Swiss bank account affair - the budget minister's lies

FrenchFrench budget minister Jérôme Cahuzac, accused of having an undisclosed Swiss bank account, has not told the truth to the highest offices of state – the president and the prime minister – nor to Parliament, Mediapart can reveal.

For Mediapart can today disclose that the person who inadvertently recorded the conversation in which Cahuzac is heard discussing his account at UBS in Geneva has personally contacted the office of President François Hollande at the Elysée Palace to confirm the recording’s authenticity. Mediapart also reveals the identity of the man, a barrister and former mayor called Michel Gonelle.

Moreover, in emails seen by Mediapart, Jérôme Cahuzac does not deny the authenticity of the recording, even though he has recently claimed that the person on the tape is “not me”. In the emails Cahuzac even suggests that his comments on the tape were perhaps “a bad joke taken out of context”.

In another development it appears as if the tax authorities in Paris are carrying out detailed checks on the minister's capital assets. His declarations on his tax form in relation to wealth tax (Impôt sur la fortune or ISF in French) have thrown up some apparent discrepancies. These include an under-valuation of a flat in Paris, a misleading declaration concerning a parental loan and non-declaration of expensive watches. Fabrice Arfi investigates.

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Mediapart's revelations concerning the budget minister and his undeclared Swiss bank account have reached the highest levels of the state. On the morning of Saturday December 15th the deputy director of President François Hollande's office Alain Zabulon received a phone call. It was from an old acquaintance called Michel Gonelle, a barrister and former centre-right UMP mayor of Villeneuve-sur-Lot in south-west France. Zabulon had once worked as sub-prefect in the département or county of Lot-et-Garonne where Villeneuve-sur-Lot is situated, and knew Gonelle from that time.

Gonelle told his old acquaintance everything; how he was the person who had inadvertently recorded on his voicemail the conversation in late 2000 between Cahuzac and his wealth manager Hervé Dreyfus, in which the former is heard talking about his Swiss bank account. “What bothers me is that I still have an account open with UBS [...] It pisses me off to have an account open there,” says Cahuzac on the recording, before adding in an ironic tone: “UBS is not necessarily the most hidden of banks.”

Gonelle, who lost his position as mayor to Cahuzac in elections in March 2001 just a few months after the recording was made, told Zabulon that having recorded the conversation by chance, he had kept it for many years without knowing what to do with it. Several years ago he had passed a copy of the tape on to a senior judge he knew, but nothing had come of it. Now, finally, he had decided to go to the top – the presidency – and tell the truth.

The barrister told Zabulon that he swore on his “honour” that the recording was genuine and that the identity of the person talking was indeed Jérôme Cahuzac, who at the time was unaware he had been taped. Gonelle told the senior presidential official that he was prepared to write a handwritten and signed letter to that effect to the president in person.

When contacted by Mediapart Gonelle, who had previously denied being the holder of the recording, to protect his family from the inevitable media “storm” that would ensue, said simply: “I don't deny it.” But he declined to say any more. The Elysée has not responded to Mediapart's questions on the subject.

Emails in which the minister does not dispute the recording

Up until this week the budget minister Jérome Cahuzac had not denied the authenticity of the recording of his conversation, which was put online by Mediapart on Wednesday December 5th. Then on Wednesday, December 19th, the minister had an informal meeting with journalists at public broadcaster France Inter at which he sought to rubbish the tape. “Out of the 3 minutes 40 seconds recording there are four or five seconds that could perhaps be me – though as it happens it is not me,” he told the journalists. “If Mediapart had an expert's report concerning [the authenticity of] my voice, do you not think they'd have produced it?” In addition he stated that his brother Antoine Cahuzac, the former boss of HSBC bank in France, had confirmed it was not his voice on the tape.

Yet on the question of whether he was talking explicitly about a set-up or if he was envisaging a complaint for falsehood, the minister remained silent. In the same way neither of the two defamation suits Cahuzac has filed against Mediapart – one with the prosecution authorities, the other with an examining magistrate, both on the same set of facts – targets the Mediapart article revealing the recording.

It is also worth noting that if the minister is certain that his Swiss bank account never existed and that therefore he could never have spoken about it, he would hardly need the evidence of his brother to be sure that the voice on the recording is not his.

The truth is indeed rather different; Mediapart is telling the truth and the minister knows it. In emails that we have knowledge of, the minister never denies the authenticity of the tape, quite the contrary. Thus, in a exchange of emails with an old friend dated December 5th, just after the publication of our first story which did not talk explicitly about a recording but stated that a conversation involving Cahuzac could be “partly traced”, the minister tells his correspondent: “The [conversation that can be partly traced] is an audio tape recorded by a caller after having failed to hang up properly [on a call] to my mobile!”

This friend, apparently convinced by the truth of this, asks Cahuzac if it was a “set-up”. The minister replies evasively: “Or a bad joke taken out of context”. Cahuzac then adds: “I obviously have no memory of it.” His correspondent replies that it is “annoying”. To which the minister responds: “Annoying, really?” The friend replies: “Annoying because it requires explanations, [which are] bound to be confused.”

These exchanges took place before Mediapart revealed the existence of the recording in which Jérôme Cahuzac talks to his wealth manager about his embarrassment over the account. There has still been no legal complaint lodged against the story citing this recording.

Since the existence of the recording was revealed the budget minister's office has launched an all-out effort to find out who could have kept it or heard it over the years. On December 11th one of the minister's advisers Yannick Lemarchand alerted his hierarchy that a former journalist Gaëtan H. claimed to have heard the recording in 2005, still without questioning its authenticity at any time.

Though publicly Jérôme Cahuzac says he remains very calm since the affair broke, information received by Mediapart shows that, on the contrary, several branches of the state have been pressed into service to trace Mediapart's sources. So, for example, on December 11th the budget minister's chief of staff Marie-Helène Valente said that she had been informed by sources from the country's prefecture - which is under the jurisdiction of the Ministry of the Interior – about a telephone conversation between Edwy Plenel, Mediapart's Editor-in-Chief, and a - real or alleged – source of the media outlet. The chief of staff said she was waiting for “a copy of the official report” from the police. And she added that one had to be “cautious with received information ”.

When contacted by Mediapart Marie-Helène Valente simply said that she had a “normal relationship with the services of the Ministry of the Interior”, refusing to confirm or deny our information.

Mediapart has also been able to get confirmation that, contrary to what the minister's “entourage” claimed in the Journal du Dimanche on December 16th, the minister's wealth manager Hervé Dreyfus, to whom Cahuzac was speaking in the recorded conversation, was never a customer at his hair transplant clinic. He was in charge of managing Cahuzac's assets – especially hidden ones. The two were introduced by Cahuzac's brother Antoine in the early 1990s.

The tax authorities investigating their own minister

As budget minister Jérôme Cahuzac is already caught in a clear conflict of interests because of his links to UBS, a bank being investigated by a French examining magistrate.

He now finds himself confronted with another uncomfortable situation; that of being a serving budget minister who is the subject of exhaustive checks by his own administration regarding his personal wealth. According to information received by Mediapart the Direction regionale des finances publiques de Paris-Sud - the south Paris branch of the tax gathering authority the General Directorate of Public Finances  – has for several days been investigating the minister's wealth tax declarations. They apparently show numerous discrepancies for the years 2010, 2011 and 2012.

Among the main concerns of the tax authorities is the under-valuation by at least 10% of the apartment on Paris's avenue de Breteuil bought by Cahuzac and his wife in October 1994 for 6.2 million francs (around 945,000 euros). This flat, located in one of the capital's most beautiful districts, close to Les Invalides, was valued by Cahuzac for wealth tax purposes at around 9,000 euros a square metre for the last three years. This is too little, according to the tax authorities.

Elsewhere there seems to be a problem over a parental loan of 1,500,000 francs (228,000 euros) which helped in the purchase of the flat in avenue de Breteuil. The tax inspectors have discovered that the minister continued to include this loan in his wealth tax declaration until 2012, though it does not appear in the tax declaration of his late father's estate. The loan was in fact supposed to have been paid off in 2001. Continuing to declare it would have reduced, through false means, the amount of wealth tax owed by Cahuzac.

The tax authorities are equally surprised that the minister has not included in his wealth tax declaration several luxury watches worth 100,000 euros, which were apparently stolen during a burglary at the start of October, according to Le Parisien. Members of the minister's entourage said that the objects stolen were above all of “sentimental value”. The tax authorities now want to clear the matter up.

Finally the local tax authorities are looking to obtain information on the financing of another apartment, also in avenue de Breteuil, bought in 2011 for 400,000 euros, of which 280,000 euros was covered by a bank loan. The tax authorities want to know about the source of the remaining 120,000 euros.

In brief, the current budget minister has locked himself into a denial of the truth which puts him, and the government of prime minister Jean-Marc Ayrault with him, in an untenable situation. He has not stopped lying, on big issues as well as on details. For example about his capital wealth, as the in-depth checks currently being carried out by his own tax department bear witness. And about his wealth manager Hervé Dreyfus, who was characterised simply as a customer at his clinic, when that is false.

And behind the minister's apparent serenity in the face of the stories from Mediapart, who have been portrayed as his “slanderers”, the apparatus of the state has been busy, notably the police who have been called into service to find our sources, identify them and neutralise them.

Above all, the budget minister, the head of the tax authorities, denies having had an undeclared Swiss bank account, while at the same time not being able to dispute a recording made in 2000 which is evidence of it in his own words; and even as the person who possesses the recording is today willing to vouch publicly for its authenticity. Jérôme Cahuzac denied it on Wednesday December 5th in front of Members of Parliament at the National Assembly even though on the very same day, in email correspondence with people close to him, he did not challenge the authenticity of the 2000 recording that is evidence of it. Moreover, it was a recording that up to that point had not been made public by Mediapart.

So can Jérôme Cahuzac continue to deny it even though the main witness to this conversation, the person who has the recording, has revealed himself to the President of the Republic, testifying to its authenticity and prepared to say so publicly? Is it still possible that France's finances, its revenue and expenditure, should be under the responsibility of a man suspected of having held an illicit account in Switzerland destined to receive hidden income, and to have concealed from the tax authorities a not insignificant part of his income?

These questions are not just posed to the budget minister himself, but to the government, prime minister and president of the Republic.

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English version by Michael Streeter