'Everyone's in the merde': the secret cash funding scandal shaking down the house Sarkozy built

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After a week of startling developments, the French presidency was this weekend engulfed by yet more revelations over the illegal political party funding scandal dubbed as Karachi-gate, involving secret cash payments siphoned off from French weapons sales abroad, notably to Pakistan, which implicates both the French president and his close political entourage. Two of Nicolas Sarkozy's longstanding political servitors, Nicolas Bazire and Thierry Gaubert (photo), are now under official investigation over their alleged role in the affair, which includes the transport to Paris of suitcases stuffed with cash from a Swiss bank vault. Meanwhile, presidential advisor Brice Hortefeux, one of Sarkozy's closest friends, has been caught by phone taps informing Gaubert, while he was in police custody, of damaging statements made by his estranged wife, Princess Hélène of Yugoslavia. In this report on the latest developments in the case, Mediapart exclusively reveals excerpts of what Gaubert told the police, along with the official transcript of a phone conversation in which his daughter speaks of Sarkozy, Hortefeux and other senior officials as being "in the shit". Fabrice Arfi and Karl Laske report.

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