Howard Davies: Why did Hollande entrust France's finances to a cosmetic surgeon?

Cahuzac, a cosmetic surgeon and Frances' budget minister, left a toxic cloud behind him after he resigned over a tax scandal. What did Hollande know and when?

by Howard Davies
Last Updated: 17 May 2013

One reasonable criticism of the Leveson proposals and the Government's 'little law' underpinning the Royal Charter is that it covers the print media only. The blogosphere and other web-based outpourings escape regulation. So we are starting to regulate the behaviour of dinosaurs on the verge of extinction. I can't recall when I last saw someone reading a paid-for white paper on the Tube. (You do see the pink 'un from time to time, and of course armies of MT readers.)

This links to the major concern of editors and journalists. It is fine to put all your content onto websites, as the Guardian and the Mail have very successfully done, but how on earth can one make people pay for it? Few have been successful so far. The Times tucked itself behind a paywall in 2010 and has hardly been heard of since. Only the FT, which sells valuable data alongside news, has made a fist of it.

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The same problem exists elsewhere, but in France one man seems to have found a solution and has become the most powerful and feared person in the republic as a result. Edwy Plenel was for a decade the editor of Le Monde - a kind of Times for grown-ups. He left a couple of years ago, in mid-career, to found a website called Mediapart, staffed by an enterprising and energetic group of journalists, mainly alumni of Le Monde. They made the brave decision to sell subscriptions from day un.

The goss has it that it is now profitable and at the moment it's on a high, as it broke a scandal that is threatening the Hollande regime before it reaches its first birthday. The short version is that Mediapart claimed a few months back that Jerome Cahuzac, Hollande's budget minister (think Chief Secretary to the Treasury), had a Swiss bank account with 600,000 of untaxed French income in it. That would be a tricky one for any government but especially for Hollande, who ran a campaign based on hostility to the financial sector and offshore centres, and indeed to the rich in general.

Cahuzac, a cosmetic surgeon specialising in hair implants (must get his number), denied the story flatly to the media and in parliament. Hollande stuck by him. But a couple of months later, he decided to resign and fight to clear his name, a la Jonathan Aitken. Then, within a fortnight, he confessed that he did indeed once have such an account, but had moved it a few times, eventually to Switzerland, to evade the taxman.

Cahuzac himself is now pain grille. Hollande described his sins as 'unpardonable'. But he has left a toxic cloud of questions behind him. What did Hollande know and when? What was the president doing in the first place entrusting the nation's finances to a cosmetic surgeon, who flirted with the far right early in his career?

One exotic feature is that the agent who first opened the account on his behalf is now an adviser to Marine Le Pen. Could the government really not have found out the truth if Mediapart could? What is the famed internal intelligence network for, for goodness sake?

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For the British reader the shock, I know, is that one can get this far into a French scandal without sex rearing its beautiful head. Fear not. It seems that sex, or rather no sex, may well have been involved. Cahuzac was in the process of divorcing his wife and business partner of 30 years, no doubt to make room for a new implant. She hired private detectives to follow him and find out about his money. So a woman scorned is at the heart of the story, albeit not a Greek one this time.

The net result is that Mediapart is now the go-to site for anyone with a passing interest in French politics. Could it happen here, with one of the titans of the British press launching a genuine investigative operation? James Harding, the former editor of The Times, which was excoriated by Leveson for giving 'utterly misleading' evidence to a court on his watch, doesn't appear to have what it takes, but maybe someone else will take the plunge. There looks to be a gap in the market, just as there was in France. But whoever it is will need to be more careful than the Bureau of Investigative Journalism, which made such a fool of itself and of the BBC with its McAlpine smears.

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The Cahuzac scandal has painted an extra coat of gloom on an already depressed French political class. And, to cap it all, Paris property prices are starting to fall. After a heady rise, you now pay £500,000 in central Paris for a cupboard on the fifth floor of a crumbling block with no lift but plenty of mice. In February, the Economist calculated that French property was 35% overvalued by European standards. That was seen as another vicious Anglo-Saxon attack on France, but in the past few months it is down by 5%, with forecasts of more of the same.

It would be good if the same were true of chicken. The other night, we decided to economise by eating in, so I popped out for a piece of fish. The turbot looked good on its slab in the local fishmonger. It should have done, at 190 a kilo. Not knowing the French equivalent of 'you're havin' a laugh, mate', I popped across to the butchers and picked out a poulet de Bresse. It just didn't occur to me that they could charge 45 for a four-pound chuck. So I paid up like a man. Can't have every shop in the 7th arrondissement thinking the English are broke.

I think I'll stick to croque monsieur in future. But the good news is that discounted hair implants may be available some time soon as M Cahuzac tries to pay his legal bills.

- This diary appeared in the May edition of Management Today.

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