France's Sarkozy probed over campaign funding in new blow

[PARIS] Former French president Nicolas Sarkozy was placed under formal investigation Tuesday over alleged illegal campaign funding, in a new blow to his hopes of getting back into the Elysee Palace.

Sarkozy was questioned during the day over allegations of false accounting that allowed him to greatly exceed spending limits in 2012.

The head of conservative The Republicans party is being formally probed over "illegal election campaign funding by having, as a candidate, exceeded the legal limit for electoral expenses," said a statement by Paris prosecutor Francois Molins.

He was also designated as an "assisted witness" in connection with "accusations of using false documents, fraud and breach of trust," it added.

The case against Sarkozy has hinged on the activity of PR firm Bygmalion, which organised some of Sarkozy's appearances during his failed election campaign four years ago and is accused of using a vast system of false accounting.

Bygmalion allegedly charged 18.5 million euros (S$29 million) to Sarkozy's party - then called the UMP, but since renamed The Republicans - instead of billing the president's re-election campaign.

As a result, the campaign was able to greatly exceed a spending limit of 22.5 million euros, according to allegations.

Sarkozy's lawyer Thierry Herzog sought to downplay Tuesday's announcement, expressing his "satisfaction" that the ex-president was not placed under formal investigation over the allegations of using false documents, fraud and breach of trust.

Sarkozy, 61, who led France from 2007 before losing to Socialist Francois Hollande in 2012, has always denied any knowledge of the false accounting.

Shortly before the prosecutors' announcement, Sarkozy ally and former interior minister Brice Hortefeux told French television that the ex-president's "honesty and probity (had) not once been called into question." Bygmalion executives acknowledged the existence of fraud and false billing, but nobody has directly accused Sarkozy of having been aware or taken decisions about it.

"In my opinion it is impossible that he would have been told," Jerome Lavrilleux, deputy chief of Sarkozy's 2012 campaign has said.

Sarkozy announced he was retiring from politics after the 2012 election but made a comeback just two years later, returning to lead The Republicans and lining himself up for party primaries this autumn in a bid to contest the presidential election in May 2017.

But his path back to power has been far rockier than expected.

Sarkozy is embroiled in several corruption scandals, and has failed to excite much popular support. He trails centre-right rival Alain Juppe by a considerable margin in opinion polls.

Sarkozy's ambitions have not been helped by a series of scandals, including allegations that he used money from late Libyan dictator Moamer Kadhafi to fund his 2007 campaign, that he was involved in kickbacks from a Pakistani arms deal in the 1990s, and that he tried to bribe a magistrate to get inside information on yet another corruption case in which he was implicated.

The Bygmalion case could prove the most damaging, especially after the investigation found that Sarkozy asked for more campaign events in mid-March 2012, around two months before the vote.

His campaign director, Guillaume Lambert, has told police he warned Sarkozy of the risk of breaching financing limits.

Questioned by police in September 2015, the former president said he did not remember the warning, and described the controversy as a "farce", putting the responsibility squarely on Bygmalion and the UMP.

Since then, however, the investigation has widened beyond Bygmalion and is looking into a further 13.5 million euros in campaign spending by the UMP, of which only 3.0 million was declared at the time.

A total of 13 people have been charged from Bygmalion and the UMP with fraud, breach of trust or illegal campaign financing.

AFP