Dispatch

Death by a Thousand Cuts

Death by a Thousand Cuts

PARIS — François Hollande’s presidency has been disfigured by a plastic surgeon.

Oh, the irony. The current head of state is that rare, big-time French politician who does not ooze vanity. Unlike former President Nicolas Sarkozy, an exercise freak who wore lifts in his shoes and worked hard to hide the peculiarities of his body, Hollande seems comfortable with his short stature. He battles his paunch, but it is more like a gentle competition with an old friend. His one smidgen of vanity is all the more humanizing: He dyes the little that remains of his hair with a product that looks, well, cheap.

So it was a bit surprising to see Hollande in the company of a man like Jérôme Cahuzac. Prime Minister Jean-Marc Ayrault chose the ambitious, serpentine plastic surgeon to be his budget minister soon after the May 2012 presidential election. While Cahuzac has worn many faces, it is becoming clear that the most dramatic makeover of his career may be of Hollande and his Socialist government, a group that was supposed to be an antidote to the bling-bling presidency of Sarkozy.

Cahuzac began his career in the 1980s as a traditional surgeon who rose to head the public medical clinic where he practiced until he was invited in 1988 to join the cabinet of the minister of health, Claude Évin.

In 1991, Cahuzac went into the private sector, leaping into the superficial world of plastic surgery and hair implants. It seems to have been quite lucrative given that he and his soon-to-be ex-wife own a vast apartment on the posh Avenue de Breteuil in Paris’s 7th arrondissement, and that they are subject to France’s wealth tax. In 1993, the ambitious surgeon began to work as a technical advisor to a wide array of pharmaceutical labs and continued to bounce between the business and political worlds, becoming the health advisor to the Socialist Party’s failed presidential candidate, Lionel Jospin, in 1995. In 1997, he won election to Parliament, where, thanks to his sharp public speaking and searing criticism of the conservative government’s fiscal policies, he became a notable figure in the opposition. In 2010 he was elected to preside over the parliamentary commission on finance, the economy, and budgetary control.

Cahuzac was a devoted backer of Dominique Strauss-Kahn until the popular IMF head’s presidential aspirations collapsed when he was charged with sexually assaulting a cleaning lady in a New York City hotel. Thus, it was somewhat unexpected that Hollande, the eventual Socialist nominee, appointed Cahuzac to oversee France’s budget. From the start, the role of budget minister was particularly crucial, as Hollande had promised to make rich people pay more, while cracking down on individual and corporate tax evaders — a program that was designed to help shrink France’s troubling budget deficit and "moralize" the country’s relationship to money. The role required Cahuzac to have impeccable credentials and utter credibility. After tapping corporate France and the rich, his next step was going to be the enactment of ever increasing deficit reductions, which are expected to total more than 10 billion euros in 2013 and perhaps a greater amount in 2014. Pain will surely be inflicted on some of the sacred cows of Socialist supporters, with a possible increase in the retirement age for most people. Tax increases on corporations and the rich, along with a bevy of cuts, make for a polarizing policy, and critics on the right have lambasted the president’s economic agenda. (Actor Gérard Depardieu became a poster boy for anti-Hollande-ism when he moved abroad and became France’s most famous self-imposed tax exile.

But no one quite saw this coming.

The first scent of trouble came in December, when the French investigative website Mediapart published an investigative article alleging that Cahuzac, who was effectively Hollande’s tax czar, had an unreported Swiss bank account. Cahuzac threatened to attack Mediapart in court and vociferously denied the allegation both in public and directly to the president. He also went before Parliament and swore to longtime colleagues: "I do not have, I have never had, an account abroad, not now, not ever."

The government looked into the accusations, while French court investigators took up the case in a more formal manner. The government concluded that the allegations were baseless, but the judicial investigation followed up on Mediapart’s lead and eventually found enough evidence to issue the French equivalent of a preliminary indictment. In March, Cahuzac did what most ministers do in such a situation: He resigned to defend himself. And many of his political allies continued to talk up his probity.

Then came the bombshell. On April 2, Cahuzac confessed. In 1992, he had asked someone to open a Swiss bank account for him. His secret savings eventually grew to 600,000 euros (more than three-quarters of a million dollars), and he transferred the money to another account in Singapore in 2010. He had never reported either account on his taxes in France. "Devastated by remorse" over his "spiral of lies," Cahuzac announced that he is repatriating the money to France, and he sought "forgiveness for the damage I have caused."

If that sounds bad in the abstract, it is far worse in practice. Hollande had promised his presidency would be different. The keywords of his campaign were normal, fair, just, and clean. He vowed to be an ascetic representative of the people and take on the collusion of the political and business classes. His government would be "irreproachable." Symbols mattered. He shunned black limousines and rode a motor scooter to an interview early in his presidential primary campaign. One of his first actions after taking office was to cut the salaries of all ministers by 30 percent, and he encouraged his cabinet to take the train instead of using cars.

After Cahuzac’s admission, Hollande went on television to describe his former minister’s "unpardonable mistake." The provocative political magazine Marianne ran a cover summarizing the broader analysis of the French media: "The Ravages of a Disaster for the Republic." Foreign Minister Laurent Fabius put his finger on the pulse of the nation when he noted that people would conclude that politicians "are all rotten."

Even before this debacle, France was itching with impatience. Unemployment is rising toward its highest point since 1998, economic growth is near stagnant (the IMF expects just a 0.4 percent uptick in 2013), and Europe is entering the fourth year of its debt crisis. As Hollande nears the first anniversary of his victory over Sarkozy, there is little sense that the new president will turn things around anytime soon.

No wonder the president’s approval ratings, at 30 percent or less in an array of polls, are the lowest of any modern French head of state at such an early point in his term. This should still be the honeymoon, but in light of the Cahuzac bombshell, six people in 10 already want a major government reshuffle.

This credibility-shattering revelation follows a never-ending array of corruption
probes under the two previous conservative presidents, Jacques Chirac and Sarkozy, the latter of whom remains under investigation in several cases. The mainstream parties are suffering; 76 percent of the French say they no longer believe in political leaders, and 70 percent of voters think that France’s extreme political parties will benefit from this mess.

Meanwhile, the far-right National Front party president, Marine Le Pen, is working hard to make this forecast a reality. Soon after Cahuzac’s confession, she called on the government to step down and demanded new elections. The larger (and mainstream) conservative opposition party, the UMP, has called for a major ministerial shake-up and suggested that Prime Minister Ayrault should be replaced.

Hollande’s desperate hope is that he can turn this free-fall into a bungee-like bounce. He almost instantly promised major reforms and suggested that people convicted of fraud would be banned from office. On April 10, he announced that all his ministers will soon publish their personal financial information — and they did on April 15. Hollande also highlighted specific rules that will be put in place to eliminate conflicts of interest for ministers, parliamentarians, and top administrative officials — and proposed the creation of an independent authority with the teeth to monitor and respond to such corruption.

Challenges to such change are already emerging from elements in the political class, with an array of ministers arguing that being forced to reveal information about their net worth would be a violation of their privacy. While every major country seems to find its own unique ways to corrupt its own political culture, French courts and media have, until fairly recently, often accepted an outsized "private" space for politicians when it comes to their cozy relationships with wealthy patrons.

Even if Hollande succeeds, his new transparency legislation could still weaken his government in the short term, given that journalists are desperately working to confirm an array of rumors and allegations about other ministers. A Swiss television channel reported that Cahuzac also tried to stash 15 million euros in a Swiss account in 2009, though it failed to offer credible evidence. And the leftist French daily Libération wrote a story saying that Mediapart had proof that Foreign Minister Fabius also has unreported money in Switzerland, only to apologize for the article several days later. (Mediapart’s top boss quickly denied the initial report in a tweet.) The foreign minister, according to one of his lawyers, "forcefully denies" all such rumors. 

But the news kept getting worse. Two days after Cahuzac admitted his own wrongdoing, France’s newspaper of record, Le Monde, revealed that the former treasurer of Hollande’s presidential campaign, Jean-Jacques Augier, is part-owner of two companies registered in the Cayman Islands. The former treasurer and businessman, who is also a friend of Hollande, quickly confirmed that he had in fact invested in a company that placed money in the legendary tax haven, but he insisted that there was nothing illegal about it.

Even if all these other allegations of wrongdoing prove to be incorrect, many French people assume that other hypocritical politicians — whether Socialists or UMP parliamentarians — have enjoyed ill-gotten gains and avoided their taxes. As an old friend of mine, who refuses to vote for mainstream parties, commented, "How many others are there?"

That’s a good question. Another one is this: Where did Cahuzac’s secret money actually come from? His lawyer has said that the funds came mostly from plastic surgery clients who paid in cash. He gave that explanation as French journalists first began looking into whether Cahuzac might have garnered kickbacks from the pharmaceutical industry when he was an advisor at the Health Ministry.

While France waits to discover how widespread its morality-and-money problems are, a court will be deciding on the preliminary charge of tax fraud against Cahuzac, who faces a possible fine of up to 375,000 euros and five years in prison, if convicted. On the political front, if Hollande can seize on this scandal to purify his government and transform France’s long-standing political culture, it would amount to a remarkable turnaround.

But until then, it seems Hollande’s plastic surgeon has not only disfigured his boss — he has made French politics into a far uglier place.