* Upstart online website beats newspapers reporting sleaze
* Mediapart one of few media turning a profit in France
* Website a new threat to politicians used to an easy ride
By Emmanuel Jarry and Alexandria Sage
PARIS, April 9 A fledgling investigative website has made its mark as the top French media exposing government sleaze, with its coup against a minister leaving national newspapers playing catch-up and other politicians quaking.
After a late-2000s debut uncovering alleged graft led to the career downfall of a conservative minister, Mediapart has toppled a second minister, this time in the Socialist government, showing it has no allegiance to left or right.
Its disclosure that the man in charge of public finances had an undeclared Swiss bank account until mid-March has created the biggest sleaze scandal of President Francois Hollande's 11-month-old Socialist government.
Edwy Plenel, a longtime investigative reporter who founded Mediapart in 2008, said on Tuesday a shake-up had been long overdue in a political establishment used to newspapers turning a blind eye to peccadillos.
Unlike in Britain, where tabloids rake over the private lives of public figures hunting for the slightest lapse, extra-marital affairs and minor corruption often stays under the radar in France due to a long tradition of media respecting privacy.
"For too long there has been a tradition of 'journalism of government'. One that takes its legitimacy from those in power and which has forgotten that it is in the service of the people, of the law and citizens' right to know," Plenel said.
The erstwhile budget minister, Jerome Cahuzac, is now under investigation for allegedly laundering proceeds of tax fraud and Hollande is scrabbling to stem the scandal, rushing through a new law on moral standards in public life and promising to publish ministers' assets by next week.
Traditional print media were sceptical of a Mediapart report first run in December and repeatedly denied by Cahuzac, but last week Cahuzac owned up to the bank account and said he had been caught "in a spiral of lies".
Showing off his newsroom of some 30 reporters in a discreet backstreet in eastern Paris, Plenel told Reuters with a smile that the Cahuzac affair could just be the start of the story.
"We should be able to publish information that stirs things up," he added.
Mediapart caused a storm in conservative Nicolas Sarkozy's government with a 2010 report saying his UMP party had enjoyed illegal funding from billionaire heiress Liliane Bettencourt.
Sarkozy's labour minister Eric Woerth, also UMP treasurer and a former budget minister in the same goverment, lost his job in a reshuffle and was later placed under formal investigation for illicit party financing.
Sarkozy is now under investigation himself in the affair. Both Sarkozy and Woerth say they have done no wrong.
Mediapart aside, most investigative reporting in France is done by the satirical weekly Le Canard Enchaine, second only to the puppet news show Les Guignols in terms of irreverance.
The highbrow Le Monde dug into the Bettencourt scandal after Mediapart broke the story, but the conservative Le Figaro and the left-wing Liberation have mostly tended to avoid ruffling feathers on their respective sides of the political spectrum.
"In France, unlike the Anglo-Saxon tradition, we don't have a real tradition of investigative journalism. We're surprised when journalists investigate," said Christian Delporte, a professor of media history at the University of Versailles.
Liberation sought to play catch up this week, reporting that Mediapart was looking into whether Foreign Minister Laurent Fabius also had a Swiss account, but Fabius flatly denied he did and Plenel said the story bemused him.
Mediapart is also standing out by turning a profit from its 65,000 online subscriptions while newspapers struggle with falling readership. It broke even in 2010 and posted a 700,000 euro profit in 2012 on turnover of 6 million. Plenel said 1,000 people were signing up each day since the Cahuzac story.
The Canard Enchaine, wafer-thin yet jam-packed with political gossip and satire, also makes money.
Delporte said a thirst for more ruthless reporting in today's world of social media would only increase.
"For years politicians have had a certain arrogance vis-a-vis society but now it will be a lot more difficult," he said. (Writing by Catherine Bremer; Editing by Mark John and Alison Williams)