France’s Watergate

The fall-out from the Clearstream scandal hurts the mainstream right

"WATERGATE a la francaise", one opposition leader calls the Clearstream affair. Named after a Luxembourg-based clearing-house, it has all the ingredients of a political thriller: a master spy, anonymous denunciations, defence kickbacks, a smear campaign and fratricidal rivalry. This imbroglio, which touches the heights of the French state, hints at the flavour of politics over the next 12 months, in the run-up to the presidential election.

The story orginates in a judicial investigation, launched in 2001, into kickbacks, linked to the 1991 sale of six French frigates to Taiwan, that were allegedly channelled through Clearstream accounts. In 2004 the judges received anonymously a list of foreign bank accounts linked--falsely, it transpired--to various politicians. One name on the list was Nicolas Sarkozy, the centre-right interior minister and presidential hopeful. The judge swiftly concluded that the list was bogus, and a new investigation was begun into the false accusations.

It is the search for the person who concocted the list that has turned into an affair of state. According to testimony leaked to Le Monde, a left-leaning newspaper, General Philippe Rondot, a retired top spy, told the inquiry that Dominique de Villepin, then foreign minister and now prime minister, had asked him to investigate Mr Sarkozy--on orders from President Jacques Chirac. Mr de Villepin and Mr Chirac each took the unusual step of issuing a communique to deny this claim. Mr de Villepin, already reeling from defeat on the streets over his labour reforms, told a raucous parliament this week that he was "profoundly shocked and hurt" by the "campaign of slander and lies" against him. He flatly ruled out his own resignation.

The details of the scandal remain frustratingly opaque. Mr de Villepin says he never asked General Rondot to dig up dirt on Mr Sarkozy, nor even mentioned his name. General Rondot, described by one source as "a man of honour and integrity", told Le Figaro, a centre-right newspaper, that Le Monde had distorted his testimony. Mr de Villepin had never, he declared, asked him to investigate any political figure. Yet his notes of a meeting with Mr de Villepin, which were seized in judicial raids, read: "Political stake: Nicolas Sarkozy. Fixation with N.Sarkozy (re: conflict Chirac/Sarkozy)". And new evidence leaked to Le Monde this week suggests that Mr Sarkozy was indeed discussed.

Other questions remain. Who forged the list and who were they trying to destabilise? What was the role of executives at EADS, the defence and aerospace firm, whose offices were raided by the judges? They also searched offices at the defence ministry and intelligence headquarters. Mr de Villepin said this week that he would be ready to testify if asked. But rumours and counter-rumours keep flying.

On one level, this is a struggle between two presidential aspirants on the right: Mr Sarkozy and Mr de Villepin. Ever since he returned to the interior ministry last year, Mr Sarkozy has wanted to find out who was behind the smear campaign. He also wanted to know why Mr de Villepin, as interior minister, did not inform him sooner of the allegations, or of the investigation that cleared his name. If Mr de Villepin gained from Mr Sarkozy's discomfort at the time, the reverse is now true: the prime minister's popularity has fallen even below that of the president (see chart on previous page).

On another level, the affair raises institutional questions. If it were true that a leading politician had asked a top spy to snoop on his rival, that would be serious enough. That politicians consider the intelligence services as instruments for political ends is graver still. "In a normal country," commented Francois Bayrou, the centrist UDF leader, "the state is protected from clan warfare. Neither the state nor the secret services should exist to serve clans."

A third uncertainty hovers over the political right. In the past, corruption scandals have damaged the electoral prospects of political parties on both left and right. Often, as the whiff of mouldy politics wafts from the mainstream parties, the beneficiaries are on the political fringes, notably the far-right National Front. Jean-Marie Le Pen, the front's leader, has been quick to capitalise on the mainstream right's woes, lamenting the "state lies" of a "banana republic" government. The more complex the Clearstream affair seems, the harder it will be for ordinary voters to determine who is in the right--and the more likely it is that they will conclude that the whole lot are rotten.