Swiss Account of Ex-Minister Further Darkens Hollande’s Political Fortunes

Former French Minister responsible for hunting tax dodgers and enforcing austerity acknowledges claims he has a secret Swiss bank account, dealing another blow to President François Hollande's slumping fortunes as appeal of extreme-right rises.

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The troubling political outlook for French President François Hollande darkened further April 2, after his former austerity-enforcing Budget Minister Jérôme Cahuzac admitted to possessing a secret Swiss bank account whose existence he previously denied. The avowal not only delivers a blow to Hollande’s campaign pledge to return transparency and accountability to government. It also undermines the President’s attempts to convince public opinion to accept deficit-reduction efforts he said were being exacted from all sections and actors of French society.

Cahuzac resigned his cabinet position March 19 just hours after French prosecutors launched an official inquiry into suspicions of tax fraud. Despite that, the former amateur boxer never flinched from earlier, insistent denials of wrongdoing—and even launched slander proceedings against online publication that first broke the allegations. That position of innocence became harder to maintain after an audio recording Mediapart produced of someone fretting about the ability to keep his Swiss account secret from potential inquiry was verified by vocal testing to be that of Cahuzac. By March 26 he’d become sufficiently sure the truth would come out that Cahuzac wrote a letter to the two investigative magistrates overseeing the case to request an interview—a session of mea culpa Cahuzac revealed  on his web site Tuesday afternoon.

(MORE: Amid the Depardieu Tax Debacle, France’s Budget Minister Accused of Dodging Taxes)

“I met the two judges today,” Cahuzac wrote April 2. “I confirmed to them the existence of the account, and informed them that I’ve already given instructions necessary for all assets deposed in the count—which has not been added to for around 12 years—(worth) around €600,000 euros ($768,000) be repatriated to my Paris bank…Thinking I could avoid confronting a past I considered long gone was an unspeakable error. I will now face this reality in complete transparency.”

He’ll have little choice. The result of his avowal to judges led to Cahuzac’s immediate placement under investigation —a step under France’s legal system akin to indictment. The crimes of tax evasion and money laundering involved carry potential prison terms in case of conviction. Even should he avoid a jail sentence, the former plastic surgeon’s career in politics is now almost certainly over. As a cabinet member who made the hunt for wealthy tax dodgers a priority—and who used his reputation of honesty and discipline to enforce unpopular austerity measures on fellow ministers and the public alike—Cahuzac’s repeated lying in the affair may prove as damaging as the illicit money moves that gave rise to it.

Yet most observers in France were speculating more about how the new twist in the case would affect Hollande. The painstaking treatment of France’s financial crisis and stagnating economy have led his approval ratings to slump since taking office in May, with the latest polls in late March showing support down to just 27%. Hollande’s fortunes have also been undermined by media-loving members of his cabinets prone to making controversial statements, or staking out frontally opposed positions to one another in public. Hollande’s own televised effort March 28 to reconnect with public opinion and fully explain his policy strategy and plan for turning France’s economic woes around was largely panned by pundits.

The confession of a former cabinet pillar like Cahuzac now also risks tainting Hollande by association, and could lead some voters to ponder the President’s own reputation of honesty and openness. It was in part due to that concern that the Elysée immediately issued a communiqué noting the “great severity” with which Hollande took in the news. It also condemned the “unpardonable moral error” the ex-Budget Minister committed by lying to “the highest authorities of the state and before the national representation” of parliament.

“For a political leader, two virtues are obligatory,” the Elysée statement read. “Exemplarity, and the truth.”

Given the on-going legal procedures dogging leading members of the former ruling right—including the official implication of ex-President Nicolas Sarkozy in an illicit campaign financing scandal March 28—there will be limited political hay conservatives can make with Cahuzac’s avowal. Others will have more opportunity.

Extreme-right National Front (FN) leader Marine Le Pen has never ceased calling allegations and inquiries of wrong doing on both the left and right proof of her claims France’s mainstream parties are alike—and all corrupt. Salvation, she argues, lies only in throwing dishonest and discredited politicians who’ve ruled the nation for decades out, and replacing them with untainted new blood of her forces. Many voters are listening.

In parliamentary polling last June, the NF won two legislative seats—including one by Le Pen’s niece—marking the party’s first return to parliament in decades. In a legislative by-election March 24, Le Pen’s party narrowly lost in run-off polling against a conservative rival after the Socialist candidate was eliminated in the first round. And even before his numbers slipped anew later in the month, Hollande found himself trailing Le Pen in approval surveys taken in mid-March.

To be sure, Hollande has four long years—and promise of vital economic improvement— to reverse his own slide as well as the populist allure of challengers like Le Pen. But Cahuzac’s confession will make it more difficult to rebuff public perceptions of spreading political dishonesty—or convince crisis weary French voters to believe in the painful efforts of financial sacrifice they see some leaders dodging.

(MORE: Nicolas Sarkozy’s Battle With France’s Judiciary Leads to Death Threats)