A former minister who was the face of France’s fight against tax evasion has gone on trial for fraud, accused of hiding money in tax havens around the world.
Jerome Cahuzac is facing the prospect of prison in a trial alongside his ex-wife and others with whom he had financial dealings.
President Francois Hollande’s one-time budget minister is accused of financing a lavish lifestyle by fraudulently concealing €687,000 of income from French tax authorities in 2009-2012 and laundering money in 2003-13 through foreign bank accounts based in tax havens including Switzerland, Panama, the Seychelles and Singapore.
The 63-year-old, once a rising star in French politics, triggered the first political scandal under Mr Hollande’s administration. He faces up to seven years in prison and a €1m fine if he is convicted of tax fraud.
The trial’s opening day attracted demonstrators who arrived at the courthouse carrying nearly 200 chairs they say they took from banks they accuse of participating in tax evasion.
Cahuzac’s lawyers used the first hearing to ask the court to postpone the trial, arguing a defendant should not be under both a criminal and a tax procedure at the same time.
The court will rule on the issue on Wednesday morning. If it accepts Cahuzac’s argument, the trial could be postponed for months.
After strongly denying any fraud for months and publicly lying to parliament, on television, to the French people and to his government colleagues, Cahuzac eventually admitted his wrongdoing in a statement in April 2013, saying he had been “trapped in a lying spiral” and that he was “devastated by remorse”.
Also on trial are his former wife, a banker, a legal adviser, and Reyl, a respectable but little-known Swiss bank accused of tax fraud and/or money laundering.
For his transactions with Reyl, Cahuzac used a codename, Birdie, in a nod to his passion for golf.
His ex-wife, Patricia Menard, a 60-year-old dermatologist, is accused of hiding €2.5m from French tax authorities until 2013 and laundering money in the British tax haven of the Isle of Man and in Switzerland, allowing her to buy two London apartments.
Menard paid more than €2m in back taxes to French tax authorities last year.
Though Menard and Cahuzac divorced in November, they shared a kiss when they met inside the courtroom.
Before being appointed budget minister in the first Hollande government in May 2012, Cahuzac was the leading tax specialist for the Socialist Party.
When press reports first revealed the scandal in December 2012, Cahuzac was sponsoring a bill to reinforce the fight against tax evasion and fraud.
Considered an ambitious, self-assured and talented politician, he was forced to quit in March 2013 after only 10 months, and eventually to end his political career after being fired from the Socialist Party the following month.
Known for his love of luxury watches, cigars and expensive vacations, Cahuzac built his wealth on his professional activities as a plastic surgeon in the hair transplantation clinic he operated with his ex-wife and as a consultant for big pharmaceutical laboratories.
The scandal damaged Mr Hollande’s approval rating, which took a 13-point dive in the first quarter of 2013. It also increased the public’s demand for probity and transparency by politicians.