L'Oreal Family Scandal Rocks France

What is it with brands and the French?

Last week, the French Supreme Court created a furor by supporting French holding company LVMH in its trademark infringement suit against Google, even though the European Union had already ruled in Google's favor.

But that pales in comparison to the saga of the Bettencourts, the French family that owns the world-renowned L'Oreal brand.

The story, known in France as "the Bettencourt affair," reads like a beach novel, and it has the country captivated, even if the French are on the verge of taking their extended summer holiday in August.

While the brand continues apace, rolling out its latest commercial with Beyonce, the family saga has captivated the French. To put it lightly, it's complicated.

Liliane Bettencourt, the 87-year old daughter of L'Oreal's founder, Eugene Schueller, has been implicated in a case that involves alleged tax evasion and political payoffs, reaching all the way up to the office of Nicolas Sarkozy, France's president. The scandal has already caused the resignation of one top government official, France's labor minister, Eric Woerth.

The fact is, "L'Oreal has always played politics, backing the parties in power and courting important personalities," says the New York Times, so the latest possible indiscretions should come as no surprise. But the image raised by Ms. Bettencourt's former accountant -- that "many politicians arrived for tea and envelopes" (cash, that is) -- is embarrassing.

And that isn't even the most intriguing part of the story. It appears that Francoise Bettencourt-Meyers, 57, Liliane Bettencourt's daughter, suspects "that members of her mother's entourage...were manipulating her to enrich themselves." Ms. Bettencourt-Meyers has filed suit, but the case, scheduled for court this summer, has been delayed because of the introduction of possible new evidence.

Clearly, Liliane Bettencourt was not pleased, exclaiming in a television interview, "My daughter could have waited patiently for my death instead of doing all she can to precipitate it." Mon Dieu.

Apparently, Bettencourt-Meyers will not relent because a lot is at stake: Liliane Bettencourt holds 31 percent of L'Oreal and is worth about $20 billion.

An observer of French politics, Arthur Goldhammer of Harvard's Center for European Studies, says it best: "This saga is the French King Lear: a thankless child attacks a failing parent and a regime totters."