Pressure builds on Hollande over tax fraud scandal

Pressure was building on French President Francois Hollande on Thursday over a disgraced ex-minister's secret foreign bank account, as it emerged that his one-time campaign treasurer was a partner in companies registered in the Cayman Islands. With Hollande away in Morocco on a state visit, calls grew at home for top officials in his embattled Socialist government to resign over the scandal that saw former budget minister Jerome Cahuzac charged in a tax fraud probe. Cahuzac -- the minister responsible for cracking down on tax evasion until he resigned two weeks ago -- was charged on Tuesday with "laundering the proceeds of tax fraud" after he admitted to having an undeclared foreign bank account containing some 600,000 euros ($770,000). The former hair transplant surgeon had for weeks repeatedly denied -- to the president, in parliament and in media interviews -- ever having had a foreign account. Critics have accused Hollande and his government of either trying to cover up the scandal or of mismanagement for having believed Cahuzac's denials.The head of the main opposition right-wing UMP party, Jean-Francois Cope, said the government no longer had the credibility to rule. "The only solution possible, the only one, is a major government reshuffle, including the prime minister," Cope said. French newspapers said Hollande was facing his biggest political crisis since taking office, with popular daily Le Parisien saying the situation had become "untenable" for the government. A source close to Housing Minister Cecile Duflot, one of two ministers from the Greens party in Hollande's government, said she had demanded "a strong political response" to the scandal during a cabinet meeting on Wednesday. Adding to Hollande's woes, Le Monde newspaper reported that his campaign treasurer for last year's presidential vote, 59-year-old businessman Jean-Jacques Augier, had joint ownership of two firms registered in the Cayman Islands, a well-known tax haven. Augier confirmed the existence of the firms and said they had been set up to form partnerships with foreign entrepreneurs. "There is nothing illegal," Augier told Le Monde, which carried out the probe with the Washington-based International Consortium of Investigative Journalists and other international media. "My adventurous nature is responsible. Maybe I lacked a bit of caution," he added. Hollande appeared on national television Wednesday to address the Cahuzac scandal, vowing a new law within weeks on the "publication and control" of the wealth of ministers and parliamentarians. He said he knew nothing of the foreign account and that Cahuzac "did not benefit from any protection" from the government. The government was struggling to contain the scandal on Thursday, with ministers insisting it did not go beyond the actions of one man. "This was a very serious individual failure. This was not a system of corruption in a party, group or the state," Cahuzac's replacement as budget minister, Bernard Cazeneuve, told Europe 1 radio. Opposition lawmakers have called for a parliamentary probe into the scandal and an opinion poll showed nearly two-thirds of respondents saying the government has handled the situation badly. Hollande had promised a government of unimpeachable morals after his predecessor Nicolas Sarkozy was embroiled in a series of corruption and influence peddling investigations. The tax scandal is further damaging the standing of Hollande, who is languishing in opinion polls less than a year into his five-year term. A TNS Sofres poll released Thursday but conducted before the scandal erupted showed Hollande's approval rating at only 27 percent. Cahuzac, 60, announced his resignation on March 19 after prosecutors opened a probe into the account, first revealed by the investigative Mediapart news website in December. He met with investigators on Tuesday, admitted to having had the foreign account for around 20 years and said in a statement that he was "devastated by guilt".