French finance chief in party funds scandal

John Lichfield

Paris

The French finance minister, Jean Arthuis, the man responsible for guiding France into the euro, is to be placed under formal investigation for the illegal funding of a political party, according to Le Canard Enchaine.

The investigative newspaper reported yesterday that similar legal procedures - one step short of formal charges - will be brought against the labour and social affairs minister, Jacques Barrot, and two prominent former ministers.

If Le Canard is right (which it usually is) the French government's cup of embarrassments may be about to run over into outright scandal and political damage. The piling up of corruption accusations in recent months against leading businessmen and senior and junior politicians of almost all parties has already created a critical mass of public disgust with the establishment.

Over 500 national or local political and business figures have been convicted, accused or placed under investigation in the last three years for various degrees of financial chicanery, involving political or personal gain. Extremely serious financing charges are pending against the neo-Gaullist RPR party of President Jacques Chirac and Prime Minister Alain Juppe. The mayor of Paris, Jean Tiberi, and his wife Xaviere - close friends and associates of the President - are under investigation for peddling political influence. Several senior Socialist Party figures, including the former treasurer Henri Emmanuelli, have been convicted and face further trials for slush-funding the party in the 1980s.

Some of the charges flow from the ambivalent rules on political funding which were tolerated for years but were called into question in the early 1990s, partly by the centre-right for tactical-political reasons which have now backfired against it. Other cases,like that of the former Socialist minister, Bernard Tapie, now in jail, involve outright crookedness and personal enrichment. Either way, the far-right Front National - sheltered from investigation by the extreme secrecy and opacity of its own funding - is making political hay of the alleged, endemic corruption.

The case against Mr Arthuis and Mr Barrot involves the chaotic funding of the CDS - the Centre des Democrates Sociaux - one of the fragments of the centre-right UDF federation, which is now in power with the Gaullists. The party, which has now changed its name to Force Democrate, has long been celebrated for having almost as many high-profile political leaders as grass-roots supporters. It is alleged that large sums were paid by big business into a bank account in Switzerland and then transferred back to France for the party's use.

Le Canard says magistrates investigating the case will also issue formal warnings to two former CDS ministers, Bernard Bosson and Pierre Mehaignerie. Irony of ironies, it was Mr Mehaignerie, as justice minister in 1995, who began the investigation into his own party. He is said to have wanted to prove his impartiality and to have been convinced that the inquiries would come to nothing.

He, with the others, now faces preliminary accusations of "improperly receiving company funds" and "trafficking in influence". In other words, it is alleged that the party was being slush-funded by business in the hope of gaining advantage when the party came to power. There is no suggestion at this stage of personal enrichment. However, an audit of the party's finances in 1992 did find that large sums were passing inexplicably through the CDS accounts.

At the very least, it will be embarrassing for the French government to have its finance and economy minister embroiled in allegations of incompetent and improper funding of a political party. Le Canard says that the formal warnings of investigation of the quartet of CDS leaders were due to go out in the next few days but advance warning of its scoop caused consternation in political and judicial circles. As a result, the letters of warning may be delayed but will go out, said the newspaper.

Mr Juppe will then face an awkward decision on whether to ask the two senior ministers to resign, pending the outcome of inquiries. This has become the norm in recent years but the Prime Minister's party colleague Mr Tiberi has refused to step down as mayor of Paris during his own legal troubles.