Pressure on Chirac increases over Clearstream affair

PARIS - France faces an acute political crisis this weekend as further evidence accumulates that President Jacques Chirac and his Prime Minister, Dominique de Villepin, were linked to an intricate attempt to smear their colleague and rival, Nicolas Sarkozy two years ago.

M. Sarkozy, interior minister and Number Two in the government, and likely centre-right candidate in next year's presidential election, is said to be close to a decision to resign and turn his guns on the president and prime minister.

The most recent leaks to the French press from a criminal inquiry by two magistrates suggest that - despite several denials - President Chirac took a close personal interest in a secret and unorthodox investigation of Sarkozy's alleged financial dealings in 2004.

The allegations against Sarkozy, then emerging as a rival to Chirac for leadership of the centre-right, rapidly proved to be bogus.

It emerged yesterday that Villepin demanded a second, secret investigation by one of the French intelligence services in the summer of 2004, even though the corruption allegations had already been shown to be an elaborate plot.

Villepin faces a confidence vote in the National Assembly next Tuesday.

Many centre-right deputies - disgusted by the affair and alarmed by the angry noises in their constituencies - would like to see the Prime Minister sacked before then.

If President Chirac forces his parliamentary troops to support Villepin, he faces the likelihood of a dramatic and noisy exit from the government by M. Sarkozy.

The French centre-right - already humiliated by the allegations of skulduggery amongst its leaders - would then be publicly split down the middle less than a year before the presidential elections.

In a further bizarre, development, another investigating magistrate has admitted that he knew all along the identity of the source of the bogus corruption allegations in 2004, implicating M. Sarkozy and scores of other political and business figures.

The judge, Renaud Van Ruymbeke, had previously insisted that the information came to him in letters and a CD-rom, from a "corbeau" (crow) or anonymous whistle-blower.

He has admitted to two other investigating judges, Jean-Marie d'Huy and Henri Pons, that he knew all along that the source of the information was Jean-Louis Gergorin, a senior executive at EADS, the company which makes the European Airbus, and a friend and former boss of Villepin.

Judge Van Rumbeke now, himself, faces investigation and a possible legal or professional sanction.

The convoluted, but explosive, affair involves all the traditional ingredients of a French, political scandal: misuse of the intelligence services; rivalries within the defence procurement industry; and poisonous hatreds between nominal colleagues within the French government.

Coming on top of the suburban riots last Autumn, the street protests against a new employment law, and the rejection of the proposed, European Union constitution, the so-called "Clearstream Affair" threatens to snap the final threads of patience of the French electorate with President Chirac.

Worse, it threatens to compound the cynicism of centre-right voters towards the ruling class and pile up votes for the xenophobic Far Right in next year's elections.

The affair takes its name from Clearstream International, a clearing bank in Luxembourg, which was alleged in 2003-4 to hold undeclared accounts for up to 100 political and business figures in France and members of the intelligence services.

The information, sent to Judge Van Ruymbeke in May and June 2004, proved to be utterly false, using real bank account numbers and trumped up names.

Two judges were appointed a year ago to investigate the deliberate attempt to blacken the name of Sarkozy and the others.

In March of this year, they discovered that in January 2004 - four months before the allegations were sent to Judge Van Ruymbeke - the same bogus lists of Clearsteam bank accounts were at the centre of an unofficial and highly unorthodox investigation requested secretly by Villepin, who was then foreign minister.

Testimony to the judges by the intelligence office charged with this secret investigation, General Philippe Rondot, has been comprehensively leaked to the French press (and especially Le Monde) in the last two weeks.

The general's testimony, and notes made at the time, seized by the judges, suggest that he was asked to investigate the political implications of the lists of off-shore accounts, and especially the involvement of Sarkozy.

Both Chirac and Villepin have repeatedly denied in recent days that they conducted an investigation into their colleague and rival.

Chirac has said that he had no knowledge of the investigation at all.

In the most recent leak, Le Monde has published details of comprehensive notes kept by the General and seized from his home by the investigating judges in April.

They suggest repeatedly that the "PR" (President of the Republic) had asked for, and was closely following, the general's investigation.

At one point, they quote "DVP" (Doninique de Villepin) as saying that he and the "PR" would "be blown up" if their role in the investigation ever came out publicly.

There is no evidence that Chirac and Villepin initiated the apparent plot to smear Sarkozy.

They do, however, stand accused of seizing on the bogus information, making improper use of intelligence services, pursuing the false allegations when they knew they were false and trying to make sure that they were leaked to the press.

- INDEPENDENT