French bribes probe touches on Pakistani bomb attack

After France stopped 'commission payments' in submarine deal, 11 French engineers and technicians died in Karachi explosion.

Mourners in Cherbourg, France pay their respects to the 11 French citizens killed in a bomb attack in 2002.

France is accustomed to messy allegations of political corruption but a particularly complex affair just got messier.

Prosecutors in Paris this week announced an investigation into possible kickbacks from an arms deal with Saudi Arabia in the 1990s and early 2000s. But the real purpose of the case is to shed light on a similar weapons contract with Pakistan and a bomb attack in Karachi in 2002 that killed 11 French submarine engineers and technicians and two others.

The bombing was first blamed on al Qa'eda or affiliated groups and several people were arrested in Pakistan, although some were later acquitted. But the investigation took a sharp turn in 2008 when a secret report was leaked that pinpointed the cancellation of hefty commissions - thinly veiled bribes - to intermediaries and Pakistani officials as the reason for the attack.

The picture became even more clouded when allegations surfaced that part of the commissions, which were legal under French law when the contracts were signed in 1994, had been diverted in a very illegal way to fund the election campaigns of right-of-centre French politicians.

These allegations focused mainly on the presidential campaign of Edouard Balladur, the prime minister at the time. The current French president, Nicolas Sarkozy, was his minister of budget affairs and later his campaign spokesman. When Mr Balladur lost in 1995, the victor, Jacques Chirac, cancelled the remaining commissions on the Pakistan contract. In 2000 France joined an international treaty making such commissions illegal.

The families of the 11 French victims have been a driving force behind the investigation into what has been dubbed the "Karachi affair". Meriem Khelladi, one of their lawyers reached by telephone in Paris, said they welcomed the widening of the investigation to include the Saudi arms deal, called Sawari II. "Both contracts are linked to each other and executed at the same time and you have the same intermediaries. And funds for Sawari II were used in the Agosta contract."

The Pakistan contract was for three Agosta class submarines and totalled some €825 million (Dh4billion) with an additional 10 per cent in commissions.

The boats were built by the French company Direction des Constructions Navales, DCN, now DCNS. The Sawari II contract with Saudi Arabia, also signed in 1994, involved €2.9bn for three frigates built by Thomson-CSF, now Thales.

The overlapping intermediaries mentioned by Ms Khelladi were two Lebanese businessmen, Ziad Takkedine and Abdul Rahman al Assir.

Revelations by witnesses heard by a growing gaggle of investigating judges have made the families of the victims bitter, said Ms Khelladi. While they first focused on the likelihood of a terrorist attack, now they feel that, "maybe we have been sacrificed for personal, political and financial interests," she said.

The testimony has been confusing and sometimes contradictory. The former prime minister Dominique de Villepin, arch-foe of president Sarkozy, testified in November and said that both the commissions and the illegal diversions to France existed but denied that their cessation was the reason behind the Karachi attack. "In my view there was not any link between the Karachi bomb and the halt called by President Jacques Chirac on the payment of commissions," Mr de Villepin said at the time.

The former defence minister Charles Millon, who served under Mr Chirac, was quoted in a French newspaper as having testified to the existence of the kickbacks to French political campaigns. "We had an intimate conviction that there were kickbacks. That was the case of the Agosta and Sawari II contracts," he told the investigating judge Renaud van Ruymbeke in November.

In France, most of the attention has focused on the possibility that prominent politicians were involved in corruption. As a confidant of Mr Balladur, even the name of Mr Sarkozy has been mentioned. The president is said to have blown up at journalists over such hints. His spokesmen have called the insinuations "fairy tales" and have said that it is "an affair which concerns him in no way".

Ms Khelladi said the families of the victims had initially been promised all cooperation by the president. "He received them after he came to power. But then the allegations over the commissions surfaced and he has not seen them again."

The revelations seem to be less embarrassing to Pakistan and Saudi Arabia, since most of the attention is focused on domestic French affairs. Jean-Pierre Maulny of the Institute of International and Strategic Relations in Paris said he does not foresee any damage to relations between France and Saudi Arabia.

Similar affairs in the past, particularly an investigation into allegations involving a 1991 arms contract with Taiwan, have rarely led to convictions in France.

What is different this time is the involvement of the families of the victims.

"The families lost a parent, a husband, or a father. They think with their heart. They care about their emotions, not about politics. They want to find out who killed their family members and who ordered the bomb attacks," Ms Khelladi said.