President Nicolas Sarkozy is under increasing pressure to explain how he financed his purchase of a luxurious apartment on an islet on the River Seine, after information obtained by Mediapart now irrefutably confirms he did not, contrary to his claims, receive a loan worth 475,000 euros for the acquisition from the French parliament’s financial services.
In a written reply to questions submitted to it by Mediapart, the French parliament’s financial and administrative commission has said the loan granted by the National Assembly (lower house) to Sarkozy in 1997 for the purchase of his apartment on the île de la Jatte amounted to 1.68 million francs (equivalent to 257 000 euros). The purchase was made in francs, before France adopted the euro in 2002.
Sarkozy has publicly stated that the National Assembly leant him more than 3 million francs (475,000 euros).
In a declaration to the French Constitutional Council (Conseil constitutionnel), required of every candidate running in this year’s presidential elections and which was published on March 24th this year in the Journal officiel, the country’s gazette of official and legal record, the French president attested that his personal fortune amounted to 2.7 million euros.
A large part of Sarkozy’s wealth comes from the proceeds of the sale, before his election, of the 216-square metre, duplex apartment on the île de la Jatte, an islet of plush buildings and greenery situated in the upmarket suburb of Neuilly, west of Paris, where he served as mayor from 1983 until 2002.
The apartment, which he bought for 5.4 million francs (823,000 euros) from a property development company in 1997 with his then wife Cécilia, was sold for 1,933,000 euros in 2006. The property development company, Groupe Lasserre, built the apartment complex and was one of several who were sold land on the island belonging to the municipal authorities of Neuilly, reportedly below the market price.
Sarkozy was at the time both mayor and a Member of Parliament for Neuilly, an exclusive and expensive Paris suburb that is home to many of France’s wealthiest people, including L’Oréal heiress Liliane Bettencourt. In March 2007, investigative weekly Le Canard enchaîné reported that the 5.4-million franc purchase price for the Sarkozy’s apartment was between 12% and 35% below that of other sales during the same period of apartments in the same building, built and sold by Groupe Lasserre. Sarkozy has denied paying less than the market price.
It also reported that Lasserre, which it described as “Neuilly town hall’s favourite developer”, built three buildings on the island and benefitted from several other land purchases in Neuilly.
In an interview with weekly news magazine L’Express, published on January 24th 2007, Sarkozy said the apartment was bought for 5.4 million francs (equivalent to 823, 224 euros), financed – beyond his downpayment of a guarantee of purchase of 270,000 francs - by two loans. One of these, he said, came from the Société Générale bank and was worth 1.6 million francs, while the other, for more than 3 million francs, was granted by a financial loan service provided to MPs by the French parliament.
As Mediapart has previously revealed, the loan limits set by National Assembly were well below 3 million francs (475,000 euros). The loan service, which gave MPs preferential interest rates, was ended in January 2010, when the ceiling was set at 288, 147 euros. By then it was well above the ceiling of 196,000 euros (1.183 million francs) imposed for 1997, when Sarkozy purchased the apartment.
The confirmation from the National Assembly that the loan was in fact 1.68 million francs (equivalent to 257 000 euros), leaves a mystery over how Sarkozy raised the remaining sum of almost 2 million francs (304,000 euros) needed to complete the deal.
Mediapart has on several occasions attempted, in vain, to question the French president, and his communications director Franck Louvier, about the financing of his purchase. On March 29th, Mediapart political affairs reporter Valentine Oberti, camera in hand, attempted to question Sarkozy about the issue while he was on an election campaign walkabout in the Gard département (county) in southern France. The president’s reaction was to place a hand on the camera lens, before Oberti was distanced from him by his security team.
On April 5th, Mediapart again questioned the French president(see video immediately below) about the loan during an election campaign press conference called to detail his manifesto before an assembly of French and foreign journalists. Mediapart reporter Michaël Hajdenberg asked him “how did you finance this apartment and where did the 3 million francs come from?”
After using irony to thank Hajdenberg for “this precise question about my programme for the five coming years”, Sarkozy replied: “I am certainly a political figure who is one of the most controlled regarding my wealth, before, during and afterwards [sic] and the National Assembly loans [sic] that I benefited from, it was between 1995 and 1997 […] I sold this apartment, it was the subject of great debate in 2006, in 2008, there were a load of investigations and they never found anything. But I recognise here Mediapart’s obsession about me, about my wealth, rather than my ideas. That’s democracy, there’s nothing you can do about it.”
After Hajdenberg pressed him further, the French president said: “Monsieur, go and ask the National Assembly.”
In his response, Sarkozy claimed he had taken out more than one loan from the National Assembly, who Mediapart contacted in writing by email later that same day. The Assembly’s president (speaker), Bernard Accoyer, replied in personthe following day, April 6th, also by email (see immediately below). He detailed the conditions in place in 1997 to obtain such a loan, and stated quite clearly that the conditions for the loan granted to Nicolas Sarkozy did not waiver from rules in place. Under those rules, Sarkozy could not have obtained a loan of 3 million francs.
Enlargement : Illustration 2
In its subsequent reply to further questions from Mediapart, the French parliament’s financial and administrative commission contradicted the French president’s response on April 5th in which he claimed to have received several loans from the National Assembly. The commission stated that Sarkozy obtained just one loan – that of 1.68 million francs (equivalent to 257, 000 euros) – over the period 1995 to 1997. Indeed, there is nothing surprising in this, given that MPs could not take out successive loans for the same property purchase.
He could, however, also have been entitled to what is called a “treasury loan”, which is granted for the purchase of, for example, a car or office equipment. But this would have been limited to a maximum 100,000 francs (15,000 euros).
How, or from who, came the missing 1.85M francs?
According to the act of sale for the Sarkozy couple’s purchase of the apartment, they paid 5.4 million francs. The details of the sale agreement, filed with the registry office of Nanterre, a Paris suburb close to the île de la Jatte, record that Nicolas Sarkozy provided a downpayment, in the form of a guarantee of purchase, of 270,000 francs. He also had a standard bank loan, from the Société Générale bank, of 1.6 million francs. Although not mentioned in the act of sale, Mediapart has now learnt, as detailed above, that he also secured a loan of 1.68 million francs from the National Assembly. The total of those three sums is 3.55 million francs, which leaves 1.85 million francs (282,000 euros) unaccounted for.
The statements received by Mediapart from National Assembly president Bernard Accoyer and that of the Assembly’s administrative and financial commission both clearly contradict Sarkozy’s claim that he was lent 3 million francs by the parliamentary financial services. The president must therefore not only explain why he has maintained his insistence since 2007 that he received 3 million francs in a loan from the National Assembly, but also how he raised the unaccounted 1.85 million francs and from whom, or whether the developer, Groupe Lasserre, offered the sum.
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For more about the issues raised in this article, click on the links to Mediapart's investigations below:
Sarkozy's luxury apartment and the mystery 'loan' of 457,000 euros
Kuwaiti sheik's Swiss account reveals key cash clue to 'Karachi Affair'
The Sarkozy aide and his secretly-funded Colombian mansion
Exclusive: British witness in French funding scandal hits back at ‘protected’ arms dealer
Inside story: the Constitutional Council, Balladur and the row over his election funds
Karachi blast probe rapporteur demands truth from Constitutional Council
The arms dealer and his 'friendly' services for UMP leader Copé
Judges step up hunt for the phantom figure behind the Karachi Affair
French IT group Bull horned by libyan internet espionage deal
French judge finds key evidence in illegal funding probe
British divorcee becomes key witness in French political funding scandal
Net closes in on French presidency after funding 'scam' arrests
Sarkozy campaign treasurer under investigation for illegal funding, influence peddling
L'Oréal heiress ordered to pay 77.7 million euros after tax scam probe
Behind the bettencourt affair: the battle for L'Oréal
A scandal too far: Bettencourt magistrate is disowned
French prosecutor in Bettencourt affair illegally spied journalists' phone calls
The eerie plot penned by L'Oréal family scandal dandy in 1971
Dinners, cash and Sarkozy: what Bettencourt's accountant told Mediapart
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English version: Graham Tearse