On 19 March 2013

Jérôme Cahuzac Jérôme André Cahuzac (; born 19 June 1952) is a French surgeon and former politician who served as Minister of the Budget at the Ministry of the Economy and Finance under President François Hollande from 2012 to 2013. A former member of ...

resigned as a minister in charge of fighting against tax fraud due to

tax fraud Tax evasion is an illegal attempt to defeat the imposition of taxes by individuals, corporations, trusts, and others. Tax evasion often entails the deliberate misrepresentation of the taxpayer's affairs to the tax authorities to reduce the taxp ...

allegations. He later admitted that he had held a secret foreign bank account for about 20 years. As a consequence, he was officially excluded as a member of the

Socialist Party Socialist Party is the name of many different political parties around the world. All of these parties claim to uphold some form of socialism, though they may have very different interpretations of what "socialism" means. Statistically, most of th ...

. The release of the

Panama Papers The Panama Papers ( es, Papeles de Panamá) are 11.5 million leaked documents (or 2.6 terabytes of data) that were published beginning on April 3, 2016. The papers detail financial and attorney–client information for more than 214,488 ...

confirmed that Cahuzac owned a Seychelles company named Cerman Group Limited, incorporated in 2009, whose director and shareholder were from other offshore companies. Jérôme Cahuzac was sentenced to three years in prison and five years of ineligibility on 8 December 2016.

Background

The global financial crisis of 2008 is considered by many to be the worst financial crisis since 1929's Black Thursday. It left France and the rest of Europe exhausted and indebted.

Nicolas Sarkozy Nicolas Paul Stéphane Sarközy de Nagy-Bocsa (; ; born 28 January 1955) is a French politician who served as President of France from 2007 to 2012. Born in Paris, he is of Hungarian, Greek Jewish, and French origin. Mayor of Neuilly-sur-Se ...

was then President of France, from 2007 to 2012. Following his five-year tenure, he lost the second round of the 2012 presidential election against Francois Hollande. In 2010,

was elected President of the Finance, General Economy and Budgetary Control Committees of the National Assembly. Two years later, in 2012, he joined

François Hollande François Gérard Georges Nicolas Hollande (; born 12 August 1954) is a French politician who served as President of France from 2012 to 2017. He previously was First Secretary of the Socialist Party (PS) from 1997 to 2008, Mayor of Tulle from ...

's presidential campaign team. He was given the task to handle the budgetary, financial and fiscal aspects of the campaign. After Mr. Hollande's success and election as France's President, Cahuzac was appointed Delegated Minister of Budget on 16 May 2012. Cahuzac is a physician whose political career began in 1997 when he was elected to be a deputy of the

National Assembly In politics, a national assembly is either a unicameral legislature, the lower house of a bicameral legislature, or both houses of a bicameral legislature together. In the English language it generally means "an assembly composed of the repre ...

. The National Assembly is one of the two major political bodies in France. Currently 577 deputies make up the National Assembly. Along with the Senate, it forms the parliament of the

Fifth French Republic The Fifth Republic (french: Cinquième République) is France's current republican system of government. It was established on 4 October 1958 by Charles de Gaulle under the Constitution of the Fifth Republic.. The Fifth Republic emerged from t ...

. Going from general counsel of the Department of "

Lot-et-Garonne Lot-et-Garonne (, oc, Òlt e Garona) is a department in the Nouvelle-Aquitaine region of Southwestern France. Named after the rivers Lot and Garonne, it had a population of 331,271 in 2019.leaked, voters had grown distrustful of politicians.

Key events

The Cahuzac affair's main aspects are the genesis and evolution of the financial crimes, the downfall of participants, and the reason for the scandal's unveiling. This scandal was originally revealed with the publishing of a "secret recording" by

Mediapart ''Mediapart'' is an independent French investigative online newspaper created in 2008 by Edwy Plenel, former editor-in-chief of ''Le Monde''. ''Mediapart'' is published in French, English and Spanish. ''Mediapart's'' income is solely derived ...

. The recording originally took place towards the end of the year 2000, but was only revealed in the beginning of March 2013. It contained the voices of two individuals, Cahuzac and his wealth manager Hervé Dreyfus. Both were discussing a variety of financial and private matters. Among these matters, was that of his bank account with

UBS UBS Group AG is a multinational Investment banking, investment bank and financial services company founded and based in Switzerland. Co-headquartered in the cities of Zürich and Basel, it maintains a presence in all major financial centres ...

. Mr. Cahuzac explained to his associate that his account with that bank was bothering him because he had no more use for it. It was later found that he had transferred all the funds present on that bank account to another one overseas. Here is a short part of the (French) scripted recording that accurately depicts the previously referred to situation: ''"Ca me fait chier d’avoir un compte ouvert là-bas, l’UBS c’est quand même pas forcément la plus planquée des banques."'' In English, this translates to: ''"The fact of having a bank account open there truly bothers me, UBS isn’t necessarily the most hidden of banks."'' Cahuzac never categorically denied the authenticity of the recording. He is known to have said that out of all these minutes of conversation, there may have been a few seconds where it was indeed him speaking. Following the amount of press coverage, proof and criticism stemming from the recording's leakage, President Hollande had no other choice but to release him from his duties as Minister of Budget on 19 March 2013. Mr. Cahuzac was accused of

money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...

and fiscal fraud. He later admitted to having transferred 600,000 euros to a bank account in

Singapore Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, borde ...

. Subsequently, he was condemned to three years in prison along with a 375,000 euro fine. The judges on the case deemed this sentence necessary because of the "traitorous" nature of his acts and words – "especially when put in contrast with his job responsibilities and requirements" said one of the judges. He can however decide to appeal the decision reached by the Justice officials. Conjointly, his ex-wife Patricia Cahuzac is standing trial next to him for "family fiscal fraud." Having, in addition to the things previously stated, participated in the creation of various

shell companies A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets, such as intellectual property, or s ...

, she was consequently condemned to two years of prison. The reasons for the unraveling of this affair are numerous. The main reason stems from reporters, who saw huge potential in possible findings resulting from the thorough investigation of the bank accounts of France's newly appointed Minister of Budget – who just so happened to previously be a

plastic surgeon Plastic surgery is a surgical specialty involving the restoration, reconstruction or alteration of the human body. It can be divided into two main categories: reconstructive surgery and cosmetic surgery. Reconstructive surgery includes craniof ...

. Mr. Cahuzac was at the centre of the stage for quite some time. Two other players that had a crucial role in the developing of this affair were the

French military The French Armed Forces (french: Forces armées françaises) encompass the Army, the Navy, the Air and Space Force and the Gendarmerie of the French Republic. The President of France heads the armed forces as Chief of the Armed Forces. France ...

along with the armament industry. Mr. Cahuzac was planning on implementing huge budget cuts for the country's Defense budget. Reports indicate that he was planning on bringing it down from 32 to 20 billion euros annually. By doing so, he would encourage the removal of dozens of ground military-units, the cancellation of on-going military contracts for aircraft and helicopters, as well as the rumored removal of France's one and only aircraft carrier, the "

Charles de Gaulle Charles André Joseph Marie de Gaulle (; ; (commonly abbreviated as CDG) 22 November 18909 November 1970) was a French army officer and statesman who led Free France against Nazi Germany in World War II and chaired the Provisional Government ...

." In an article published by

Atlantico ''Atlantico'' is a French news website. Founded on 28 February 2011 amid much media attention, it quickly attracted notice for scoops related to scandals involving the Socialist politician and International Monetary Fund head, Dominique Strauss ...

, it is explained that the French secret services, along with multiple members of the Defense Committee, were in fact the key players in this story. It was revealed that they had worked together to gather information on his Swiss UBS bank account and tracked the money-trail that led to Singapore. Once it was done, they leaked their discoveries to the press and just waited for the whole affair to "blow-up."

Political impacts and reforms

The Cahuzac affair was impactful, and reforms ensued. The scandal weakened President Hollande's stature, as he was blamed for appointing Cahuzac at the start of his tenure. As a consequence of the movement that followed the Minister's resignation, a huge amount of skepticism and distrust settled in the country. Citizens and reporters started questioning and interrogating various politicians – thinking that some of them were also undoubtedly involved in the same sort of activities. Political figures such as

Pierre Moscovici Pierre Moscovici (, ; born 16 September 1957) is a French politician who served as the European Commissioner for Economic and Financial Affairs, Taxation and Customs from 2014 to 2019. He previously served as Minister of Finance from 2012 to 20 ...

(Minister of Finance and Economy from 2012 to 2014) and

Jean-Jacques Augier Jean-Jacques Augier (born 23 October 1953) is a French publisher and businessman. He previously worked as an inspector of finances, and was treasurer for the 2012 presidential election campaign of previous French president Francois Hollande. Hollan ...

(active politician and inspector of finances) were put under investigation as a result. France's president and government subsequently decided to implement new reforms. There were two main reforms announced by President Hollande following this incident. The first one encompasses the idea that elected politicians who have been condemned for fiscal fraud or corruption would be forbidden from any type of

public office Public Administration (a form of governance) or Public Policy and Administration (an academic discipline) is the implementation of public policy, administration of government establishment (public governance), management of non-profit establ ...

or mandate. And the second one states that the financial details of each and every single minister and Member of Parliament have to be examined and published. French laws do not sanction the lie of an elected politician in front of the National Assembly. However, to fight

perjury Perjury (also known as foreswearing) is the intentional act of swearing a false oath or falsifying an affirmation to tell the truth, whether spoken or in writing, concerning matters material to an official proceeding."Perjury The act or an inst ...

as much as possible, a specific law is trying to be put forth and passed by the National Assembly. This law states that a 75,000 euro fine and up to five years of prison was required for any elected politician or Member of Parliament who lies in front of Parliament about a fiscal or criminal matter. These laws and new regulations were put in place after French politicians realized how dissatisfied the French population was. French news outlets '' LeMonde'', '' LeFigaro'' and ''LCI'' conducted a study that indeed confirmed the preceding statement: 33% of France's citizens wanted President Hollande to dissolve the National Assembly – one of the Fifth French Republic's most important and emblematic pillars.

Aftermath

As a consequence of such scandals, new laws were introduced to fight fiscal fraud, money laundering and perjury in France's parliamentary systems. In 2013, the year following the divulging of Cahuzac's foreign bank accounts, ''

Le Monde ''Le Monde'' (; ) is a French daily afternoon newspaper. It is the main publication of Le Monde Group and reported an average circulation of 323,039 copies per issue in 2009, about 40,000 of which were sold abroad. It has had its own website si ...

'' and ''

Le Figaro ''Le Figaro'' () is a French daily morning newspaper founded in 1826. It is headquartered on Boulevard Haussmann in the 9th arrondissement of Paris. The oldest national newspaper in France, ''Le Figaro'' is one of three French newspapers of reco ...

'' published a study that accurately depicted public opinion as indicating that 77% of French citizens deemed their country's politicians corrupt. *

References

{{Reflist Political scandals in France