June 29, 2005

French finance minister fights to clear his name

By Timothy Heritage

PARIS (Reuters) - French Finance Minister Thierry Bretonsought on Wednesday to clear his name and prevent any threat tohis political career after police searched offices at hisministry and companies he used to work for.

A source close to the investigations said police hadsearched offices at electronics company Thomson, which Bretonused to head, in addition to offices at his ministry and theheadquarters of chemicals firm Rhodia on Monday.

In his first public comments on the search of Rhodia'soffices, Breton told Europe 1 radio: "I have really donenothing wrong in this affair."

Asked about the potential political consequences, hereplied: "I am fighting my corner."

Breton headed Rhodia's audit committee during 1999-2002,the period under which its accounts are being investigated forsuspected inaccuracies.

Breton said he was only one of 10 administrators of Rhodiaat the time. Le Monde newspaper quoted him as saying he was thevictim of "an implausible manipulation that makes me sick."

He told Europe 1 he had been "flabbergasted" when helearned of the police searches while visiting New York, andthat police had asked for the password of his personalcomputer. He did not deny his home had also been searched whenasked about this.

Breton, 50, faces the risk his work will be overshadowed bythe investigations as the government struggles to revive thesluggish economy and oversees a key privatisation program.

His predecessor, Herve Gaymard, resigned on Feb. 25 afterthree months in office because of a scandal over his state-paidluxury flat. Breton was the fourth finance minister in a year.


The government's left-wing foes have asked Breton for anexplanation, but no one has demanded the former France Telecomchairman quit and police have not pressed charges against him.

Any doubts about Breton's future would be another blow toPresident Jacques Chirac, who has already been undermined byFrench voters' rejection of the European Union constitution.

A Socialist Party leader, Jean-Marc Ayrault, said theRhodia affair "has weakened the minister."

Government spokesman Jean-Francois Cope denied this. ButLes Echos financial newspaper said: "In the middle of preparingfor the 2006 budget, the minister risks being weakened from nowon by these affairs."

Legal sources said Monday's search at the Finance Ministryhad been requested by examining magistrate Henri Pons, who isco-leading the investigation into Rhodia's accounts.

Breton's lawyer, Claude Serra, said he hoped the searchwould clarify matters and that "the foreseeable repercussionsof this move would appear disproportionate in relation toThierry Breton's involvement in the Rhodia matter."

The source close to the investigations said police had alsosearched the headquarters of Thomson and Canal Plus televisionin a probe into Thomson's purchase of a Canal Plus subsidiary.

Breton said the deal was completed in January 2003, when hewas no longer at Thomson and was already at France Telecom. Hesaid he had "no personal interest" in the deal.

Breton won a reputation as a tough cutter of corporate debtas head of France Telecom, and as minister has made clearefforts to avoid controversy.

He is trying to boost growth, cut 10.2 percentunemployment, rein in France's budget deficit and oversee theprivatisation or partial privatisations of state energyutilities and road companies to raise funds to cut the publicdebt.