Nicolas Sarkozy was urged on Thursday to break his silence over the most potentially damaging corruption scandal of his career: An inquiry into whether he authorized illegal kickbacks from arms sales to Pakistan to fund a political campaign.
“L’affaire Karachi” is the most explosive corruption investigation in recent French history and the biggest scandal to threaten Sarkozy personally.
The potent saga of suspect submarine sales and illegal kickbacks centers on a bomb attack in Karachi in 2002, when 15 people, including 11 French engineers, were killed in what judges believe was a retaliation attack over unpaid government bribes.
The families of the French victims urged Sarkozy to testify to investigating magistrates about what he knows.
“At the top of the French state there is a fear of this dossier advancing because it implicates Nicolas Sarkozy and those close to him,” the families’ lawyer Olivier Morice said.
The Socialist party demanded “clarity” from the president and the immediate release of state classified documents to the investigation.
The scandal dates back to 1994 when Sarkozy was budget minister in a government led by his ally and mentor, then-French prime minister Edouard Balladur. The Balladur government sealed a deal to sell three Agosta 90 submarines to Pakistan for an estimated US$950 million.
To secure the contract, large bribes were allegedly paid to Pakistani politicians and military, as well as commissions to middlemen. Paying commissions to intermediaries was not against the law at the time.
However, the key issue is whether about 2 million euros (US$2.74 million) of illegal kickbacks from the sale were secretly funneled back to France to fund Balladur’s unsuccessful 1995 presidential campaign.
As then-budget minister, Sarkozy would have authorized the financial elements of the submarine sale. At the time he was also treasurer and spokesman for Balladur’s campaign.
Renaud Van Ruymbeke, one of France’s most ruthless independent investigative magistrates, is currently investigating the kickback allegations, as well as claims that Sarkozy approved the setting up of a shadow company to channel money from the arms deals commissions to fund Balladur’s political activities in France.
The investigative Web site Mediapart has quoted a Luxembourg police investigation, which found Sarkozy oversaw the establishment of two Luxembourg companies at the time.
Balladur lost the 1995 presidential campaign to his bitter enemy Jacques Chirac. From the Elysee, Chirac immediately set about dismantling the network of commissions and launched several secret inquiries into Balladur’s possible use of kickbacks.
Chirac ordered that all the bribes to Pakistan must stop.
In 2002, a bus carrying staff to the Karachi site where the submarine construction was being finalized was bombed.
Fifteen people were killed, including 11 French engineers.
For years Pakistan blamed al-Qaeda, as did the French government.
However, a new anti-terrorist judge investigating the bombing, Marc Trevedic, has suggested a different theory: That the attack was likely to have been a retribution hit because France had stopped the commission payments.
In a significant move, Chirac’s former defense minister, Charles Millon, this week confirmed to the inquiry that kickbacks on the arms deals existed.
Sarkozy and Balladur have flatly denied all allegations of involvement in the Karachi affair.
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