The trial on charges of tax evasion and money laundering of disgraced former French budget minister Jérôme Cahuzac and his former wife Patricia ended this week, with the verdicts and sentencing postponed until December 8th, which will mark four years, almost to the day, since Mediapart published its first article revealing the secret foreign bank account of the man then in charge of a crackdown on tax fraud.
The prosecutors from the financial crime unit (PNF) of the French public prosecution services, created three years ago as a direct result of the Cahuzac scandal, called for the former minister, 64, to be handed a three-year prison term, and for his wife to be given a two-year prison term.
Enlargement : Illustration 1
The prosecutors also called for Geneva-based banker François Reyl, whose bank helped Cahuzac hide his money abroad, to be given an 18-month suspended prison sentence and a fine of 375,000 euros. They demanded that his bank, the Reyl Bank, be fined 1,875,000 euros and that Dubai-based French lawyer Philippe Houman, who helped manage the offshore structures through which Cahuzac’s hidden wealth transited, be given a suspended 18-month jail term.
Summing up, vice-prosecutor Jean-Marc Toublanc said of Cahuzac that “the hearings demonstrated it, he in fact proceeded over 20 years with dissimulations, hidden accounts, tax fraud and [financial] structures,” telling the judges that “your ruling will be essential for maintaining the cohesion of the country around its fundamental values”.
Toublanc and his colleague Éliane Houlette were scathing of Cahuzac who, said Houlette, had “debased all [his] skills in order to place them at the service of the lie, of deceit and the lure of gain”. The evidence collected in the case suggested that Cahuzac’s wife Patricia, 61, a dermatologist, had placed a greater sum than he in hidden accounts, estimated to total 2.7 million euros partly held in accounts on the Isle of Man and in Switzerland.
The couple met during their medical studies during the late 1970s. Jérôme Cahuzac trained as a cardiologist, entering active politics in the latter part of the 1980s in the then-socialist government’s health ministry. In the early 1990s he became a lobbyist for the pharmaceutical industry, the source of part of the sums he hid abroad, and became a partner of his wife Patricia in a hair transplant business. Cahuzac returned to active politics after his election as a Member of Parliament in 1997 for a constituency in south-west France, where he also became mayor of the town of Villeneuve-sur-Lot. He became a minister after the socialist victory in presidential and parliamentary elections in 2012.
It was on December 4th 2012 when Mediapart first revealed the evidence it had uncovered that then-budget minister Cahuzac, who in November 2012 announced a crackdown on tax evaders, had held a secret account with Swiss bank UBS for almost 20 years before it was transferred for added secrecy to Singapore. Cahuzac, who was at the time tipped for a promising career in François Hollande’s government, denied Mediapart’s report and filed a lawsuit against this site for defamation.
During the four months until, in April 2013, he finally confessed to holding the account, Mediapart was vilified by some politicians and even media commentators for the dogged persistence of its investigation (see our ‘A-Z of the Cahuzac affair’ here) . During that time, Cahuzac gave a statement before French parliament denying he held the account, as he also denied its existence in interviews with the French media (notably in this interview, in French, with BFMTV ).
Initially, no investigation was opened into Mediapart’s disclosures, which included a sound recording of Cahuzac discussing the account with an advisor at the end of 2000. After Mediapart’s editor-in-chief edwy Plenel personally contacted the public prosecutor’s office to demand an investigation be opened, a preliminary enquiry into the evidence produced by Mediapart was launched in January 2013, which led to the opening of a full-blown judicial probe in March. That forced the budget minister to step down, supposedly until he was proven innocent.
But on April 2nd, after first confessing to the two magistrates in charge of the judicial investigation, Cahuzac published a statement on his blog admitting he owned a secret foreign account, as detailed by Mediapart, “which I have been the beneficiary of for some 20 years”. He wrote that he had been trapped in a “spiral of lies” and begged the French public to forgive him.
'I did not lie to the president eye-to-eye'
Among the key questions raised by the case was whether President François Hollande was aware of the truth before Cahuzac’s public confession, and whether there had been an attempt to cover up the evidence.
During last Tuesday’s hearing, Cahuzac was asked by presiding judge Peimane Ghaleh Marzban why, on December 5th 2012, he told parliament very clearly that he did not have a secret foreign account. “I thought I could do it, and that I should do so,” he replied. “After the [weekly] cabinet meeting on December 5th, I had a 45-second conversation with the president, in the presence of the prime minister. To my great surprise, the president came towards me and said to me ‘What is this business?’ I wasn’t expecting that he would ask this question. I told him ‘It’s nothing, it’s rubbish’.”
It was not the first time that under questioning Cahuzac provided ambiguous answers which contained implications that led to even more questions.
“Why were you surprised?” asked Judge Ghaleh Marzban. “The journalist François Bazan wrote, on April 11th 2013, that ‘Jerôme Cahuzac [reportedly] lied to the president twice’,” answered Cahuzac. “If I saw him twice, then there was another. And that time [December 5th] was the second.”
“Can you be more precise Mr Cahuzac?” asked the judge.
“There was an earlier meeting, in private,” answered Cahuzac, “and private conversations with the president belong only to the president. As for me, I won’t say anything.”
“Should one understand that if you deny before parliament [the existence of the account] that there is a link to that conversation?” asked the judge.
“This link of causality is not the only one,” Cahuzac answered. “I accepted, and it’s my fault, to continue to exercise my responsibilities. The president did not ask me directly ‘have you an account, yes or no?’ But I did not lie to the president eye-to-eye, that’s not true. I came out of that conversation with the will to hold good at least through December, there are important [legislative] texts to defend. At any rate, the president never said to me ‘You are covered’. But I left that conversation with the certainty that I must continue to do what I have to do. I was never again talked to about this.”
Enlargement : Illustration 2
In sum, Cahuzac appeared to suggest that François Hollande new something about his hidden account, and pretended to be unaware of the subject when he spoke with Cahuzac in the presence of the prime minister Jean-Jacques Ayrault.
“François Hollande had immediately asked the question if there was, yes or no, an account,” said a statement by the French presidential office, the Elysée Palace, after it was contacted by Mediapart. “The question was closed. It was asked on each occasion that the subject was back in the spotlight. And, on each occasion, Jérôme Cahuzac insisted he was innocent. His legal strategy is obvious in the context of his trial. We have nothing to reproach ourselves for and one should not let oneself be swept away by the declarations of Mr Cahuzac.”
However, the attitude of the Elysée Palace and a section of the socialist government during the four months until Cahuzac’s resignation continue to raise questions three years on. Two key moments, between the end of 2012 and the beginning of 2013, demonstrated the hesitations and the blindness of the government, or its attempts to divert attention from the case. The first of these was on December 15th 2012. That morning, Michel Gonelle, a lawyer and former centre-right Member of Parliament for a constituency in the Lot-et-Garonne département (or county) in south-west France, where he was also a mayor and local rival of socialist Jérôme Cahuzac, made contact with the Elysée Palace to explain that he was the source of the recording of Cahuzac discussing his Swiss account in late 2000.
The recording was made by accident: shortly before, Cahuzac had made a phone call to tell Gonelle, then-mayor of Villeneuve-sur-Lot, that he had obtained the agreement of the then-socialist government interior minister, Daniel Vaillant, to make a special visit for the opening of a new police station in the region.
After hanging up, Cahuzac began a conversation in his office with his wealth advisor, Hervé Dreyfus. To all evidence unknowingly, he at some point activated the redial button on his phone. The call was picked up on the same voicemail machine and which recorded over some four minutes the conversation in which Cahuzac speaks openly with his advisor about his account with UBS.
Initially, after Mediapart first published on December 5th 2012 the transcript and audio copy of the conversation, Gonelle denied being the source and hid from what he called the media “storm”. But after soon deciding that he should come forward, he called up an old contact, Alain Zabulon, a former deputy prefect of the Lot-et-Garonne and who had become, in 2012, deputy director of the president’s cabinet.
Political funding claims
Gonelle told Zabulon how the recording came to be made, why he had kept it for so many years, and why he now wanted to explain the truth of the matter to Hollande. He also told Zabulon that he had, several years earlier, passed a copy to former magistrate Jean-Louis Bruguière, who in 2007 left the judiciary after unsuccessfully standing against Jérôme Cahuzac in parliamentary elections in the Lot-et-Garonne (Bruguière subsequently claimed he had taken the matter no further). Gonelle asked Zabulon for a meeting and that he recount to Hollande the facts behind the secret conversation revealed by Mediapart.
After Cahuzac’s confession in April 2013, the French parliament mounted a commission of enquiry into the affair. Zabulon appeared as a witness, and was asked why, in December 2012, he took the matter no further. “Unfortunately I didn’t have the time, given that I was awaited at the presidency where we were to give a hand in the last preparations for the Christmas tree, an important event in life at the Elysée,” he told the commission of MPs.
On Wednesday January 16th 2013 another key event occurred, which was later revealed by journalist Charlotte Chaffanjon of French weekly magazine Le Point in a book about the Cahuzac affair published in July 2013 (Jérôme Cahuzac, les yeux dans les yeux). After the weekly government meeting of ministers and the president, François Hollande, prime minister Jean-Marc Ayrault, economy minister Pierre Moscovici and budget minister Jérôme Cahuzac met together at the Elysée Palace. Hollande and Ayrault called upon Moscovici to launch an administrative investigation by his ministry into the accusations concerning Cahuzac’s secret account. It was to seek a response from the Swiss authorities.
But the questions the investigation asked of the Swiss were more diversionary than incisive, and the answers concluded that the Cahuzac bank account did not exist. The result was announced in a vast communications operation that attempted to prove the budget minister’s denials had been vindicated.
But when the administrative enquiry was launched, the Paris public prosecutor’s office had already opened its own preliminary investigation into the affair, and the government did not tell chief Paris public prosecutor François Molins about the administrative enquiry.
During the hearings of the parliamentary commission of enquiry into the affair, during the summer of 2013, Molins appeared as a witness and was asked whether he viewed the existence of an administrative investigation, held in parallel to his own, as being “normal” procedure. “Clearly not,” he replied. “I have the weakness to think that, as of the moment that there is a criminal context […] when a judicial authority is put in charge of leading investigations […] it should have the monopoly over the action taken and nothing should be done without the judicial authority being notified.”
At the beginning of Cahuzac’s trial, which opened on September 5th and ended last Thursday, he claimed that he first opened the bank account in Switzerland to be used as a source of secret political funds for Michel Rocard, a leading Socialist Party figure and former prime minister (1988-1991) when Cahuzac was an advisor to the health ministry. Rocard died in July this year.
“Secret financing was the rule before 1988, and mixed financing from 1988 to 1995, all the parties did it, especially [those] outside the main [political] currents,” Cahuzac told the court. The one-time lobbyist for the pharmaceutical industry said he was asked to seek benefactors among drugs firms for Rocard’s political movement within the Socialist Party. Asked by the presiding judge who had approached him to open the account, Cahuzac replied: “I won’t say. It was 25 years ago. I don’t want people to be bothered by that.”
Cahuzac said he never spoke about the cash funding to Rocard, who he said was unaware of the matter. Some ten cash transfers paid into the account between 1992 and 1993 were, according to Cahuzac, all intended for Rocard’s political war chest, as were the cash sums withdrawn. He claimed that after the socialist debacle in parliamentary elections in 1993, and in European elections in 1994, which effectively put an end to Rocard’s hopes to bid for the presidency, he asked what he was to do with the sum that remained on the account. “I was told not to do anything and to wait,” he told the court. “Which is what I did.”
It was the first time that Cahuzac had made the claims about Rocard, and they were given little credence by the court. Prime Minister Manuel Valls, who was once an advisor to Rocard, reacted to Cahuzac’s claims by saying he was “disgusted” and “a little saddened” by them. The man who helped Cahuzac open the account in Switzerland, Philippe Péninque, asked by Mediapart about Cahuzac’s comments, said he had “never heard about that”.
Addressing the court at the end of the trial on Thursday, one of Jérôme Cahuzac’s two lawyers, Jean-Alain Michel, returned to his client’s claims that his account was to serve Rocard. “The several men concerned by the old financing are still alive and in the corridors of power,” he alleged.
Meanwhile, in her summing up on Wednesday, public prosecutor Éliane Houlette reprimanded Cahuzac for the damage caused to France by the scandal of his secret account. “What cannot be repaired is the damage to the image and reputation of this country, which was the laughing stock of Europe, appearing to be corrupt,” she told Cahuzac. “By your [ministerial] office, you have caused considerable damage to France. Citizens have the need to believe in the grandeur of their country. You have reduced the honour of this country. You have sacrificed all the principles, through seeking personal ambition and by the lure of gain.”
Shortly after, Houlette concluded by calling for Cahuzac to be sentenced to three years in prison, and barred from elected office for five years. As the courtroom emptied, Cahuzac sat for several minutes in silence, gazing ahead. The verdicts and sentencing will be announced by the court on December 8th.
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- This is an abridged compilation of selected articles from Mediapart's coverage of the trial in French, and which can be found here, here and here.
English version by Graham Tearse