Nicolas Sarkozy dismisses it as an election campaign “stink bomb” concocted by his opponents. The leftwing newspaper Libération sees it more seriously, portraying the French president on its front page at the weekend sitting on a real bomb with the fuse burning down.

“It” is the Bettencourt Affair, a tangled tale even by French standards of the management of the €15bn fortune of Liliane Bettencourt, the frail 89-year-old heiress to the L’Oréal cosmetics empire.

Smouldering away for years, the affair has as one of its principal subplots an allegation, which has re-emerged in recent days, that large amounts of Bettencourt money were handed over in cash to help finance Mr Sarkozy’s presidential election campaign last time round in 2007.

The president vigorously denied the charge on Tuesday, saying that his 2007 campaign accounts had been scrutinised to the last centime by the official campaign accounts commission, and confirmed by the constitutional counsel. “As always ahead of the presidential election, there are a certain number of stink bombs. It’s classic, it surprises no one, but it’s not very nice,” he told Canal Plus television. This was similar to an indignant denial Mr Sarkozy issued on another television programme a few weeks ago when allegations resurfaced that his 2007 campaign had also received funds from the late Libyan dictator Muammer Gaddafi.

The Bettencourt affair will grind on, however. The Bordeaux court hearing the case late last month placed into custody Patrice de Maistre, her former personal wealth manager, while he is investigated on potential charges including abuse of confidence, abuse of funds and swindling – all of which he denies.

At issue is the fate of €4m allegedly moved from Bettencourt bank accounts in Switzerland in seven tranches between 2007 and 2009. French media reports have suggested some of the money was passed to Eric Woerth, Mr Sarkozy’s campaign treasurer in 2007.

Mr Woerth, a former budget minister, is himself under investigation in the case for allegedly using his influence to secure a national service honour for Mr de Maistre. Mr Woerth has also denied any wrongdoing.

The case now seems unlikely to reach a decisive moment before voting in the two-round presidential election on April 22 and May 6, but it seems safe to assume that, stink bomb or no stink bomb, the sulphur from this will continue to swirl.

Caviar socialism

Ms Bettencourt has figured before in another uncomfortable issue for Mr Sarkozy – her tax bill.

The president is desperately fighting to shed the image hung on him by the left as being “the president of the rich”. One of the reasons it tends to stick is the “bouclier fiscale”, or tax shield, he put in place when he first came to power, putting a ceiling of 50 per cent on the amount of tax that
could be levied on an individual’s income. As a result, Ms Bettencourt received a handy rebate from the taxman of €30m – causing outrage in a country where a first rule of politics is to squeeze the rich, not coddle them.

The tax shield was canned during the financial crisis when the government needed every penny it could get to stem the country’s fast-mounting debt. But with François Hollande, his Socialist rival, upping the ante by proposing a 75 per cent marginal rate on incomes above €1m, Mr Sarkozy has had to come up with new taxes of his own on the rich.

His main proposal is to snare tax exiles by obliging them to pay any difference over French tax rates on their investment income. Like Mr Hollande’s proposal, it will not raise a lot of money – only about €500m. But it would catch Yannick Noah, the tennis star-turned-musician who regularly tops France’s most popular personality lists and who is backing Mr Hollande.

Mr Sarkozy likes nothing better than to have a go at such “caviar socialists”. He was at it again last week when the news broke that Maurice Lévy, head of the big advertising group Publicis, was in line for €16m in accrued bonuses to be paid out this year. Without naming names, he pointed out that Elizabeth Badinter, the biggest shareholder in Publicis, had close ties to the Socialist party.

It was a case, he said, of those “who support François Hollande in the aeroplane in the evening, and in the day vote for exorbitant pay deals for the head of a large company”. And there is still a fortnight to go…

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