, 20 times the legal limit. She claimed the cash was handed to Éric Woerth, French labour minister and treasurer of Sarkozy’s party, whose own wife worked at the firm that manages the Bettencourt fortune (Florence Woerth stepped down in June). Woerth and Sarkozy vehemently denied the allegations—in a televised appearance Monday night, Sarkozy referred to him as an “honest man”—but on Tuesday, Woerth announced he’d step down as party treasurer.
How badly this affair will impact Sarkozy remains an open question, but if the optics are bad, the timing is worse. After months of denying any belt-tightening was necessary, the government had been in the midst of pushing a series of austerity measures—with Woerth as their main cheerleader. In June, the finance minister announced a pension reform plan aimed at overhauling the system, now running a $13-billion deficit. To keep more workers paying in as a wave of baby boomers retire, the cherished French retirement age of 60 will be bumped up to 62 by the year 2018. (Woerth will remain as labour minister and continue to oversee pension reform, which will be voted on in October.)
For some, Sarkozy’s appeals for cutbacks are a bit rich. Socialist politician Ségolène Royal has criticized him for going ahead with the purchase of a new, Air Force One-style presidential plane (Sarkozy has said the plane will save money overall). And two junior ministers were recently fired after it was revealed they’d spent thousands of taxpayers’ euros on cigars, and a private jet. Media reports have gleefully noted the austerity measures politicians are facing: besides cutbacks to their staff and travel budgets, the presidential boar hunt was cancelled, and champagne and foie gras will no longer be served at cabinet meetings.
All that, and the Bettencourt summer soap opera, have serious implications for Sarkozy. While the British, for example, have largely accepted the need for austerity measures, “there is no such sentiment visible in France,” where people tend to blame “capitalism run amok” for the financial crisis, notes Tim Smith, undergraduate chair of the Queen’s University history department and an expert in modern France. Seen as a pro-American outsider, Sarkozy “was always a divisive character,” Smith says. “If he loses the swing voters, he is doomed.”