French political scandals hit left and right

by Catherine Bremer

(Reuters) - A budget minister stashing cash in Switzerland, accusations that politicians tapped a senile heiress for campaign funds and allegations that a 403 million euro payout to an ex-convict businessman was rigged; French politics seems awash in sleaze.

President Francois Hollande may pay dearly for the spectacle of public figures grilled over scandals that highlight wealth swilling about the corridors of power while France at large suffers tax hikes and unemployment. But his potential rival at future presidential polls, Nicolas Sarkozy, fares little better

A survey by pollster BVA found 7 in 10 respondents view most politicians as corrupt. Yet among the lower-paid workers Socialist Hollande wants to keep behind him, honesty is the top quality they want in their leaders - even ahead of competence.

"Sleaze is not new, but people's tolerance is lower than it used to be. When the cake is smaller, you get angrier when you see it divided into unequal parts or if someone takes a piece illegally," said political analyst Yves Sintomer.

"Surveys show a growing distrust towards politicians."

Hollande, his popularity further imperiled by a looming pension overhaul likely to stir street protests, faces a test early next year with municipal and European elections

The rash of scandals making headlines this month has tarred left- and right-wingers alike, despite Hollande's promises to clean up political life when he defeated conservative Sarkozy in May 2012.

Disgruntled voters are already shifting behind the far-right National Front, which scored a resounding 47 percent in a by-election runoff in a southwestern town this month, and calls from parliament this week for further tax rises will not help.

"When people feel that everybody is corrupted more of them are going to vote for an anti-system party," said Sintomer.

Last week, TV viewers watched Hollande's ex-budget minister Jerome Cahuzac squirm as a parliamentary panel asked why he hid a Swiss bank account. On a different channel another black sheep Socialist, Dominique Strauss-Kahn, fielded Senate committee questions about the role ofbanks in tax evasion.

The sight of Strauss-Kahn, whose glittering career as IMF head and presidential hopeful came to a juddering halt over a 2011 sex scandal involving a New York hotel maid, and the hand-wringing Cahuzac on show together was excruciating for Hollande.

DREADFUL WEEK

The same week, tycoon Bernard Tapie, a onetime Socialist minister who switched sides to support Sarkozy's 2007 election bid, was interrogated over four days in custody in a probe into an arbitration payment he received once Sarkozy was president.

That case has sucked in France Telecom CEO and former finance ministry official Stephane Richard, now under formal investigation, and his boss at the time, conservative ex-finance minister and current IMF head Christine Lagarde.

"It was an absolutely dreadful week for our institutions. We are promised more tortuous episodes and all people really know is that in these cases it's the taxpayer who pays," said Christophe Barbier, editor of news magazine L'Express.

A 70-year-old with a mop of dyed caramel hair, Tapie became a self-made business tycoon after dropping early dreams of being a pop star or racing driver. An owner of sports teams, he was briefly jailed in 1997 on a soccer match-fixing conviction.

The probe into the 2008 payout to settle a dispute with a state bank over a share sale is one of several affairs weighing on Sarkozy's hopes of staging a comeback for the 2017 election.

In a combative TV appearance, Tapie, who embodies the kind of opulent lifestyle many French revile, said he was blameless. But the investigation could still be politically damaging for Sarkozy, despite the fact that he was covered by presidential immunity at the time of the affair.

In a separate sleaze affair last week, investigating judges recommended Sarkozy be dropped from an investigation into whether L'Oreal heiress Liliane Bettencourt was duped into handing over money to fund his 2007 election campaign.

But another case returned with reports that a Lebanese businessman had admitted paying illegal kickbacks to fund the presidential campaign of ex-prime minister Edouard Balladur in 1995, when Sarkozy was budget minister and campaign spokesman.

(editing by Mark John and Ralph Boulton)