French labour minister to be questioned in scandal

PARIS Tue Jul 20, 2010 6:58pm BST

French Labour Minister Eric Woerth (C) attends the government questions session at the National Assembly in Paris July 13, 2010. REUTERS/Benoit Tessier

French Labour Minister Eric Woerth (C) attends the government questions session at the National Assembly in Paris July 13, 2010.

Credit: Reuters/Benoit Tessier

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PARIS (Reuters) - French Labour Minister Eric Woerth will be questioned by police investigating the tax affairs of France's richest woman, prosecutors said on Monday, in the latest twist of a scandal that has hit the government.

Woerth has denied receiving illegal cash donations for President Nicolas Sarkozy's 2007 election campaign from L'Oreal cosmetics heiress Liliane Bettencourt, 87, the woman at the centre of the probe into alleged tax evasion and money laundering.

Despite being cleared by an official report of any interference in Bettencourt's tax affairs when he was budget minister, Woerth continues to face allegations that he used his influence to secure a position for his wife with a company that manages part of Bettencourt's fortune.

The case has transfixed France and embarrassed Sarkozy's government.

"The public prosecutor has officially requested that Eric Woerth be questioned," the prosecutor's spokesman told Reuters.

Sarkozy's office said the cabinet would authorise the minister on Wednesday to testify.

Woerth insisted in a radio interview he would not resign and denied playing any part in the recruitment of his wife. "I never asked anyone to employ my wife, ever," he told Europe 1 radio.

The minister, who is heading up a disputed pension reform, insisted he has not been weakened by the Bettencourt affair.

The opposition Socialists appealed to Sarkozy to ensure that an independent magistrate was appointed to investigate the Bettencourt affair.

"The debate on pensions is more polluted than ever by the daily revelations in what has become known as the Woerth-Bettencourt affair," the Socialist parliamentary group said in a statement.

NEW PROBE AT L'OREAL

Paris prosecutors also began an investigation into a complaint by a L'Oreal investor about a consultancy contract awarded to Francois-Marie Banier, a friend of Bettencourt who is on trial on charges of abusing her frailty to obtain 1 billion euros in gifts.

The complaint alleges that the 10-year contract signed in 2002, under which Banier receives 405,000 euros ($523,300) a year for artistic advice, is a misuse of company funds.

"Were any services actually provided? A contract to decide on the colour of a little pink and red bottle, is that really worth 400,000 euros?" the plaintiff's lawyer, Frederik-Karel Canoy, told Reuters.

Contacted by Reuters, L'Oreal said it had no comment on the complaint, but confirmed that Banier was still under contract with the cosmetics giant.

"We confirm the existence of a contractual agreement, which is of public knowledge, with Banier for 10 years, ending in 2011," a L'Oreal spokeswoman said.

Herve Temime, Banier's lawyer, said there was nothing fraudulent about his client's employment agreement. "These contracts are perfectly above board and have been executed under normal conditions," Temime told Reuters.

(Additional reporting by John Irish; editing by John Irish, Mark Trevelyan and David Stamp)

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