Cannes mayor on casino bribery charges

The mayor of the French riviera resort of Cannes, Michel Mouillot, was in prison last night on corruption charges after a sting operation in which an alleged intermediary was caught receiving a large sum of money in a hotel in central London.

The operation, in which French police, French intelligence and Scotland Yard were said to have co-operated, could finally end the political career of Mr Mouillot, who is appealing against his conviction on an earlier corruption charge.

The latest case reportedly involves an application for a fruit machine licence submitted by a British-owned company, London Clubs, for its Carlton Club casino in Cannes.

According to the newspaper Le Monde yesterday, London Clubs had established that its returns were falling badly behind those of two other casinos in Cannes and decided that it was time to copy those more profitable operations and have fruit machines installed. For this, however, it required a licence from the city authorities.

The response to the application was said to have been a request from the mayor's office, at a tete-a-tete meeting, for a 3m franc (pounds 390,000) kickback "towards election expenses". At this point, London Clubs decided not to play the game by local rules and contacted the police. From that point on, French intelligence became involved, and an undercover operation was set in train to trap the culprits.

London Clubs agreed to negotiate payment of half the solicited kickback upfront before 28 June when its licence application came before the city council, and the other half when the licence was approved and the machines installed.

The first part of the transaction was agreed by telephone and supposed to take place at 9am on 28 June at the Ritz hotel in London. The representative of London Clubs was told to look out for a woman named as "Madame Clement", who would be immediately recognisable by being very tall.

The day before, however, the meeting was called off. Mr Mouillot's office reportedly said that "cousin" was "ill". None the less, the licence was approved next day.

A fortnight later, a new rendezvous was fixed - for 17 July at 9.30, this time with a man. He was apprehended by police in the act of receiving the a suitcase containing Ff1m in cash, and named as Daniel Teruel, a Frenchman aged 46. However, a couple from Cannes who were staying in London, and to whom he was supposed to have handed over the money, had vanished.

Within hours of the arrest in London, the head of Mr Mouillot's private office and his office manager were arrested in Cannes, but Mr Mouillot - said to be at his country villa - was nowhere to be found.

He was finally arrested on his return late in the evening, and remanded in custody. French police are seeking the extradition of Mr Teruel.