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Offshore account dispute snarls top French taxman
Thursday - 1/10/2013, 8:47am EST
PARIS (AP) - The man at the forefront of France's fight against fiscal fraud is now one of those being investigated.
Budget Minister Jerome Cahuzac has spent months singling out corporate multinational tax dodgers, citizens who live abroad to avoid taxes and those within France who stash money in overseas accounts. Now he is ensnared in just the sort of investigation he thought would help turn France's finances around, as prosecutors take a close look at an online journal's allegations that he transferred money from a Swiss account into one in Singapore.
Cahuzac, a former plastic surgeon who specialized in hair plugs, has countered with a defamation complaint against the online site Mediapart. So far his boss _ President Francois Hollande, who famously said he does not care for rich people _ has backed the man he appointed to keep France's finances in line.
It was Cahuzac who tallied just how much potential revenue France lost last week when the country's highest court threw out Hollande's plan to tax the wealthy at 75 percent. Cahuzac was the one standing before the cameras, promising to battle fiscal fraud and singling out "a certain search engine" in legal negotiations to regularize its tax situation. And he was the engineer of a 2012 campaign manifesto affirming that that "taxes are a cornerstone of our social pact."
In a statement Tuesday on his website, Cahuzac welcomed the preliminary investigation into his own finances.
It's a step, he wrote, that would show his "complete innocence of the absurd accusations."
Jean-Luc Melenchon, a leader of France's far-left party who is no fan of Cahuzac, said the budget minister should nonetheless keep his position for the time being.
"Don't judge him by his arrogant airs, his lordly pretensions or his social liberal insolence," Melenchon said.
France's economy minister and Cahuzac's superior, Pierre Moscovici, went even further on Wednesday, telling Europe 1 "we spent 2012 together and we'll spend 2013 together."
The story _ notably the back-and-forth between Mediapart and the budget minister _is getting increasing attention in France, especially as the country's economy continues to weaken.
Mediapart has reported that Cahuzac had a secret UBS bank account until 2010, when the funds were transferred to Singapore. The site maintains a separate section devoted solely to the budget minister despite his defamation lawsuit. It includes a recording, which the site says is Cahuzac's voice, of a man talking about his secret account.
Cahuzac's lawyer, Gilles August, said on Europe-1 radio Thursday that the accusations are "based on nothing but air" and that the minister has no plans to resign over them. He said French and Swiss lawyers are seeking their own information from UBS in the case.
Governments across Europe have cracked down on the practice of using secret accounts to avoid taxes. Switzerland, for example, has begun helping out foreign tax offices, including revealing the identities of account holders.
In Greece, prosecutors of the nearly bankrupt nation recently asked for a new list of Greeks with Swiss bank accounts after fearing that the contents of an earlier list had been altered. Three relatives of an ex-minister were missing from the original list, court authorities have said.
The French government has also made a priority of going after wealthy citizens that the Socialist government accuses of shirking their fair share. Hollande's government has promised to reintroduce the 75 percent tax within weeks, despite the threat of losing two of the country's most prominent figures.
Gerard Depardieu, the French actor, took Russian citizenship this week. And Bernard Arnault, the head of luxury goods conglomerate LVMH, best known as the house of Louis Vuitton, has decamped to neighboring Belgium, which has lower taxes.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)