Former President Nicolas Sarkozy has been found guilty of breaching the official limit on the cost of last spring's presidential campaign – threatening his party with bankruptcy.
France's election finance watchdog rejected Mr Sarkozy's expenses, alleging that he had used taxpayers' money to campaign for re-election before he officially entered the race in February. The Sarkozy campaign was also accused of an accountancy fiddle to transfer half the cost of a giant rally at Villepinte near Paris to the separate, parliamentary elections in June.
Mr Sarkozy will appeal. If he loses, his centre-right party, the Union pour un Mouvement Populaire (UMP), already deeply in debt and suffering internal schisms, would lose €11 million in state subsidies. Officials fear this could tip the UMP, France's largest party, into bankruptcy.
The watchdog's ruling – unprecedented for a major party in France – is deeply embarrassing for Mr Sarkozy. He already faces possible legal action for alleged illegal campaign fund-raising before he was elected president in 2007. This week a judicial investigation was also ordered into his alleged misuse of taxpayers' funds to finance private opinion polls for electoral purposes.
Although Mr Sarkozy, 57, announced his retirement from politics in May, friends hinted he would be delighted to be recalled as "France's saviour" before the 2017 election. A "conviction" for irregular campaign financing would hardly help his chances.
Mr Sarkozy received a warning letter at the Paris mansion that belongs to his wife, Carla Bruni-Sarkozy. The Commission des Comptes de Campagne et des Financements Politiques (CNCCFP) informed him it refused to approve his campaign expenses of €1,339,664.
The committee said that, by its calculations, the expenses failed to include the cost of several trips and speeches made by President Sarkozy before he declared his candidacy in February. Although declared to be part of the business of the state, the meetings were clearly electoral in intention, the committee decided.
The CNCCFP also objected to the fact that Mr Sarkozy had shifted half the cost of a campaign-launching meeting at Villepinte in February– to which 60,000 people were bused from all over France – to the accounts of the June parliamentary elections. The decision was justified by Mr Sarkozy by the fact that the UMP held a national council meeting in the wings of the rally to confirm the names of parliamentary candidates which were already, in effect, decided. The watchdog committee also queried the fact that the UMP had included only a small amount for private opinion polls – far less than the Socalist eventual winner, François Hollande. Under France's law on state financing of campaigns, a party which fights both rounds of a presidential election is entitled to a 47 per cent refund from the state if its costs do not exceed €22.5m. The watchdog committee calculates that, once all "real" expenditure is included, Mr Sarzkozy's campaign exceeded this limit by at least €2m.
Mr Sarkozy's campaign treasurer, Philipe Briand, annouced that he would appeal to the Conseil Constitutionnel, the supreme arbiter of state actions. As an ex-President, Mr Sarkozy sits on this body but will have to stand down when his own case is discussed.
UMP officials said they might also make a counter-claim by demanding the whole cost of the Socialist primary election should be included in President Hollande's campaign accounts.