The dropping of charges in what is known as the Clearstream affair, for its links to the Luxembourg-based securities clearing house, ends a six-year legal battle for Villepin and leaves him free to challenge Sarkozy in the 2012 election.
Villepin, who has quit Sarkozy’s conservative UMP party and published his own center-right political manifesto, was acquitted of charges last year by a lower court, but prosecutors appealed against that verdict.
“I’ve come out of this test even stronger than before, and even more determined to serve my fellow Frenchmen,” Villepin told reporters outside the court following the verdict.
The case centered on a forged list of names, made public ahead of the 2007 presidential election, which falsely linked Sarkozy to a corruption probe relating to secret Luxembourg bank accounts.
Villepin, prime minister from 2005 to 2007 under President Jacques Chirac, was accused of doing nothing to stop rumors about the list even though he knew it was fake.
Prosecutors said he was an “accomplice by abstention” in the scam, which tried to falsely accuse Sarkozy and others of stashing covert kickbacks in accounts with Clearstream.
“I’d like to think that this decision will help make our country less susceptible to rumors and insults, which should be treated with the contempt they deserve,” Villepin said.
Villepin would not be a major player in the 2012 election but he could eat into support for Sarkozy, who is widely expected to seek a second term but risks a defeat by the left. A rise in support for the far-right is also hurting Sarkozy.
While he is now free of the Clearstream charges, Villepin was hit over the weekend with accusations that he and Chirac were handed millions of dollars in cash, some of it stuffed into suitcases or hidden in African drums, from the leaders of several former French colonies in Africa.
The Paris prosecutor on Tuesday opened an inquiry into the allegations, made by former Chirac aide and lawyer Robert Bourgi.
Chirac and Villepin plan to sue over the allegations, which have also raised questions about Sarkozy’s links with African leaders seven months before the 2012 presidential election.
Never elected to public office, Villepin was chief of staff in the mid-1990s to Chirac, who named him prime minister in 2005 after stints as foreign and interior minister.
The Paris appeals court upheld short prison sentences and fines for defamation imposed on two other defendants in the Clearstream affair — former EADS Vice President Jean-Louis Gergorin and computer programmer Imad Lahoud.
