Sarkozy Lashes Out at 'Smear' Campaign Over Campaign Donations

June 27: French President Nicolas Sarkozy speaks during his final press conference at the conclusion of the G20 Summit in Toronto. (AP)

PARIS -- French President Nicolas Sarkozy denied a report that his 2007 election campaign received $188,000 in secret cash donations from the country's richest woman, saying Tuesday the allegations were an effort to smear him.

For weeks, Sarkozy and his government have defended Labor Minister Eric Woerth, who has been linked to suggestions of tax evasion involving L'Oreal heiress Liliane Bettencourt. The 87-year-old is No. 17 on Forbes magazine's list of the world's richest people worldwide.

The scandal -- which has already destabilized Sarkozy's conservative government and contributed to his dismal approval ratings of about 26 percent -- took a new twist Tuesday, with accusations pointing to the chief of state.

Bettencourt's former accountant was quoted as telling a French news website that the heiress and her late husband offered Woerth $188,000 in cash for Sarkozy's 2007 campaign, well above the legal limit for such donations.

Woerth, who has been treasurer for Sarkozy's conservative party for eight years, said Tuesday 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 Sarkozy over for meals and hand him cash-stuffed envelopes when he was mayor of the leafy suburb of Neuilly-sur-Seine from 1983 to 2002.

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

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

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

Sarkozy 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."

Bettencourt's lawyer, Georges Kiejman, did not immediately respond to a request for comment.

The scandal started when Bettencourt's former butler made secret recordings of her conversations with advisers. Excerpts of the alleged conversations were printed in French media, including on the Mediapart website.

In an aside that has sent shock waves through the government, Bettencourt's financial adviser allegedly told his client that he hired 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, Bettencourt and her adviser also are heard discussing undeclared Swiss bank accounts. The financial adviser has confirmed Bettencourt had $97 million 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. Woerth, who is working on pension reform, has been strongly backed by Sarkozy.

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