The mother (and daughter) of all quarrels
The feud over Liliane Bettencourt's fortune has split the L'Oréal dynasty, engulfed French security services and threatened Sarkozy. Now she's lost control of her €18bn. But, asks John Lichfield, is this the end of the affair?
It began as an ordinary family row over love, power and money and has become the mother, and daughter, of all quarrels. The "affaire Bettencourt", which has intrigued and occasionally shaken France for three years, triggered two separate, new explosions this week. The affair now threatens to destabilise L'Oréal, the world's largest cosmetics company. It is also turning into a full-blown, state scandal, which could seriously embarrass an already struggling President Nicolas Sarkozy.
After losing a long legal battle with her only daughter, the L'Oréal heiress, Liliane Bettencourt, 88, France's wealthiest woman, has been declared senile by a French court. Her £15.8bn (€18bn) fortune has been placed under the control of her estranged daughter and two grandsons.
At the same time, the head of France's internal security service, the French equivalent of the FBI, has been accused by an investigating magistrate of acting illegally to trace press leaks on the political implications of the Bettencourt affair. The head of France's national police force is shortly expected to suffer the same fate. Both men are appointees and long-standing allies of President Sarkozy.
How has a spat in France's third wealthiest family – a family which once detested the limelight – become so such public and so venomous? Why does a quarrel between a fun-loving, billionaire mother and her reclusive daughter threaten to damage President Sarkozy?
The Bettencourt affair has tangled, and often poisonous, roots in modern French history. It draws some of its bitterness from the post-war – and not just interwar – anti-Semitism of the French haute bourgeoisie.
It embraces President Sarkozy partly because the family saga has been acted out in Neuilly-sur-Seine, France's wealthiest town, outside the western boundary of the city of Paris. Liliane Bettencourt and her daughter, Francoise, live on opposite sides of one of the richest streets in the richest quarter of France's richest commune. Until 2007, when he became President of the Republic, the mayor of Neuilly-sur-Seine was Nicolas Sarkozy.
L'Oréal was founded in 1909 by Liliane's father, Eugene Schueller. In 1907, he invented the world's first successful hair dye. Liliane, his only child, was involved in the company from young womanhood, including, at one time, working on the factory floor. In 1950, she married a right-wing, haut-bourgeois, high-Catholic, journalist and politician, André Bettencourt. Their only daughter Francoise was born three years later.
Liliane has always been an enthusiastic socialite. Francoise became a shy, quiet girl, and brilliant pianist.
In 1984 she married– against her parents' initial wishes – Jean-Pierre Meyers from a wealthy, French Jewish banking family. Five years later, it emerged that both Eugene Schueller and André Bettencourt had worked for the extreme-right, virulently anti-Semitic Cagoule movement before the Second World War.
Some Bettencourt and L'Oréal insiders suggest that the rift between Francoise and her mother began at that time. That may be too simple.
Ill-feeling between the L'Oréal matriarch and her Jewish son-in-law does seem to be part of the explanation of the family quarrel. However, Francoise remained very close to her father until his death. She appears never to have been very close to her mother. During the 1990s, L'Oréal, under the leadership of the Cheshire-born Lindsay Owen-Jones, became the world's largest cosmetics company and one of the most successful and valuable multinational companies in Europe. The Bettencourt fortune increased tenfold.
Soon after her father's death in 2007, Francoise began to complain about her mother's close friendship with a playboy writer and photographer, Francois-Marie Banier. The relationship was never sexual. Mr Banier is gay. His original friendship was with Liliane's husband, André.
Francoise Bettencourt-Meyers protested that Mr Banier had turned her mother against her. She also objected to the extravagant presents which her octogenarian mother had showered on the anti-establishment, left-wing, professedly money-hating photographer. Ms Bettencourt gifts to her friend were estimated to be worth over €1bn, including art-works, cash, life insurance policies and an island in the Indian Ocean.
In late 2007 Francoise began the first of a series of legal actions to try to prove that her mother was senile and was being cheated by her entourage. Mr Banier was not the only culprit, according to Ms Bettencourt-Meyers. She also protested about the activities of Patrice de Maistre, the manager of Liliane's personal fortune and a pillar of French society.
In the summer of 2010, the "affaire Bettencourt" exploded into a political scandal. It emerged that Liliane's ex-butler, Patrice Bonnefoy, had secretly taped many of the old lady's conversation between April 2009 and May 2010. The transcript was sent to judicial investigators and leaked to the press. The bugged conversations implied that President Sarkozy had tried to manipulate the justice system to block Francoise Bettencourt-Meyers' legal action. They suggested that Ms Bettencourt was systematically hiding part of her fortune abroad to fiddle her taxes. They also suggested that Mr Sarkozy's 2007 campaign treasurer, Eric Woerth, had sought political funds while also asking for a job for his wife to manage Ms Bettencourt's money.
The tapes gave a compelling portrait of the atmosphere of hypocrisy, greed and anti-Semitism among Ms Bettencourt's friends and advisers. The photographer, Mr Banier, emerged as a money-obsessed bully. The financial adviser, Mr de Maistre, was heard to wheedle a large cash present out of Ms Bettencourt for the yacht "of my dreams".
Ms Bettencourt's former accountant, Claire Thibaut, then gave a statement to investigators. She also gave an interview to a left-wing website, Mediapart. She told the website that she had helped to raise an illegal €150,000 cash payment from Ms Bettencourt for Mr Sarkozy's campaign in the 2007 presidential election. She also said that Mr Sarkozy, as mayor of Neuilly, was often given envelopes stuffed with cash by Ms Bettencourt and her late husband. Ms Thibaut, under enormous police pressure, later repudiated that claim.
In the autumn of 2010, the multiple powder-trails from the mother-daughter quarrel set off a new political explosion. The respected centre-left newspaper, Le Monde, brought a legal action alleging that the élysée Palace had used the French police and internal security service to stifle press leaks in the Bettencourt affair.
An independent judicial investigation into that claim led on Monday to the extraordinary sight of France's head of internal security, Bernard Squarcini, being hauled before an examining magistrate. He admitted that his agency, the Direction Centrale du Renseignement Intérieur (DCRI), had forced telephone companies to hand over the detailed phone records of a Le Monde journalist.
Mr Squarcini said that he had been acting to protect "state security". He was placed under formal investigation for "invasion of personal correspondence" and "illegally gathering private information".
The head of the French police force, Frédéric Pechenard is expected to face similar action in the next few days. Both men have been closely associated with President Sarkozy for years.
Late last year, the original mother-daughter quarrel appeared to have been resolved. Mr Banier agreed to give back most of his extravagant gifts. Lilliane agreed to speak to Francoise. The élysée Palace is reported to have brought pressure on the Bettencourt family to agree to this reconciliation. But within weeks, mother and daughter were quarrelling again. Francoise made a new attempt to prove that her mother was not responsible for her actions and was, once more, being badly advised by her entourage.
On Monday a court near Paris accepted medical evidence that Liliane Bettencourt was suffering from "dementia, a moderately severe form of Alzheimer's disease and a slow, degenerative brain condition". She was placed under the control of her daughter and two grandsons.
In an interview with the Journal du Dimanche last Sunday. Ms Bettencourt, had said that such a fate would be her "worst nightmare".
"If that happens, I'm going abroad," she said. "If my daughter was in charge of me, I would suffocate... I would have no more desire to live."
Her lawyers have appealed against the ruling.
The saga continues...
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