Blow for Hollande as ex-minister charged in tax fraud probe

PARIS - Agence France-Presse

A file picture taken on January 4 at the Elysee presidential Palace in Paris shows French President Francois Hollande (L) listening to French Junior Minister for Budget Jerome Cahuzac. Cahuzac resigns on March 19, prosecutors begin an investigation into an alleged secret Swiss bank account, over suspected tax fraud and money laundering centering on him.

France's ex-budget minister Jerome Cahuzac was charged April 2 in a tax fraud probe after he admitted having a foreign bank account, dealing a fresh blow to President Francois Hollande's embattled government.

Critics were quick to pounce on the scandal, demanding to know if Hollande or other top officials were aware of the account held by the minister once responsible for cracking down on tax evasion.

In a contrite statement on his website, Cahuzac admitted to having had the foreign account for around 20 years and said he was "devastated by guilt".

The ex-minister's lawyer, Jean Veil, said Cahuzac had been charged with "laundering the proceeds of tax fraud" and would cooperate with investigators.

Cahuzac -- the first minister in Hollande's administration to face a criminal probe -- said he had met with investigating magistrates Tuesday and admitted to having a foreign account.

Cahuzac said the account contained about 600,000 euros ($770,000), had not been touched in about a dozen years and that he had ordered the funds transferred to his French account.

His lawyer said the account, originally opened in Switzerland, had been transferred to Singapore in 2009 and that the amount laundered was equivalent to about 30,000 euros.

Cahuzac begged forgiveness from Hollande, his former government colleagues, fellow lawmakers, French voters and his family and his friends.

"I was caught in a spiral of lies and lost my way. I am devastated by guilt," he said.

"It was an unspeakable mistake to think that I could avoid confronting a past that I wanted to consider behind me. I will now face this reality with all transparency." Hollande, languishing in the opinion polls less than a year into his five-year term, said his former minister had committed an "unforgivable moral error" and that the courts would decide his fate.

May face five years of prison

"Lying is not acceptable in a democracy," Prime Minister Jean-Marc Ayrault added in a statement. "It is now up to him to fully take responsibility before the justice system." Hollande had promised a government of unimpeachable morals and critics wasted no time Tuesday in jumping on the scandal.

"The president must assume his responsibilities in the face of this State lie and explain himself before the French people," the head of the main opposition right-wing UMP party, Jean-Francois Cope, said in a statement.

Cahuzac announced his resignation on March 19 after prosecutors opened a probe into the account, first revealed by the investigative Mediapart news website.

The site released an audio recording reportedly of Cahuzac admitting to having the account with Swiss bank UBS. In the recording, a man is heard saying: "It bothers me to have an account there, UBS is not necessarily the most hidden of banks." Little-known before being named a minister, Cahuzac, 60, began his career as a cardiologist before switching to the more lucrative world of plastic surgery, in particular hair transplants.

Elected to the National Assembly in 1997, he headed its commission on public finances and was named budget minister when Hollande formed his first government. If convicted, Cahuzac faces up to five years in prison.