July 26, 2010 / 5:19 PM / 9 years ago

Police question French heiress over scandal

PARIS (Reuters) - Police questioned France’s richest woman on Monday about suspected tax evasion, money laundering and alleged illegal political donations in a scandal that has shaken the government.

A French policeman stands in front of the entrance to the home of Liliane Bettencourt, the elderly heiress to the L'Oreal fortune, as a police car enters in Neuilly-sur-Seine, near Paris July 26, 2010. REUTERS/Benoit Tessier

L’Oreal heiress Liliane Bettencourt, 87, was asked to explain two undeclared Swiss bank accounts and her involvement with an island in the Seychelles mentioned in secret recordings made by a former butler and published in the media.

Her lawyer, Georges Kiejman, said she told investigators she had no detailed knowledge of the matters because she employed staff to manage her fortune and tax affairs and had followed their advice.

“I wasn’t present at the questioning, but I understand from my client that it was very courteous and as complete as possible given that these were sometimes old memories and that my client hasn’t necessarily kept the details in mind,” he told reporters.

Bettencourt has acknowledged the existence of the Swiss accounts and said she will repatriate the 78 million euros ($100 million) held in them and settle up with the tax authorities.

She was questioned about allegations by a former bookkeeper that she and her late husband made big illegal cash payments to conservative politicians, including to Labour Minister Eric Woerth for President Nicolas Sarkozy’s 2007 election campaign.

“On the financing of political parties, she confirmed that this had never been her center of interest and that it was more her husband’s field when he was alive,” Kiejman said, without giving details.

Bettencourt was questioned for two hours as a witness at her villa in the wealthy Paris suburb of Neuilly. Police also searched her secretary’s office for documents in the case.

By contrast, others protagonists in the affair have been summoned to the headquarters of the Paris financial crimes division and some held overnight in police custody.

Woerth has denied receiving any illegal money and rejected accusations of a conflict of interest over his wife’s job with Bettencourt’s wealth manager while Woerth was budget minister in charge of tax affairs and treasurer of the ruling UMP party.

Bettencourt told police she vaguely remembered having had dinner with Woerth once but did not recall his wife, who was not one of her close staff, according to her lawyer.

The minister is expected to be questioned by police later this week after the cabinet gave the green light last Wednesday. Woerth has refused to resign and says he will continue to lead a major pension reform due to be adopted by parliament in October.

FAMILY FEUD

What began as a family feud over lavish gifts by Bettencourt to a close friend, society photographer Francois-Marie Banier, has turned into a political scandal.

Francoise Meyers-Bettencourt, the billionairess’s daughter, has filed two lawsuits seeking to have her mother declared mentally unfit and made a ward of the court.

Public prosecutor Philippe Courroye wrote to Meyers-Bettencourt last week saying her application had no chance of acceptance without a medical certificate attesting to her mother’s mental state.

The heiress has refused to undergo an independent medical examination but said in the statement on Friday she had already given 92 percent of her fortune to her daughter and grandsons and was fully capable of looking after her remaining fortune.

She said she had given them her 30.98 percent stake in L’Oreal, with a market value of 14.5 billion euros ($18.72 billion), but receives the dividend income and has about 1 billion euros in other assets.

The secret recordings suggest Bettencourt’s wealth manager received advice from President Nicolas Sarkozy’s legal counselor at the Elysee presidential palace on how to deal with the lawsuits.

In another twist to the scandal, Kiejman said in a statement that Bettencourt had changed her will and hinted that Banier was no longer her sole heir and executor.

In a 2007 document impounded by police at her notary’s office last week, according to newspaper Le Monde, Bettencourt had named Banier as her sole heir with a provision that if he died before her, her estate would go to his companion Martin d’Orgeval.

Her lawyer said the documents seized “do not take account of the latest probate arrangements made by Mrs Bettencourt, which she is perfectly entitled to keep secret.”

In a statement released last week, Bettencourt said she had given more than 92 percent of her fortune to her daughter and two grandsons, leaving less than 8 percent to be disposed of in her will.

Writing by Paul Taylor; editing by Andrew Roche

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