The late Libyan dictator Moammar Gadhafi's former chief of staff is living in France with the government's permission despite facing U.S. sanctions and being wanted by Interpol.

The presence in France of Basher Saleh threatens to make life even more complicated for French President Nicolas Sarkozy, who confirmed Tuesday that Saleh is here. Sarkozy has had a roller-coaster relationship with Libya and faces an uphill battle for re-election in a vote Sunday.

The French leader already has denied recent allegations that Gadhafi's regime offered to finance his 2007 presidential campaign.

Saleh served as Gadhafi's chief of staff, chief of the Cabinet, and chairman of the government-controlled Libya Africa Investment Portfolio, according to the U.S. government. A former Libyan rebel described Saleh on Tuesday as a key Gadhafi adviser who knows many of the regime's secrets.

French website Mediapart and newspaper Canard Enchaine have described Saleh as the dead dictator's "cash man" and suggested that Sarkozy allowed Saleh refuge in France because of past favors.

Sarkozy denies the reports. He said in an interview with RMC radio Tuesday that "Saleh is in France. ... The decision for him to be in France was made after consultations with Libyan authorities, because his family was in France."

Interpol's website has a so-called red notice for a man named Bashir al-Shrkawi, based on a Libyan warrant for fraud. The attached photos appear to show Saleh. The Lyon, France-based police agency referred all questions on the warrant to Libya's new government.

A member of Libya's National Transitional Council said that the Libyan warrant was issued for Basher Saleh al-Sharkawy. The council member, who spoke on condition of anonymity, gave no other details.

Sarkozy said France would hand over Saleh if it's confirmed that he is wanted by Interpol, and said the French government is "working hand in hand with the Libyan authorities" to determine how to handle Saleh's case.

An Interpol red notice is the equivalent of putting a suspect on the police agency's most-wanted list. The notices are based on national warrants, and mean Interpol is urging all member countries to arrest and hand over the suspect.

The U.S. Office for Foreign Asset Control put Saleh on a sanctions list in April 2011, noting three different spellings of his name.

Khaled el-Zintani, a spokesman for Libya's Zintan fighters, one of dozens of militias across the country operating outside government control, said that Zintan fighters arrested Saleh in Tripoli in October.

Saleh was later set free under unclear circumstances, then went to Niger where he was appointed an adviser to Niger's president, then moved to France, el-Zintani said.

"Many western countries have at some point cooperated with Gadhafi's regime and it wouldn't be a surprise that some would give asylum to Gadhafi's men to cover up their secrets," el-Zintani said.

Saleh has a diplomatic passport from Niger that could confer him immunity from prosecution, France's Prime Minister Francois Fillon said. Such a status could also mean that France would need to seek Niger's permission for any eventual extradition to Libya. Fillon did not specify if Saleh was in France as a representative of Niger's government, which could have a bearing on whether or not he has diplomatic immunity.

Sarkozy had an up-and-down relationship with Gadhafi's regime.

Two months after his 2007 election, Sarkozy's then-wife Cecilia traveled to Libya and helped negotiate the release of Bulgarian nurses and a Palestinian doctor sentenced to death on charges of infecting children with HIV. Their case had strained Libya's relations with the international community.

Later that year, Gadhafi was received in Paris for a formal state visit, pitching his tent near Sarkozy's Elysee Palace despite widespread protests from human rights groups.

Then when Gadhafi's forces cracked down on an opposition movement amid the Arab Spring uprisings last year, Sarkozy quickly became one of Gadhafi's most vociferous critics. Sarkozy led an international push for airstrikes to force Gadhafi from power. Gadhafi was later killed.

Days before the NATO-led airstrikes began in March 2011, one of Gadhafi's sons first leveled the accusations that Libya had once financed Sarkozy's political ambitions.

Although no evidence has emerged that any funding ever took place, website Mediapart reported Saturday it had obtained a 2006 Libyan document signed by Gadhafi's then-intelligence chief Moussa Koussa with an offer by the regime to spend €50 million ($66 million) on Sarkozy's first presidential bid.

Sarkozy's legal complaint accused Mediapart of "forgery" and "publication of false news."


Rami Al-Shaheibi in Tripoli, Maggie Michael in Cairo and Sylvie Corbet in Paris contributed to this report.