Sarkozy Denies Secret Donations From Heiress A family feud, a disgruntled butler and a former bookkeeper are the ingredients for an unfolding political scandal in France. President Sarkozy's government has been shaken by allegations of political cash handouts by France's richest woman. According to accusations, the 87-year-old heiress to the L'Oreal fortune, secretly funded Sarkozy's election campaign.
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Sarkozy Denies Secret Donations From Heiress

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Sarkozy Denies Secret Donations From Heiress

Sarkozy Denies Secret Donations From Heiress

Sarkozy Denies Secret Donations From Heiress

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A family feud, a disgruntled butler and a former bookkeeper are the ingredients for an unfolding political scandal in France. President Sarkozy's government has been shaken by allegations of political cash handouts by France's richest woman. According to accusations, the 87-year-old heiress to the L'Oreal fortune, secretly funded Sarkozy's election campaign.

MARY LOUISE KELLY, Host:

Good morning.

ELEANOR BEARDSLEY: Good morning.

LOUISE KELLY: Eleanor, start by telling us about the key player, here. This is the billionaire heiress, 87-year-old Liliane Bettencourt.

BEARDSLEY: That's right. Liliane Bettencourt is, quite simply, the richest woman in France. She's the heiress to the L'Oreal cosmetics fortune. Her father founded the company, so she's very rich. And it simply started with - between her and her daughter. Liliane Bettencourt had a confidante for years. He's a society photographer. And for years, she's been bestowing paintings, artwork, and cash on him - you know, giving him gifts.

LOUISE KELLY: This man is taking advantage of my mother's mental frailty, and I want it to stop. And I want a court order. I want her finances under my protection. So, that's how it started. There was a criminal trial going on in June. So it all started there.

LOUISE KELLY: And then how did it escalate, then, from family feud into this huge political scandal that's shaking the government of France?

BEARDSLEY: Unidentified Man: (French spoken) Nicolas Sarkozy.

(SOUNDBITE OF RECORDED CONVERSATION)

LILIANE BETTENCOURT: (French spoken)

BEARDSLEY: And he's telling her that she needs to take care of Sarkozy, and also the budget minister, because he says he handles the taxes. And it turns out that Liliane Bettencourt is employing the wife of the budget minister in her wealth management firm. So people are screaming: Hold on. Maybe the budget minister is turning a blind eye to tax evasion because his wife is being employed by the millionaire.

LOUISE KELLY: Okay. So, we've got this very tangled web, this great cast of characters. How does President Sarkozy actually get dragged into this whole affair?

BEARDSLEY: Now, in France, that's illegal. The maximum you can give is $10,000, and only 200 in cash. So now there are accusations that Sarkozy had illegal funding of his campaign by France's richest woman.

LOUISE KELLY: Okay. And we should stress, all these are allegations at this point. What is President Sarkozy saying?

BEARDSLEY: Well, Sarkozy completely denies it, and he says he never did anything illegal. But you can tell the whole affair is having a real - taking a real toll on him. He looks beaten down. The press keeps talking about how beaten down he is. And he's totally lost control of his image. I mean, people now are having the feeling that he's corrupt.

LOUISE KELLY: Eleanor, just briefly, is Sarkozy likely to survive this scandal?

BEARDSLEY: Well, it looks bad, because this former budget minister is now labor minister, in charge of his most important reform: retirement. And now it looks like Sarkozy is telling the common man, the small man: You need to work two more years, but I'm hobnobbing with millionaires and getting envelopes of cash. So it really doesn't look good for either his reform, or him.

LOUISE KELLY: All right. Sounds like you're going to have a very interesting summer in Paris. Thank you, Eleanor.

BEARDSLEY: Thank you.

LOUISE KELLY: That's Eleanor Beardsley, reporting for us from Paris.

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