Tapie tax arrangements in spotlight again

Examination of controversial businessman’s tax file details his quest to whittle down taxes on compensation settlement

Most people, if awarded €405 million in what magistrates have since called a “sham arbitration”, would probably have paid the 33.3 per cent corporate tax rate the government was asking.

Not Bernard Tapie, tax fraudster, ex-convict and friend of Nicolas Sarkozy, whose political support for the former French president was so richly rewarded in a 2007 out-of- court settlement that France's socialist government is trying to reverse.

In the latest Tapie scandal, Libération examined the controversial businessman's tax file and reported his successful nine-month quest to whittle down his tax liability on the settlement.

International Monetary Fund director Christine Lagarde, French finance minister at the time of the settlement, had said Tapie would retain "only" some €30 million once he had settled his debts and tax bill. But the amount eventually paid by Tapie – €11.2 million – was €54 million less than the most lenient offer made by the budget ministry – and about €89 million less than the more exacting of two proposed solutions.

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Despite a tax break worth tens of millions of euros granted by Sarkozy’s former budget minister, Éric Woerth, Tapie has again claimed he is a victim. He insists the €405 million should have been taxed at a capital gains rate of 1.67 – in other words, that he should have paid only €6.76 million in tax.

With his habitual blend of intimidation, red-carpet treatment and appeals to higher authority, Tapie began lobbying to minimise his tax within days of the arbitration result. He met Woerth on Bastille Day, then met three key figures in the tax administration and Lagarde’s cabinet director. A few months later Tapie invited the head of the relevant tax unit, along with Woerth’s cabinet director, to dinner at Chez Laurent, one of Paris’s most expensive restaurants.

The civil servants proposed more and more favourable deals but Tapie refused all of them and afterwards complained to Claude Guéant, Sarkozy’s chief of staff. The tax administration’s legal director complained that Woerth’s 2009 letter settling Tapie’s tax bill abandoned negotiating positions, including the demand that Tapie pay other outstanding taxes totalling €30 million.

Tapie served six months in prison in 1997 for fixing a football match; he has a conviction for tax fraud and he was again placed under investigation for tax fraud on September 13th. He has been ordered to pay €15.9 million in back taxes for 1989 and 1991.

Yet Tapie remains France’s favourite crook. He received bags of fan mail daily at La Mandala, his €48 million villa overlooking St Tropez, last summer. The government has frozen most of his assets but well-wishers reportedly send him cash and cheques.

Woerth, meanwhile, is due to stand trial on charges that as Sarkozy’s campaign treasurer he accepted illegal cash contributions from Liliane Bettencourt, France’s richest woman.

Lara Marlowe

Lara Marlowe

Lara Marlowe is Paris Correspondent of The Irish Times