'Watergate' shakes Paris, but not voters

The 'Clearstream affair' implicates Chirac, Villepin in a smear campaign.

And it has been shaking Paris for nearly a month, as daily revelations add to the Byzantine complexity of the allegations swirling around President Jacques Chirac and his prime minister, Dominique de Villepin.

DOMINIQUE DE VILLEPIN: French prime minister has denied any wrongdoing in the scandal. REMY DE LA MAUVINIERE/AP

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But though the "Clearstream affair" has been branded "the French Watergate," most French voters remain unmoved. The reasons why provide grounds for both hope and misgivings about the health of French democracy.

On the one hand, pollsters have found, most people wish their politicians would stop obsessing over the latest scandalous twist in the affair and offer instead some ideas about the grave issues facing French society, such as its economic decline, unemployment, and its place in the world.

"That is the good news," says Philippe Manière, head of the Montaigne Institute, a think tank in Paris. The bad news, he adds, is that "the French public has become as cynical as its political leaders."

The allegations of misdeeds at the pinnacle of government "do not interest people much because they see them as business as usual," Mr. Manière suggests.

Headwaters of the scandal

Clearstream is the name of a banking clearing-house in Luxembourg. In 2004, an anonymous informant provided French judges with alleged lists of secret Clearstream accounts that suggested senior French politicians had used them to stash illegal kickbacks from a 1991 sale of frigates to Taiwan - a deal that had already been under investigation for several years.

Among those politicians was Nicolas Sarkozy, now the interior minister, and - then as now - the daggers-drawn rival of Mr. Villepin, who is Mr. Chirac's favorite to succeed him as president at elections next April.

Judicial inquiries have found the lists of accounts to be faked. One question is who faked them, and why. The anonymous informant turns out to have been Jean-Louis Gergorin, vice- president of the European aerospace and weapons firm EADS and an old friend of Mr. Villepin's.

Evidence given to investigating judges, and then leaked to the press, also shows that in January 2004, Villepin - at the time foreign minister - asked a senior intelligence agent, Gen. Philippe Rondot, to privately investigate the possibility that Mr. Sarkozy held a secret foreign bank account. General Rondot's notes of his meeting with Villepin indicate that President Chirac had approved this request.

Rondot's investigation, and a subsequent investigation by the official domestic intelligence agency, concluded that the lists were bogus. Villepin, however, did not tell Sarkozy for 15 months - until late last year - that his name had been cleared.

The implication of the revelations is that Villepin, with Chirac's knowledge, tried to smear Sarkozy by secretly gathering damaging information about him, and then kept quiet when the information proved false. Sarkozy has since filed a suit for defamation against whoever concocted the Clearstream lists.

Judges are still investigating the origins of those lists and the government has called for an investigation of the recent leaks of judicial evidence, particularly that provided by Rondot. It was the general's evidence, published at length in the daily Le Monde over the past month, that has heightened the scandal's profile and distracted politicians.

"This is no longer a government, it is a battlefield," opposition Socialist party leader François Hollande charged during a no-confidence motion he brought before parliament last week. Though the motion failed, the debate highlighted Villepin's isolation: more than 200 of his fellow party members ostentatiously stayed away from the chamber during the prime minister's speech.

Possible boon for extreme right

Villepin's chances of becoming the ruling UMP's presidential candidate next year now appear slim, at best. But he is not the only one to have suffered a blow to his prestige. The whole political class, and especially those politicians currently in power, have been tarred with the Clearstream brush.

Among the general public the complexity of the case means "there is a vague sense that bad things have been happening, that people at the top have been misbehaving, but nobody really knows what has been going on or who is responsible," says Jean-Luc Parodi, who teaches politics at the Political Studies Institute in Paris.

"That plays against everyone who embodies politics or power," he adds. An opinion poll published last week found that 69 percent of the French trust neither the right nor the left to lead their country.

That has raised fears among mainstream politicians that outsiders such as extreme-right leader Jean-Marie Le Pen might take advantage of the scandal. President Chirac, condemning what he called a "dictatorship of rumors" last week, warned that the leaks risked making voters "despair of politics."

"Le Pen denounces all politicians as rotten, and everything we see seems to be going in that direction," says Paul Godt, a professor of politics at the American University of Paris. "It just seems to confirm Le Pen's analysis."

Not a hot watercooler topic

French voters are confused by the Clearstream affair but so unsurprised by it that only 17 percent of them discuss the scandal over the watercooler, according to Stéphane Rozès, an analyst with the CSA polling firm.

That is partly because the French have always expected self-interest, not morality, to govern politics, he says. But more important, he adds, the lack of interest illustrates how "the French have recently started to expect more of their politicians. They want them to resolve questions about our social model, our place in the world, about change. They don't want to see political debate diverted to secondary issues, and they see this as a secondary issue."

"Social anxieties trump scandal," agrees Mr. Parodi. Especially, he adds, when the scandal "is neither comprehensible nor easily blamed on anyone in particular."