It’s easy to be cynical. This fellow, Jérôme Cahuzac, appointed by French President Francois Hollande to tackle the problem of tax evasion, has been accused of tax evasion himself. Ironies abound. Hollande is a socialist, and a Socialist, and high on his agenda are two things: during his election campaign he promised he would run a “clean” and “pure” administration as opposed to the scandal-plagued administration of his predecessor, Nicolas Sarkozy, whose Wikipedia entry under “controversies” is very long. Secondly, Hollande is the guy who thinks a 75% tax rate on the wealthy is “just” and “proper” and “necessary” to help balance the budget and spread equality around. So tax evasion in France is rampant with the wealthy looking for ways around the new law. Some are leaving France altogether.
To have his “pure” administration suffer the indignity – and the hypocrisy – of this scandal, scarcely 10 months into his term, is only going to drive Hollande’s public ratings even lower.
Before his appointment, Cahuzac, also a Socialist, became rich providing hair implants to wealthy clients. Drug companies paid him under the table and he stashed the funds in a UBS bank in Switzerland. In 2010 he got nervous about the account and UBS. According to Mediapart, an online investigative journal, Cahuzac told his wealth “advisor” that “It bothers me to have an account open over there – UBS, after all, is not necessarily the most hidden of banks.” In 2010 he closed the account and moved the funds to another bank in Singapore.
For a while Cahuzac denied, noisily and firmly, that all of this was balderdash, that he was innocent, that Mediapart was wrong, and that he was going to sue them for fraud and character assassination. I call this the “Armstrong denial,” in honor of Lance.
When the Paris prosecutor’s office decided there was more to it than that, the game was over. Not that Cahuzac had done anything wrong, you understand, just that the allegations were deemed “worthy of further investigation.” The director of Mediapart said:
[The Paris office] concluded logically the same thing we did, that is, that a judicial inquiry is necessary…
Cahuzac resigned for the “good of the government” and to devote all of his energies to defending himself against this calumny:
This [investigation] changes nothing as regards either my innocence or the calumnious character of the accusations launched against me, and I will now devote all my energy to proving this.
It’s too easy to say: just another sleazy politician. Just another crook exposed. Just another Nixon, or Armstrong, or … pick your person. What it really does is prove, as Frederic von Hayek wrote in his masterpiece, The Road to Serfdom, and specifically in his chapter, “Why the Worst get on Top,” that the larger a government gets, the more corrupt it becomes. That’s why Mr. Welch, the founder of the John Birch Society, said that the best way, perhaps the only way, to limit corruption in government is to limit the size of government itself.
Cahuzac is just the most current example of both theses.
A graduate of Cornell University and a former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at www.LightFromTheRight.com, primarily on economics and politics. He can be reached at email@example.com.