MINISTER DEFENDS LAGERFELD

PARIS — Karl Lagerfeld has some support in the French government in the messy political scandal here involving a video tape his lawyer purportedly used to bargain down the designer’s tax bill.
Socialist finance minister Laurent Fabius said the arrangement reached between Lagerfeld’s lawyer, Alain Belot, and the then-finance minister, Dominique Strauss Kahn, was in accord with the law.
“There is a possible transaction by which an agreement can be reached between the administration and a particular person or company,” explained Fabius in a parliamentary session Tuesday. “According to the agreement, the person in question is asked to pay his outstanding taxes immediately. It is according to this process [Lagerfeld’s] case was handled.”
Fabius was responding to a question by Philippe Houillon, a right-wing parliament deputy. “We understand an important designer recently had his taxes slashed by about [$5 million],” said Houillon. “Tell our families, artisans and entrepreneurs, who would also like to get a break by negotiating directly with the minister, how this works.”
Lagerfeld could not be reached for immediate comment, but the designer has denied any improper role in the tax scandal. “I have nothing to do with this dirty story,” Lagerfeld told WWD last week. He ultimately paid back taxes of about $6 million.
Lagerfeld was first drawn into the explosive scandal last week, when reports suggested his lawyer traded a video containing allegations of financial impropriety against President Jacques Chirac for a tax break for his famous client.
The video was recorded by French property developer Jean-Claude Mery, detailing his role in raising illicit funds for Chirac’s Rally for the Republic party. Belot, who was also the attorney for Mery, was said to have given the tape to Strauss-Kahn, a member of the opposition Socialists. Mery died in June 1999.

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