Sarkozy may quit as Chirac role in scandal is revealed

M. Sarkozy, the Interior Minister and the likely centre-right candidate in next year's presidential election, is said to be close to a decision to resign and turn his guns on the President and Prime Minister.

The most recent leaks to the press from a criminal inquiry by two magistrates suggest that - despite several denials - M. Chirac took a close and personal interest in a secret, unorthodox investigation of M. Sarkozy's alleged financial dealings in 2004. The allegations against M. Sarkozy, then emerging as a rival to M. Chirac for the leadership of the centre-right, rapidly proved to be bogus.

It emerged yesterday that M. Villepin demanded a second, secret investigation by one of the French intelligence services in the summer of 2004, even though the corruption allegations had already been shown to be an elaborate plot.

M. Villepin faces a confidence vote in the National Assembly next Tuesday. Many centre-right deputies would like to see the Prime Minister sacked before then.

If M. Chirac forces his parliamentary troops to support M. Villepin, he faces the likelihood of a dramatic exit from the government by M. Sarkozy. The French centre-right would then be publicly split down the middle less than a year before the presidential elections.

In a further bizarre development, another investigating magistrate has admitted that he knew all along the identity of the source of the bogus corruption allegations in 2004, implicating M. Sarkozy and scores of other political and business figures. The judge, Renaud Van Ruymbeke, had previously insisted that the information came to him in letters and a CD-rom, from a corbeau (crow), or whistle-blower.

He has admitted to two other investigating judges, Jean-Marie d'Huy and Henri Pons, that he knew that the source of the information was Jean-Louis Gergorin, a senior executive at EADS, the company which makes the European Airbus, and a friend and former boss of M. Villepin. Judge Van Ruymbeke now faces investigation and a possible legal sanction.

The affair involves all the traditional ingredients of a French political scandal: misuse of the intelligence services; rivalries within the defence procurement industry; and poisonous hatreds between colleagues within the government.

Coming on top of the suburban riots last autumn, the street protests against a new employment law, and the rejection of the proposed European Union constitution, the so-called "Clearstream Affair" threatens to snap the final threads of patience of the French electorate with M. Chirac. Worse, it threatens to compound the cynicism of centre-right voters towards the ruling class and pile up votes for the far right in next year's elections.

The affair takes its name from Clearstream International, a clearing bank in Luxembourg, which was alleged in 2003-04 to hold undeclared accounts for up to 100 political and business figures in France and members of the intelligence services. The information, sent to Judge Van Ruymbeke in May and June 2004, proved to be false, using real bank account numbers and trumped-up names.

A year ago, two judges were appointed to investigate the deliberate attempt to blacken the name of M. Sarkozy and the others. In March of this year, they discovered that, in January 2004 - four months before the allegations were sent to Judge Van Ruymbeke - the same bogus lists of Clearsteam bank accounts were at the centre of an unofficial and unorthodox investigation requested secretly by M. Villepin, the then foreign minister.

Testimony to the judges by the intelligence officer charged with this secret investigation, General Philippe Rondot, has been comprehensively leaked to the French press in the past two weeks. The general's testimony suggests that he was asked to investigate the political implications of the lists of offshore accounts, and especially the involvement of M. Sarkozy.

Both M. Chirac and M. Villepin have repeatedly denied that they conducted an investigation into M. Sarkozy. M. Chirac has said that he had no knowledge of the investigation at all.

The French newspaper Le Monde has published details of comprehensive notes kept by the general and seized from his home by the investigating judges in April.

They suggest repeatedly that the "PR" (President of the Republic) had asked for, and was closely following, the general's investigation. At one point, they quote "DVP" (Dominique de Villepin) as saying that he and the "PR" would "be blown up" if their role in the investigation ever came out.

There is no evidence that M. Chirac and M. Villepin initiated the apparent plot to smear M. Sarkozy. They stand accused of seizing on the bogus information, making improper use of intelligence services, pursuing the false allegations and trying to ensure they were leaked to the press.

Constitution prevents investigation of President

The French President Jacques Chirac cannot be directly investigated for his alleged role in the Clearstream "smear" scandal or any of the other scandals with which he has been linked since he was elected 11 years ago.

Under a legally binding interpretation of the French constitution, issued by a constitutional watchdog in 1997, no President of the Republic can be tried, or even investigated, while in office. M. Chirac could, however, face investigation for this, and the other affairs, if he leaves office without standing again next spring, as now seems likely. All the other allegations concern irregular use of public money, or kick-backs on public contracts, to finance his presidential ambitions while he was mayor of Paris in the period between 1977 and 1995.

However, the suggestion, often seen in foreign media, that M. Chirac may face jail when he leaves office is far-fetched. The kind of allegations made against him are likely to take many years to come to court and, if proved, result, at most, in a fine and a suspension from politics. M. Chirac is 73.