L'Oreal Heiress's Gift Trial Embroils French President Sarkozy, Companies

Recordings of L’Oreal SA heiress Liliane Bettencourt’s conversations about political dealings and Swiss bank accounts may prompt the postponement of a trial over whether the 87-year-old was manipulated into giving a friend about a billion euros ($1.23 billion) in gifts.

The tape recordings, made in secret by a former butler beginning in May 2009, have drawn politicians including French President Nicolas Sarkozy and Labor Minister Eric Woerth into the family dispute and raised questions about whether tax authorities ignored reports Bettencourt had 78 million euros hidden in Swiss accounts.

“This is unheard of,” said Laurent Dubois, a professor at Paris’s Institute of Political Studies. “This is the first and only time, all in the public sphere,” to have such a blend of business, family and political dramas, he said.

The trial is the culmination of a private prosecution by Bettencourt’s only child, Francoise Bettencourt Meyers, against photographer and author Francois-Marie Banier. She says Banier manipulated her mother’s infirmity for art, real estate, cash and insurance policies. The trial over those claims will provide a glimpse into one of Europe’s most prominent families.

At the trial’s opening today, Banier’s lawyer Herve Temime asked for a postponement to give him time to review the tapes. Meyers’s lawyer Olivier Metzner improperly sent the “explosive documents to the press before sending them to” other parties in the case, he said, adding the whole affair was “nauseating.”

Photographer: Antoine Antoniol/Bloomberg

Francois-Marie Banier, photographer and writer, leaves the courthouse in Nanterre. Close

Francois-Marie Banier, photographer and writer, leaves the courthouse in Nanterre.

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Photographer: Antoine Antoniol/Bloomberg

Francois-Marie Banier, photographer and writer, leaves the courthouse in Nanterre.

Investigation Under Way

Judge Isabelle Prevost-Desprez said she would rule on the postponement request later today. Prosecutor Marie-Christine Daubigney, who has opposed Meyers pressing the case, supported the delay, as did Metzner, who said the most important thing was “the full truth and total transparency.”

“The investigation is already under way” into how the tapes were made, Daubigney said, adding the trial should wait for the probe’s conclusion. “The recordings were made under misleading conditions.”

Bettencourt’s lawyer, Georges Kiejman, reiterated a request to dismiss the complaint.

“Don’t mix yourself in a family drama,” he told the court.

Metzner asked to have the tapes played during the trial, allowing Bettencourt to be heard directly rather than have her mental capacity and independence assessed through comments by friends and employees.

‘This Is Real’

“All of this is recorded, all of this is real,” he said.

Bettencourt, Europe’s wealthiest woman, won’t testify and refused to accede to medical exams from doctors selected by the court and prosecutor.

“Liliane Bettencourt is at the center of a plot to humiliate her, to steal her dignity,” Kiejman said.

Meyers wants the gifts returned to donate them to charity, not for herself, Metzner said. She asked for 1 euro in damages for herself as a “symbol,” according to the court filing.

Kiejman turned to Metzner at one point and handed over a check for 1 euro he said Bettencourt wrote to give to her daughter to end the matter. Metzner tore up the check.

Bettencourt says her gifts to Banier are closer in value to 450 million euros, “very far from one billion,” according to a spokeswoman who declined to be identified.

Banier, 63, first met Bettencourt and her late husband in 1969, and befriended the heiress after photographing her for a 1987 profile in French society magazine, Egoiste. Banier has denied Meyers’s allegations, calling it “a very sad affair,” according to an interview in French newspaper Le Monde in December.

Heads and Houses

He sat erect through most of the hearing, wearing a dark suit and tie with a blue shirt. While Metzner spoke, he took out a sketchbook and began drawing pictures of heads and houses and circles that were visible from the public seating area.

In excerpts from the tapes, made available on French website Mediapart last month, Bettencourt is heard asking an adviser why she should make donations to Sarkozy and Woerth, whose wife Florence advised the heiress on finances. Woerth, the budget minister at the time, had initiated a clemency program to allow tax dodgers to report foreign tax shelters.

Woerth’s wife has since left her advisory job. Woerth has said neither he nor his wife did anything improper and that he had no say in tax-probe decisions. His spokesman at the Labor Ministry didn’t respond to a request for comment. Current Budget Minister Francois Baroin has said his agents are reviewing Bettencourt’s filings and assets.

According to the 2009 annual report, the Bettencourt family holds a 31 percent stake in L’Oreal. Meyers, her husband and Bettencourt are all directors of the world’s largest cosmetics maker. The company isn’t involved in the case.

“This is a private affair,” said Stephanie Carson-Parker, a spokeswoman for L’Oreal.

Banier could face as much as three years in prison and a fine of 375,000 euros if found guilty.

To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net

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