Police question French minister in L'Oreal affair

Police on Thursday questioned the French labor minister about his relationship with the billionaire L'Oreal cosmetics heiress in an investigation into a scandal that has reached the highest levels of President Nicolas Sarkozy's government.

Opposition lawmakers are demanding Eric Woerth resign from the government. They accuse him of being involved in illegal financing as treasurer for Sarkozy's conservative political party and of conflict of interest because his wife worked as an investment advisor to the heiress, Liliane Bettencourt, reportedly the wealthiest woman in Europe. Sarkozy has called the claims a smear campaign.

Police questioned Woerth at the Labor Ministry from early morning to late afternoon. He denied all allegations, his lawyer said.

The session was long "because Eric Woerth has long wanted to give the needed explanations to put an end to some of these rumors, which are nothing but fantasies," his lawyer, Jean-Yves Le Borgne, said after the questioning ended.

"He denied receiving financing other than that authorized by the law," the lawyer told reporters, referring to suspicions Woerth received funds from Bettencourt to illegally finance Sarkozy's election campaign.

"He explained that at no moment did he intervene to get his wife hired" by the man handling Bettencourt's financial affairs, the lawyer said.

Secret tapes recorded by Bettencourt's ex-butler and made public in leaks to the media suggested that she hid millions of euros in Swiss bank accounts to avoid paying taxes, and led to allegations of tax evasion and illegal financing of Sarkozy's conservative party ahead of the 2007 presidential election.

Woerth's name was cited in the recordings, which suggest that the minister pressured the heiress' financial team into hiring his wife. Florence Woerth worked as an investment adviser for Bettencourt from 2007 to the end of June 2010, resigning after the scandal broke.

The couple have denied any conflict of interest, and a French financial investigation agency has said Woerth did not intervene in Bettencourt's tax files.

Woerth has long been treasurer of Sarkozy's party, but he has submitted his resignation, which will be effective at the end of July.

Florence Woerth was questioned a week ago as a witness into a separate investigation into the tapes. Her lawyer, Antoine Beauquier, said after her questioning that there was no conflict of interest and no intervention to get her hired.

A former accountant, Clair Thibout, accused Woerth of clandestine financing in January 2007 of Sarkozy's presidential campaign. She claimed the man handling Bettencourt's fortune, Patrice de Maistre of the Clymene company, asked for euro150,000 for Woerth. Sarkozy denies the claim.

Bettencourt, Europe's richest woman according to Forbes, has a fortune estimated at $20 billion, and is one of France's biggest taxpayers. Bettencourt herself was questioned Monday at her home in the posh Paris suburb of Neuilly.

On Wednesday, police searched the home of Bettencourt's daughter. Francoise Meyers-Bettencourt accuses photographer Francois-Marie Banier of abusing her mother's alleged mental frailty - and bilking the elder heiress out of euro1 billion in cash, artworks and other gifts. That case touched off the broader scandal.