A Growing Scandal in France: L'Oréal Affair Reaches Sarkozy

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At times, there must have been something like a run on the salon of the villa on the outskirts of Paris. High-ranking conservative politicians would flock to the home to obtain cash-filled envelopes directly from the hands of the Bettencourts. Sometimes it was €10,000, sometimes €20,000, but even as high as €50,000 or €100,000. In this discrete manner, the billionaire family at the helm of the L'Oréal cosmetics empire put their stamp on French politics.

The latest twist in the case came on Tuesday, when the French website Mediapart published claims by a former accountant for heiress Liliane Bettencourt, who answered police questions about missing ledgers in the billionaire's books last week. Claire T. then shared her revelations with the site. She claims that the happy recipients of the cash gifts at Bettencourt's palatial home were prominent conservatives. At the time the gifts were allegedly given, French President Nicolas Sarkozy -- then mayor of Neuilly-sur-Seine, the well-heeled Paris suburb where Bettencourt lives -- was a frequent visitor.

The sensational details about the Bettencourts and their relations with France's political leadership come at a bad time for Sarkozy: Up until this week, the architect of his important pension reforms, Labor Minister Eric Woerth, had previously been the highest official entangled in the affair.

Élysée Palace, the president's office, has strenuously denied all claims of wrongdoing. It has also dismissed claims that Sarkozy obtained cash from the Bettencourts as "totally false." On Tuesday, Sarkozy described the allegations as "libel that aims only to smear, without the slightest basis in reality." And Woerth said he was "outraged" by the claim and that he has "never received the slightest euro that wasn't legal." Bettencourt herself has said she acted within the legal limits with donations she made to Sarkozy's Union for a Popular Movement (UMP) party.

Embarrasing New Revelations

Still, the government has been burdened by the almost daily series of embarrassing new revelations in the scandal. Sarkozy had hoped that the allegations about the possible participation of his labor and treasury ministers could be whitewashed through the firing over the weekend of two state secretaries embroiled in an expenses scandal. But the public glimpse of the incestuous relationship between money and power still threatens to shake the country's leadership -- because, for the first time now, the president is being personally drawn into the scandal.

Claire T. has claimed to police that she herself was responsible for withdrawing the cash from a branch of BNP bank in Paris' 16th arrondissement. At times, she says, the accounts would be replenished with cash from Switzerland -- but that was primarily the work of the Bettencourt's financial advisor Patrice de Maistre. Among those T. alleges profited from the generosity were senior leaders of the conservative and now defunct Rally of the Republic (RPR) party, including former Prime Minister Édouard Balladur or, more recently, UMP party treasurer Woerth, who she claims received a generous €150,000 for Sarkozy's presidential election campaign.

"Sarkozy got his envelopes, too," Mediapart has quoted the accountant as saying. "That usually happened after the meal, and everyone in the house knew it." Sarkozy had made frequent visits to the Bettencourts. "It happened in a small living room on the ground floor, and because the Bettencourts had hearing problems, they spoke loudly to the politicians and you could understand everything," she claims, according to the news site.

It will be difficult for prosecutors to confirm Claire T.'s claims. According to the bookkeeper, the amounts given out were noted in three different account books, and any cash political contribution was labeled "Betencourt" so that Claire T. "would leave no traces of the contributions to politicians."

Mediapart director Edvy Plenel said that Claire T. is "aware of the seriousness of her allegations." Explaining her motive for coming forward, he said: "She is upset about the mixing of public and private interests and the highest national level -- right up to the presidency."

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• Part 1: L'Oréal Affair Reaches Sarkozy
• Part 2: Love, Money and a Lot of Trouble
• Part 3: France's Pension Predicament