SARKOZY DROPS BALLAST—BUT HIS SHIP IS STILL SINKING

French President Nicolas Sarkozy is rearranging the deck chairs on the Titanic.

Under pressure to dismiss Labor Minister Eric Woerth, who is ensnared in a double conflict of interest (see following post), Sarkozy yesterday threw some ballast overboard by firing two second-echelon cabinet members: Secretary for Cooperation Alain Joyandet and Secretary for the Paris Region Christian Blanc.

Both men had sinned by wasting taxpayer money at a time when the government is calling for austerity and belt tightening. Joyandet had hired a private jet to attend a conference in Haiti at a cost of some $150,000, while Blanc spent $15,000 of state money on Havana cigars. Revelations about the two men's profligate ways caused a public furor and led Sarkozy to announce a draconian slash in his cabinet members' perks and operating budgets. (The austerity apparently does not apply to Sarkozy himself, who has seen his own salary increase by 150% and has recently ordered a brand new presidential plane to compete with Air Force One. Price: more than $200 million.)

Sarkozy (current approval rating: around 30%) is gambling that the dismissals and cutbacks will deflate public indignation and political opposition over the Woerth-Bettencourt scandal (see blow). But in a week in which it was revealed that Liliane Bettencourt, France's richest woman, received a $40 million tax rebate while Woerth was Budget Minister, it seems doubtful that Sarkozy's gambit will work.

Stay tuned.

SOMETHING SMELLS ROTTEN IN THE STATE OF FRANCE

Imagine that an important U.S. cabinet member is also the treasurer and chief fund raiser for the Republican Party. Now imagine that this same pubic servant has a wife who is a financial advisor for a firm that manages the fortune of the wealthiest woman in America. Now imagine that this wealthy woman's butler secretly records telephone conservations between her and her financial advisers indicating that they are involved in massive tax evasion, and that she is discovered to have $100 million stashed away in tax-sheltered Swiss banks accounts. Finally, imagine that this same cabinet member is the key player in pushing through a controversial pension reform that will require his countrymen to tighten their belts and work two years longer before they can retire. How long after these revelations would an American President allow this cabinet member to keep his job? My guess: 24 hours.

But French President Nicolas Sarkozy, faced with precisely this situation, declares that he retains "total and complete" confidence in his embattled Labor Minister, Eric Woerth. Though no one has proved that the Minister or his wife have broken any laws, the strong presumption of conflict of interest, and possible wrongdoing, might preclude a more cautious President from expressing such unconditional loyalty. (Remember how quickly Obama dropped Sen. Tom Daschle as his pick for Secretary of Health and Human Services in 2008 when questions emerged about Daschle's underpaid taxes.)

Here are the facts in the French case:

Woerth's wife, Florence, works for the management company that handles the finances of Liliane Bettencourt, 87, heiress to the l'Oréal fortune. Now Florence Woerth's boss, Patrice de Maistre, is a friend of Eric Woerth (who decorated him with the Legion of Honor last year). De Maistre is just one of Woerth's many friends among the mandarins of France's financial, industrial, and business elite. These contacts are quite useful to Woerth when he dons his fundraising hat as treasurer of Sarkozy's UMP party. Sound complicated? Perhaps a little. Does it raise ethical questions? Big time.

I'd like to think that such a situation in the U.S. would lead to a prompt dismissal or resignation once the facts were revealed. But maybe I'm wrong. Remember Dick Cheney hunting with Supreme Court Justice Antonin Scalia, or his inviting the top honchos of the oil industry to help make U.S. energy policy (while refusing to reveal their names), or his ties to Haliburton at a time when that company was getting major no-bid contracts in Iraq—or, for that matter, Clinton's pardon of fugitive financier Mark Rich. The memory of such shameful episodes makes me reluctant to point my finger at the French. So I'll point it instead to all those public servants who cozy up to wealth and power and show contempt for the interest and opinions of the people they govern. J'accuse!