French government on defensive over tax fraud scandal

PARIS (AFP) - France's embattled government was forced to go on the defensive on Wednesday over an explosive tax fraud scandal involving a former budget minister, as critics questioned how much President Francois Hollande knew.

Mr Jerome Cahuzac - once responsible for cracking down on tax evasion - was charged on Tuesday with "laundering the proceeds of tax fraud" after admitting having a foreign bank account, an allegation he had until then denied.

Mr Hollande was quick to condemn the ex-minister - who resigned last month after prosecutors opened a probe into the account, first revealed by the investigative Mediapart news website - but critics demanded to know if he was aware of the account.

On Wednesday, the head of the main opposition right-wing UMP party Jean-Francois Cope said Mr Hollande had either showed "naivety" or he had "lied."

Either the president "knew nothing and that's extremely serious because it means that he showed a certain amount of naivety, either he knew and that means he lied to the French people," Mr Cope said on radio station Europe 1.

But Ms Najat Vallaud-Belkacem, spokeswoman for the government, countered that neither Mr Hollande nor Prime Minister Jean-Marc Ayrault "have to be responsible for the lie in which a man isolated himself."

She said on Europe 1 that both had asked Mr Cahuzac about the allegations, who had said he was "unaware of anything."

The former budget minister's lawyer admitted on Tuesday that his bank account, originally opened in Switzerland, had been transferred to Singapore in 2009 and that the amount laundered was equivalent to about 30,000 euros (S$47,539).

Mr Hollande had promised a government of unimpeachable morals, and the scandal if likely to further damage the standings of the president, who is languishing in the opinion polls less than a year into his five-year term.

French Finance Minister Pierre Moscovici on Wednesday leapt to his defence.

"I think that the president and myself did what was needed," he said on radio station RTL.

Little-known before being named a minister, Mr Cahuzac, 60, began his career as a cardiologist before switching to the more lucrative world of plastic surgery. He was elected to the National Assembly in 1997.

If convicted, he faces up to five years in prison.