The French far right’s financial Catch-22

PARIS — On a sunny July morning in the French capital, a pair of investigating judges and some 20 law enforcement officers in bulletproof vests stormed into the unassuming headquarters of the National Rally, wedged between a frozen food store and a building cloaked in scaffolding.

France’s far-right powerhouse had found itself in the crosshairs of the French justice system, which was probing allegations the party had funded several campaigns in part through illegal loans. Those runs included Marine Le Pen’s presidential bid and legislative elections in 2022; the 2024 European election, led by party president and rising star Jordan Bardella; and the surprise snap elections that followed.

The raid came at a moment of both immense promise and immense peril for the National Rally. The party has never been more popular, and stands a realistic chance of winning the presidency when the next election is held in 2027, according to opinion polls.

But it remains dogged by legal troubles. In March, Le Pen was handed an embezzlement conviction that threatens to keep her off the ballot in the next presidential contest barring a successful appeal.

The raid, which took place on July 9, was one of three incidents publicized that week.

The day before saw the European Public Prosecutor’s Office announce an inquiry into the alleged misuse of funds by the now-defunct Identity and Democracy group in the European Parliament, to which the National Rally belongs. Before the week was out, reports emerged that French authorities had questioned the hyper-liberal, anti-immigrant billionaire Pierre-Edouard Stérin last year as part of a probe to determine whether he had illegally funded local campaigns of the far-right party. (Stérin has denied any wrongdoing.)

The National Rally has increasingly adopted a Trumpian “witch hunt” defense as the cases pile up, but the explanation comes down to money.

Despite exploding in popularity in recent years, National Rally leaders have repeatedly complained that the party can’t get loans from French banks. A 2019 parliamentary report found that most financial institutions don’t want to do business with Le Pen and Bardella’s movement due to its “image or reputation,” its modest real estate portfolio (and thus limited collateral), and its frequent run-ins with law enforcement.

It’s an unfortunate financial Catch-22 for the French far right. Without access to traditional sources of financing, the National Rally is forced to employ creative schemes that draw the attention of French authorities. The ensuing investigations in turn further dissuade banks from getting into business with the party.

Bardella told French newswire Agence France-Presse after the July raid that “no French bank wanted to lend money to the National Rally to finance its election campaigns,” and that the party should therefore not be blamed for “financing itself and taking out loans that are perfectly legal.”

President Emmanuel Macron’s upstart political party faced the same problem before his shock victory in 2017, being forced to rely on fundraising to compensate for the absence of financial guarantees or a political track record that might have reassured creditors. But after he won the Elysée, banks were more comfortable with playing ball.

A 2019 parliamentary report found most financial institutions don’t want to do business with Le Pen and Bardella’s movement due to its “image or reputation.” | Teresa Suarez via EPA

Renaissance, as the party is now known, was able to buy — and then sell for a reported €31 million — prime real estate in the heart of Paris for its headquarters. The National Rally, by contrast, rents far more modest offices in a building ill-befitting one of France’s most popular political parties, in an upscale but aging neighborhood on the western edge of the city.

Go fund yourself

The most notorious public instance of the National Rally’s efforts to seek alternative financing was the €6 million loan Le Pen secured from a Russian bank in 2014, which became a major political liability.

In recent years, however, the National Rally has relied on small-scale fundraising schemes, at least one of which fell foul of French campaign finance laws designed to prevent too much money from entering politics. The National Rally last year exhausted its final appeal and was definitively found guilty of having overcharged its candidates for “kits” containing campaign material, which were then reimbursed with public funds, during the 2012 legislative elections.

The July 9 raid was conducted by officers looking for evidence to support the allegation that the National Rally may have received illicit loans from supporters or financiers. While political parties in France are allowed to receive loans from individuals, those loans cannot be granted on a “regular basis,” per electoral law, so as to not serve the function of a banker without proper authorization.

Romain Rambaud, a law professor at the University of Grenoble who specializes in French election law, said it was “likely” that the National Rally initially relied on individual loans “because they had trouble getting loans from banks.”

French political parties feeling heat from the justice system and having their headquarters raided is nothing new. In recent years both the center-right Democratic Movement, Prime Minister François Bayrou’s party, and Macron’s centrist Renaissance were raided in relation to probes into alleged financial wrongdoing. The Democratic Movement was later fined €300,000 for having partaken in a scheme to embezzle funds from the European Parliament. The investigation into Renaissance, which involves consulting firm McKinsey’s alleged role in Macron’s presidential campaigns, has to date not led to charges.

Developmental crisis

The National Rally’s treasurer, Kévin Pfeffer, did not respond to POLITICO’s interview requests for this story after the raid. However a high-ranking party official, who was not authorized to speak publicly, acknowledged that Le Pen’s party may have faced both “a developmental crisis” and an “overzealous” French justice system.

The July 9 raid was conducted by officers in search of evidence that the National Rally may have received illicit loans from supporters or financiers. | Teresa Suarez/EFE via EPA

French public campaign financing reimburses part of candidates’ expenses if they meet certain vote thresholds, depending on the election, in order to promote fairness and limit private influence in elections.

Political parties in France also receive public funding based on the number of votes they receive in legislative elections and the number of elected representatives, and elected officials will often give back part of their earnings to the outfit they represent.

The National Rally official said the party is still learning how to handle the influx of public money that comes with electoral success.

“We went from having four MPs [before 2022] to over 120 [since 2024], [so] there’s probably some elements which escape our radar,” the official said. “It’s not always obvious focusing on getting ready to govern the country while sorting out administrative affairs.”

Rambaud, however, noted that some of the alleged illegal behavior came after the far-right party had scored key victories and could therefore benefit from public subsidies.

“It seems institutionalized now, even though they have access to state funding” he said. “That raises questions about the system in place — whether some people are using it to gain influence within the party or pay off debts. Why continue financing this way when public money is now available?”