From today's International Herald Tribune:
PARIS Prime Minister Dominique de Villepin of France said Monday that he was determined to stay in office despite mounting pressure on him to resign in connection with a dirty-tricks campaign targeting his chief rival, Interior Minister Nicolas Sarkozy. A five-year investigation into what is known as the Clearstream affair suddenly turned into a full-blown political scandal Friday, when Le Monde reported that Villepin, instructed by President Jacques Chirac, had ordered a corruption inquiry into Sarkozy. In a measure of how much the affair has rattled the government, both Villepin and Chirac took the unusual step of formally denying the allegations. On Monday, Villepin's office said that the prime minister was ready to testify if investigators summoned him and that he was not planning to step down. "He is determined to stay because he has done nothing wrong and has nothing to hide," said Véronique Guillermo, Villepin's spokeswoman. "A reshuffle is not on the table." But so far this and previous statements have done little to calm the political upheaval the affair - already dubbed by some pundits as the French Watergate - has caused. Coming barely three weeks after the government was defeated by street protests over a youth jobs law and 12 months ahead of presidential elections, the scandal risks overshadowing the last year of Chirac's presidency and is what many regard a blow to Villepin's presidential aspirations. Julien Dray, spokesman for the opposition Socialist Party, said over the weekend that Chirac should act swiftly. "Perhaps he should separate right away from his prime minister," Dray said. "Perhaps he should envisage new elections." Even in Villepin's own center-right party, several lawmakers grumbled that he should step down before the scandal sapped the party's chances in next year's elections. The scandal began in 1991, when France sold six frigates to Taiwan in a deal worth $2.8 billion. Ten years later, a judicial inquiry was opened into allegations that French officials and industrialists had received kickbacks from the deal. Then, in April 2004, the judge in charge of the investigation, Renaud Van Ruymbeke, received an anonymous letter and a CD-ROM accusing Sarkozy and several other high-level politicians and businessmen of benefiting from such kickbacks and channeling the payments into secret bank accounts through a clearinghouse based in Luxembourg called Clearstream. It took Ruymbeke one year to establish that the accounts were nonexistent, sparking the latest and most politically charged question: Who sent that CD- ROM with the apparent intention of tarnishing Sarkozy's name and crippling his presidential ambitions? Villepin's name came up officially for the first time in the sworn testimony of a retired intelligence officer on March 28, testimony which was subsequently leaked to Le Monde. General Philippe Rondot, a respected French spy who tracked down the terrorist Carlos the Jackal, said that Villepin had asked him in January 2004 to investigate the corruption allegations against Sarkozy, the newspaper said. Villepin, who was foreign minister at the time, responded with a statement last Friday confirming that he had asked Rondot to conduct an investigation into the Clearstream affair but denying that Sarkozy's name was mentioned. Providing some comfort to Villepin, Rondot has made it known that he was "scandalized" by Le Monde's account of his testimony, which he called "biased." But a note that the general made to himself after his conversation with Villepin in early 2004, and that was subsequently confiscated by investigators in a string of recent raids targeting the Defense Ministry, the Foreign Ministry and the Interior Ministry, appears to show that Sarkozy's name came up. The memo read: "Political stake: N.Sarkozy. Fixation on Sarkozy (re: conflict J. Chirac/N. Sarkozy)." As Villepin braced for questions in Parliament on Tuesday, speculation mounted over who would succeed him if he were forced to step down. There is no obvious answer. Two names have circulated in the French media ever since the recent protests over the jobs law: Defense Minister Michèle Alliot-Marie and Sarkozy himself. Both were already among the favorites for the post after last year's no-vote in the European referendum, when Villepin was appointed. But Alliot-Marie may be too closely associated with the Clearstream herself: Before retiring last December, Rondot was one of her advisers, though she claims to have been completely unaware of the investigation he was conducting. Sarkozy's advisers say that his being appointed prime minister would jeopardize his chances for president next year. Indeed, some say he may leave the government altogether to disassociate himself from the final days of the Chirac era and concentrate on his campaign. "At this point, the earlier he leaves the better," said Manuel Aeschlimann, chief campaign strategist for Sarkozy's Union for a Popular Movement party. "Given how deplorable the image of the government is, it is in his interest to differentiate himself."