On Wednesday, November 5, 2008, a chauffeur-driven car entered the main gates of the Élysée Palace and crunched across the gravel courtyard. It is here that foreign dignitaries arrive between a double cordon of Gardes républicains with their polished helmets and red plumes to be greeted on the steps by the French president. There was no such ceremony today, for this was a private visit by Liliane Bettencourt and Patrice de Maistre, her unctuous financial adviser. Met by an usher in black tails, the pair was escorted up a white marble staircase to the second-floor office of Nicolas Sarkozy.
The president knew Madame Bettencourt personally, having dined at her home and, like many other politicians, visited her husband during election season. As for de Maistre, Sarkozy did not know him personally, though they had crossed paths at meetings of Sarkozy’s fund-raising Premier cercle club at the Hôtel Bristol. (It happened that Jean-Pierre Meyers was also a member.) The president had accorded this rendezvous as a courtesy to the leading shareholder in a major French company and a former constituent from his days as mayor of Neuilly. He was not informed ahead of time of the exact purpose of the visit.
As Sarkozy described the scene: “I see this grande dame arrive with an elegant man whom I don’t know. I invite her to sit down. I greet her with some personal words, she asks about my family. I ask how she is and she tells me she has big problems with her daughter . . . who is trying to get her declared insane. I asked her what happened. She replied that she had made some gifts to friends and that had provoked a big mess.”
At that point Sarkozy pushed a buzzer on his bronze and rosewood Louis XV desk and instructed his judicial adviser, Patrick Ouart, to join the meeting. A burly man with a boyish, meaty face, Ouart had held high positions in the private sector—including with the LVMH luxury goods group—before Sarkozy brought him into the Élysée. Skirting the normal chain of command, Ouart reported directly to the president and was charged with overseeing some of the government’s most sensitive issues. Working behind the scenes, invisible to the press and the public, he was one of the most powerful and loyal figures in Sarkozy’s constellation. Some said he was the de facto justice minister, the one who told the titular holder of that position what to do.
Ouart had no idea what to expect when he entered the presidential office. “The discussion was led by Madame Bettencourt, an elderly, deaf, and authoritarian woman,” he recalls. “She gave us a summary of the affair, without consulting notes.”
The reason Madame Bettencourt did not use notes was that she had learned by heart a speech that de Maistre had typed out for her. Dominique Gaspard, her chambermaid, had coached her on it until she could repeat it from memory: “I supported you for your election with pleasure, and I will continue to aid you personally. I have grave problems with my daughter that could have consequences for L’Oréal, and thus for the economy of the country.”
As Ouart recalls the meeting, Madame Bettencourt then elaborated on the situation. She told the president her daughter detested her, and wanted to keep her from living her life freely. The whole affair, she said, had been whipped up by her son-in-law, who favored a takeover of L’Oréal by its minority partner, the Swiss food giant Nestlé. At that point, de Maistre jumped in and explained the danger for L’Oréal. If Madame Bettencourt were put under guardianship and declared legally incompetent, he said, Nestlé might be tempted to set aside a shareholder stability agreement and seize control of the company.
“The president was very upset,” Ouart recalls. “The idea of seeing this family tear itself apart publicly seemed preposterous to him.” At the end of the thirty-minute meeting, Sarkozy offered to mediate between Madame Bettencourt and her daughter, and asked Ouart to meet with the lawyers for both sides in an effort to “calm things down.”
It was highly unusual for a president to grant a personal meeting on short notice, and even more bizarre for a head of state to offer his mediation in what, at that point, was a family dispute. But L’Oréal was a major French company, the source of thousands of jobs and hundreds of millions in tax revenues for the state. If there really was a risk of a Swiss takeover, as Madame Bettencourt and de Maistre warned, then that was of concern to the president.
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L’Oréal had come a long way since Eugène Schueller started tinkering with hair dyes in his kitchen laboratory. Under his brilliant successors, François Dalle and Lindsay Owen-Jones, the firm had grown vertiginously, acquiring dozens of brands and pushing into new markets on every continent to become the world’s number-one cosmetics group.
Today the company boasts 82,000 employees in 130 countries, annual sales of more than €24 billion, and consistently strong growth rates. L’Oréal’s recently renovated ten-story Clichy headquarters—with its atrium, landscaped gardens, employee restaurant, and in-house gym—is the hub of an international empire that includes twenty-eight brands. Among them, the cosmetics and perfume divisions of Lancôme, Helena Rubenstein, Maybelline, Yves Saint Laurent, Ralph Lauren, Cacharel, Vichy, the Body Shop . . . L’Oréal’s stock is valued at some €90 billion, of which the principal share belongs to Liliane Bettencourt—or, more accurately, to Françoise Bettencourt Meyers and her two sons, who hold stock as reversionary property and will fully inherit it upon Liliane’s death.
The firm’s future seemed solidly in the hands of the founding family—until the Bettencourt Affair raised the specter of a foreign takeover. That fear had its roots in the politics of the 1970s. In 1972, Socialist leader François Mitterrand signed a pact with the then powerful French Communist Party calling for sweeping nationalizations of major French industrial groups and banks. Fearing a state takeover of L’Oréal if the left came to power, CEO François Dalle proposed a stock swap with the Swiss food conglomerate Nestlé, since a company with a foreign partner would be better protected from nationalization. The deal, which won the blessing of President Georges Pompidou and then finance minister Valéry Giscard d’Estaing, was signed on March 22, 1974. Under its terms, a Bettencourt family holding company, Gesperal, became the majority shareholder of L’Oréal. Fifty-one percent of Gesperal was owned by Liliane Bettencourt, and 49 percent by Nestlé. In exchange, Liliane Bettencourt was granted 4 percent of the Swiss company’s shares. Less than a month later, Pompidou died after a long bout with cancer. In the election to succeed him, Giscard, the center-right candidate, defeated Mitterrand, and the nationalization fears subsided. But by then L’Oréal was tethered to Nestlé via a pact that froze the share ratio for the next three decades.
The arrangement functioned smoothly over the years, with each company holding seats on the other’s board. But there were periodic worries that the Swiss giant, four times bigger than L’Oréal, might one day be tempted to swallow up the French firm. That seemed unlikely as long as the original pact remained in force. It was renewed for five years in 2004, and again in 2009, with the stipulation that neither side could sell its shares or increase its holdings until six months after the death of Madame Bettencourt.
But her daughter’s lawsuit suddenly raised fears that L’Oréal might be put in play. The danger, Ouart explained to Sarkozy, was that if Liliane were found to be mentally incompetent, her votes on the L’Oréal board could be contested. She could also lose her voting rights over her shares, theoretically leaving Françoise free to sell them. In a more drastic scenario, under French law she could be declared “civilly dead,” raising the question of whether the shareholders’ pact with Nestlé would still apply.
How real were these scenarios? Liliane had always sworn that she would never give up the majority of L’Oréal as long as she was alive. Françoise repeatedly declared her own devotion to the family firm and denied any intention of selling to Nestlé. But de Maistre, Liliane’s domineering financial adviser, harped constantly on the notion that Françoise and Jean-Pierre were dealing secretly with the Swiss firm and scheming to sell out. De Maistre even suggested that this was the real reason behind the suit. Knowing the depth of Liliane’s dislike for her son-in-law and distrust of her daughter, de Maistre was able to play on this theme in order to increase his own influence over his employer’s affairs. He also waved this flag repeatedly in his meetings with Sarkozy and Ouart.
Sarkozy’s interest in L’Oréal went beyond jobs and tax revenues. L’Oréal was one of those companies known as a fleuron, or flagship, of French industry. There was something almost mystical about the state’s relationship to these big, historic firms, particularly those with international reach. Apart from the economic power they wielded, they contributed to the nation’s prestige and, in the case of a firm like L’Oréal, France’s identification with beauty, style, and luxury. Cosmetics—like wine, cheese, and haute couture—were central to the national identity. Sarkozy put the matter crudely in a private meeting with his party’s parliamentarians: “I don’t want [L’Oréal] to piss off to Switzerland.”
There may have been another reason for the president to take a personal interest in the case: If Sarkozy, as many suspected, had received illegal campaign contributions from the Bettencourts, it would be dangerous for investigators and the press to start digging through the family’s financial records. Maybe there was a political time bomb lurking in there. For whatever reasons, the president apparently decided it would be better for all concerned if the case were shut down. He did not have the power to do that directly, but he did have at least two throttles that might slow down the machinery: Patrick Ouart, his trusted adviser, and Philippe Courroye, the ambitious Nanterre prosecutor, who had been a personal friend of Sarkozy’s since 2001.
After that initial meeting with Madame Bettencourt and de Maistre, the president instructed Ouart to ride herd on the case. Ouart met no fewer than five times with de Maistre, who had returned for a second Élysée meeting on November 13, and also huddled with Françoise’s lawyers. “I quoted to both parties this aphorism that my grandfather liked to repeat: ‘doing good makes no noise, and making noise does no good.’ But I wasn’t listened to. The war, which had very old psychological roots, was declared and was not amenable to reason.”
As for Courroye, he had launched into the investigation so aggressively that it was hard to put on the brakes. “He had the instincts of a hunting dog,” says Ouart.
Always with an eye on the top Paris prosecutor’s job, Courroye had apparently assumed that the vigorous pursuit of this high-stakes case would help him clinch that prize. Now, nearly one year into his investigation, he started to hear a different message from the Élysée. Since the beginning of their friendship, Sarkozy and Courroye had lunched or dined together once or twice a year. Now, the pace of their meetings picked up dramatically. Over the period of Courroye’s investigation, he met with Sarkozy at least eight times, sometimes arriving furtively by the Élysée’s rear garden so as not to attract the attention of the press. He even dined with Sarkozy on November 5, the day of the president’s meeting with Madame Bettencourt and de Maistre.
What did the two men talk about? “Never about cases,” Courroye insists. “What interested him was to gather ideas about judicial policy, the protection of minors, international judicial cooperation . . .” That strains credulity. Sarkozy is known to be blunt, often abrasive, rarely bending to rules and legal niceties when he wants something. And Courroye, who craved the Paris job, seemed unlikely to tell the president he wouldn’t “go there” when asked about the case. In April 2009, in what some saw as a glaring proof of complicity between the two men, Sarkozy personally pinned the Order of Merit medal on Courroye’s lapel. Speaking at the award ceremony, the president remarked, “People reproach the fact that we know each other, but that doesn’t prevent him from doing his job, nor me from doing mine.”
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On December 1, 2008, the Financial Brigade sent Courroye a seven-page report that summarized their findings after nearly one year of investigation. Their accounting of Liliane’s gifts to Banier dwarfed the amount cited in Metzner’s original dossier: €993 million (worth well over a billion dollars) in artwork, real estate, cash, and life-insurance policies. The report’s conclusion stated that “numerous interrogations” supported a “body of presumptions concerning the reality of an abuse of weakness committed by M. Banier.” Courroye paid little attention to that judgment. “It was the opinion of a police officer, but it was in no way a judicial document,” he explains. “It’s always dangerous to offer an opinion, to say the subject is guilty of abuse—he’s not authorized to do that.”
Meanwhile, one of Liliane’s worst fears came true: On December 18, 2008, following a leak on the satirical website Bakchich, investigative journalist Hervé Gattegno broke the story in the weekly newsmagazine Le Point, describing Courroye’s probe into the “hundreds of millions of euros” given to Banier by the wealthy heiress. Gattegno, who clearly had access to some of the depositions, quoted several juicy witness statements describing Banier’s pressures on the heiress and her moments of confusion.
How did the story suddenly hit the press after a year of radio silence? One suspects the hand of Olivier Metzner, Françoise’s media-conscious lawyer, who liked to brag that his “instructions” to journalists were always “respected.” Assuming Metzner was behind the leak, his likely motive was to pressure Courroye into completing his investigation and sending the case to trial. In any case, the genie was out of the bottle: The Bettencourt Affair soon became almost daily fodder for the French press in a feeding frenzy that even spilled over into such US publications as Time, Vanity Fair, and the New York Times. That was bad news for Liliane, now portrayed as a batty billionaire. Bad also for Banier, branded as a “gigolo,” a “guru,” and a “crook.” Bad for Françoise, who was perceived as a jealous, vengeful, and ungrateful daughter. And bad for L’Oréal, whose image was tarnished by the spectacle of the founding family ripping itself apart.
For all her concerns over leaks, Liliane minced no words in the interview she gave the Journal du Dimanche shortly after the story broke. “What on earth has gotten into my daughter?” she asked. “Is she settling scores with me? In any case it’s an act of sheer meanness. The funny thing is it doesn’t touch me.” She described Françoise as “introverted” and “closed in,” gripped by jealousy over Liliane’s close relationship with Banier. “He’s an artist, and that motivates me.” Her parting shot was laced with mocking cruelty: “I don’t see my daughter anymore and I don’t wish to. For me, my daughter has become something inert.”
Most of all, perhaps, the press leak was bad for Nicolas Sarkozy, because of the political time bomb that was ticking under the surface. The media pile-on made it more urgent than ever to put a lid on the case before it did worse damage. There is no proof that the president explicitly told Courroye to quash the affair. What is obvious is that after waging a hell-for-leather investigation during the first year, the prosecutor now seemed to drag his feet—even as the press and the Socialist opposition called on him to assign the investigation to an independent magistrate, and Metzner demanded that the case be sent to trial without further delay. A staunch admirer of Napoleon Bonaparte, Courroye professed to be unmoved by the mounting pressures: “I am totally indifferent to criticism,” he said. “I do not have to justify or defend myself.” His job, he said, was to weigh the facts objectively and to base his actions on a strict interpretation of the law.
When the Financial Brigade finally handed Courroye their completed investigative files in June 2009, he stuffed the dossier into his briefcase and took it home to read over the weekend. “I studied all the elements of the dossier. What did we have? We had no medical opinion, we had the testimony of [Madame Bettencourt’s] entourage, especially her personnel, and these accounts canceled each other out. That is, some people said Madame Bettencourt was sometimes tired but otherwise fine, others said she was not in good shape, and there was no way to decide between them.” When he finished poring over the documents that Sunday evening, he says, he was “completely perplexed, because there was nothing that, in my view, permitted us to lean in one direction or the other.” Returning to the office Monday morning, he gave the file to his assistant prosecutor, Marie-Christine d’Aubigney, and asked her to read it. She came back four days later and told him, “I don’t see how you can send Banier to trial on this dossier.” Courroye agreed.
But what about the hundreds of millions Banier raked in? What about his hovering presence around Liliane? His alleged manipulation? Liliane’s confusion? “Let me tell you something,” says Courroye. “Morally, sending Banier to trial, seeing him convicted, presents no problem for me. But we weren’t dealing in morality, we were carrying out the law. The question was whether or not an abuse of weakness, a strict juridical qualification, was proven.”
At that point, in early July 2009, Courroye phoned Metzner.
“Listen, Olivier, I wanted to let you know that the Prosecutor’s Office has studied the dossier carefully and—I haven’t taken the decision yet—but we’re leaning toward closing the case.”
Metzner had long suspected that the case was problematic. Without a smoking gun, or even an official medical report certifying Madame Bettencourt’s vulnerability, he knew that convicting Banier was a long shot. But Olivier Metzner was a street fighter, and he was not about to give up that easily.