Why it would be government policy to smear a rival
Not just ANY rival, but THE rival. For you outsiders that are most probably not aware of the inner workings of French politics, Sarkozy was not just the rival to Villepin, he was most of all the turncoat that had abandoned Chirac to support Balladur, which made him all the more undesirable at the time to certain people (those who supported Chirac, I would suppose).
So anything that could bring down Sarkozy's chance to become President was good to take.
As we know now, it didn't work.
Not just ANY rival, but THE rival. For you outsiders that are most probably not aware of the inner workings of French politics, Sarkozy was not just the rival to Villepin, he was most of all the turncoat that had abandoned Chirac to support Balladur, which made him all the more undesirable at the time to certain people (those who supported Chirac, I would suppose).
So anything that could bring down Sarkozy's chance to become President was good to take.
As we know now, it didn't work.