You're reading: French police quiz Sarkozy backer Tapie in fraud investigation

French police questioned flamboyant tycoon Bernard Tapie on Monday in a fraud investigation that threatens to damage ex-president Nicolas Sarkozy's hopes of a political comeback.

Tapie, a member of France’s business and sporting elite,
says he has nothing to hide in the affair which has embroiled
members of Sarkozy’s cabinet, including IMF chief Christine
Lagarde, his former finance minister.

While both Sarkozy and Lagarde deny wrongdoing, the case is
one more legal headache for the former president whose
supporters would like to see run for the top job again to rescue
his divided conservative party.

The investigation is into whether a 285 million euro ($374
million) financial award that Tapie won in 2008 was a result of
political influence.

“I’m not worried about the merits of the case,” said
70-year-old Tapie, who served as a minister in Socialist
President Francois Mitterrand’s government in the 1980s, but
moved to the right and backed Sarkozy at the 2007 election.

“I’m wondering what they could possibly find,” he told
Europe 1 radio shortly before being taken in for questioning by
police specialised in financial crime.

Tapie alleged that the now-defunct bank Credit Lyonnais
defrauded him by purchasing his interest in sports clothing
company Adidas in 1993 for 315.5 million euros only
to sell it a year later for 701 million euros.

Investigators are trying to determine whether the close ties
between Tapie and members of Sarkozy’s inner circle influenced
the government’s decision in 2007 to turn to a private
arbitration tribunal to settle the long-running dispute.

The arbitration went in Tapie’s favour with an award which,
including interest, amounted to 403 million euros.

Under French law, Tapie – the owner of a regional newspaper
chain whose has raced cars, dabbled in acting and bought cycling
and soccer teams – could be kept in police custody for as long
as 96 hours as he is questioned on suspicion of organised fraud.

TRIAL AHEAD?

Socialist President Francois Hollande, who came to power
just over a year ago vowing to rid France of what he said were
unfair advantages accorded to the elite under Sarkozy, has said
he wants to get to the bottom of the arbitration affair.

He has continued to back Lagarde and the chief executive of
France Telecom, Stephane Richard, both of whom have
been caught up in the scandal.

Although Lagarde was not placed under formal investigation –
a step meaning that “serious or consistent evidence” points to
probable implication in a crime, Richard – her former aide –
was.

Richard has denied any wrongdoing and plans to appeal the
decision.

The investigation of Richard for conspiracy to commit fraud
increases the likelihood of a trial that could further tarnish
the image of the conservative party, which lost power last year
with Sarkozy’s defeat to Hollande.

Sarkozy is already distracted by two other legal tangles,
one a campaign funding scandal involving France’s richest woman;
the other involving possible kickbacks for submarine sales to
Pakistan in the 1990s when Sarkozy was a government minister.

Hollande’s own government has not been immune to scandal. In
April, the budget minister quit after it was revealed that he
had a Swiss bank account after telling parliament he did not.