Sarkozy denies receiving secret campaign cash

French President Nicolas Sarkozy today denied allegations that his 2007 presidential campaign received €150,000 in secret cash donations from France's richest woman.

For weeks, Sarkozy and his government have defended Labour Minister Eric Woerth, who has been linked to suggestions of tax evasion involving L'Oreal heiress Liliane Bettencourt.

The scandal, which has already destabilised Mr Sarkozy's conservative government, took a new twist today.

Ms Bettencourt's former accountant told a French news website that the heiress and her late husband offered Mr Woerth €150,000 in cash for Mr Sarkozy's 2007 campaign, well above the legal limit.

Mr Woerth is still treasurer for Mr Sarkozy's conservative UMP party.

Mr Woerth said he was "outraged" by the claim and said he has "never received the slightest euro that wasn't legal".

The accountant, who was identified only as Claire T. by the Mediapart news website, also claimed the Bettencourts used to invite Mr Sarkozy for meals and hand him cash-stuffed envelopes when he was mayor of the suburb of Neuilly-sur-Seine from 1983 to 2002.

Mediapart said the accountant, who no longer works for Ms Bettencourt, has been speaking to police investigators.

The allegations sparked a stormy session of parliament, with opposition Socialists at the National Assembly demanding answers, then walking out.

Mr Sarkozy, visiting a hospital in the Paris suburbs, denounced the allegations as "libel that aims only to smear, without the slightest basis in reality".

He made the comments in a meeting with doctors and medical personnel at the hospital, adding: "What we're doing here is so much more useful for the country."

The scandal surfaced when Ms Bettencourt's former butler made secret recordings of her conversations with advisers. Excerpts of the alleged conversations were printed in French media.

In an aside that has sent shock waves through the government, her financial adviser allegedly told her that he hired Mr Woerth's wife as an investment adviser because the minister asked him to.

Florence Woerth has since resigned, and the couple has denied there was a conflict of interest.

In the tapes, Ms Bettencourt and her adviser also are heard discussing undeclared Swiss bank accounts. The financial adviser has confirmed Bettencourt had €78m in two foreign accounts, and he has promised to get her affairs in order.

Until March, Eric Woerth was budget minister, in charge of pursuing tax dodgers. Mr Woerth, who is working on pension reform, has been strongly backed by Mr Sarkozy.

Two French junior government ministers resigned on Sunday after scandals involving spending state money on a private jet and thousands of euros worth of Havana cigars. There has been widespread speculation that their departure could have been designed to draw attention away from the higher-profile Mr Woerth.

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