Chirac accused of using charity funds to buy land

President Jacques Chirac abused his position as treasurer of a charity for the handicapped to obtain control of a piece of land close to his château in south-west France, the investigative newspaper Le Canard Enchainé says.

The latest accusation of financial wrongdoing against Mr Chirac, who is already under scrutiny in a kickbacks-for-holidays scandal, dates from 1978, when he was Mayor of Paris and leader of the neo-Gaullist RPR party.

Le Canard said the Fondation Claude-Pompidou, created by the widow of the former president, and Mr Chirac's political mentor, Georges Pompidou, paid 500,000 French francs (the equivalent of 1.4m francs or £140,000 today) for 12 acres of land close to the Chirac family château at Bity in the foothills of the Massif Central.

At the time, Mr Chirac was vice-president and treasurer of the foundation, set up to help the handicapped and impoverished pensioners. The stated intention was to build a holiday camp for the aged. The camp was never built. The land – still belonging to the Fondation Claude-Pompidou – remains unused.

Le Canard said there had been a rival plan in 1978 to build a public holiday camp and small hydro-electric generator on the site. The only road to the land passed close to the Chirac residence and, the newspaper said, Mr Chirac feared the development would disturb the peace of his château. Instead of buying the land himself, the newspaper claimed, he persuaded the Pompidou foundation to do so.

The foundation confirmed yesterday that it still owned the land. Officials said there had been a plan to build a holiday centre on the site, but this had come to nothing. They could not explain why the land had not been sold. Le Canard said the Pompidou foundation was constantly short of money.

There is a lengthy catalogue of accusations of corrupt or dubious activities by Mr Chirac before he became President in 1995. With political and judicial activity ceasing yesterday for the traditional August break, the hue and cry against the President is likely to die down for a while.

But in September Mr Chirac will face unresolved questions about his alleged use of cash from kickbacks on town hall contracts to fund £230,000 worth of holidays for himself, family and friends between 1992 and 1995. He also faces a potentially explosive judgment on 5 October by the highest French appeal court, the Cour de Cassation, which will decide whether the President has complete constitutional immunity from normal legal investigation, as he claims.

If the court decides the President should at least give evidence to investigators, Mr Chirac could be implicated in at least three criminal inquiries into corruption and vote-rigging while he was mayor of Paris from 1977 to 1995.

Mr Chirac and his supporters have tried, with some success, to present the accusations and investigations as a politically-motivated, preliminary barrage before the presidential election in April. Since the President used his customary television interview on 14 July to deny the allegations en bloc, opinion polls have been utterly confused. Two polls have shown Mr Chirac's support in the country holding strong. Two polls have shown it slipping steeply.

The President claims that the wads of Fr500 (£50) notes he used to pay for his private trips in the early Nineties came from cash bonuses he was paid from "secret" state funds – as are all senior ministers and officials – when he was Prime Minister from 1986 to 1988. Three investigating magistrates believe the cash may have come from £40m in kickbacks paid by construction companies seeking building contracts for schools in the Paris area.

Last week the French parliament handed magistrates the financial statements made by Mr Chirac as an MP. There was no mention of the large amount of cash he claims he was holding from his period as Prime Minister. Mr Chirac says that since the bonuses were paid from secret funds he did not need to declare them.

The circular arguments over the secret funds have tended to obscure the real issues.

Could Mr Chirac have been paid £230,000 in cash bonuses while he was Prime Minister for two years from 1986 to 1988? And would he have hoarded the cash for up to seven years before using it to pay for holidays in America, Japan, Mauritius and elsewhere?