UPDATE 1-French court rules tapping of Sarkozy phone was legal

May 7, 2015 12:35 PM

(Adds former Sarkozy adviser put under investigation)

By Chine Labbé

PARIS, May 7 (Reuters) - French magistrates ruled on Thursday that authorities had acted legally in tapping ex-president Nicolas Sarkozy's phone as part of an investigation into allegations of influence peddling, in a potential blow to his hopes to run for president in 2017.

Sarkozy allies had been confident the court would declare the taps inadmissible and clear the way for him to seek the conservatives' ticket for the 2017 ballot without that judicial cloud hanging over him.

But magistrates approved the measure as part of investigation of the funding of Sarkozy's successful 2007 election campaign.

Sarkozy compared the tapping last year to the mass surveillance of the Stasi secret police of former communist East Germany. He has denied any wrongdoing.

His lawyers said they would appeal against the decision, but that will not stop resumption of the investigation over allegations of corruption and influence peddling, a judicial source said.

The news came just three weeks before a key party congress and two days after the UMP leadership decided on a new name - "The Republicans".

Some party supporters said the magistrates' decision might be politically motivated.

"Nicolas Sarkozy has for a long time had a pack on his heels trying to make him stumble, but let's stress that he has never been convicted," party official Nadine Morano said on Twitter.

Sarkozy himself did not react to the court's decision but aides said he was "unfazed and determined".

Sarkozy, who lost the 2012 presidential election to Socialist Francois Hollande, had seen his return to politics at the end of last year challenged by party rivals before strengthening his hold with local election victories in March.

But a string of judicial investigations also represents a threat.

A former advisor to Sarkozy, Franck Louvrier, was held for questioning on Thursday by judges looking into an events organisation company called Bygmalion they suspect of over-billing in order to raise, covertly, money for Sarkozy's election campaigning, a police source said.

Sarkozy was questioned by investigators a few weeks ago in a separate investigation over whether it was legal for his party to pay over 500,000 euros of fines he incurred for over-spending on his failed 2012 re-election campaign. (Additional reporting by Sophie Louet and Nicolas Bertin; Writing by Ingrid Melander; editing by Ralph Boulton; editing by Ralph Boulton)