French official forced to resign in tax probe

March 19, 2013

Budget Minister Jerome Cahuzac, a key actor in France’s struggle to bring down the deficit, was forced to resign Tuesday over accusations that he once held a secret Swiss bank account to hide money paid to him by drug companies during his earlier career as a doctor.

Cahuzac’s departure, announced by President Francois Hollande’s office, made him the first member of Hollande’s 10-month-old government to be pushed out of office on suspicion of impropriety. It was particularly embarrassing to the Socialist president because the combative Cahuzac embodied the tax rises and budget cuts that have been a strongly criticized part of Hollande’s rule.

In a statement, Cahuzac said he resigned to better defend himself and to prevent the government from being inconvenienced by the accusations against him. He denied committing any misdeeds.

For months, in interviews and in a solemn declaration to Parliament, Cahuzac has denied having a secret Swiss bank account or otherwise dodging taxes. To dramatize his denial, he brought a libel suit against Mediapart, the investigative Internet news site that leveled the accusations.

The resignation came hours after the Paris prosecutor’s office announced that it was opening a formal investigation, suggesting that it would name a special investigating magistrate. The step did not mean that Cahuzac was under indictment, but only that the prosecutor’s office deemed the allegations were worthy of further investigation.

“It concluded logically the same thing we did, that is, that a judicial inquiry is necessary to carry out international investigations,” said Edwy Plenel, who directs Mediapart.

The prosecutor’s office said it acted because a scientific analysis and reliable witnesses had confirmed the authenticity of a two-decade-old recording in which, according to Mediapart, Cahuzac is heard telling a friend that he was troubled by having an account in Switzerland.

Moreover, it said, other witnesses interrogated during a preliminary investigation said the account may have contained money paid to Cahuzac by drug companies. The prosecutor’s office did not specify what the money might have been paid for. Before going into politics, Cahuzac made a fortune running a hair-implant clinic in partnership with his former wife.

“The queries carried out as part of a preliminary investigation must be pursued from now on in a more appropriate procedural framework, given the complexity of the investigation to be pursued, putting into practice international repression assistance in Switzerland as well as Singapore,” the prosecutor’s office said.

Mediapart reported that the account had been closed more than a decade ago and that the money apparently had been transferred to a bank in Singapore. Cahuzac also denied the existence of this account.

Cahuzac was replaced by Bernard Cazeneuve, who had been deputy minister for European affairs.

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