International   

French engineers’ killing linked to kickbacks

Paris: The assassination of 11 French engineers in a bomb blast in Karachi in 2002 may not be the work of Islamist terrorists, as alleged these past years, but an act of retaliation at the French State’s failure to pay Pakistani officials $33 millions in promised kickbacks for a 1994 submarine contract. This was revealed by Olivier Morice, a lawyer close to the investigation. The new line of inquiry was also confirmed by investigators working on the case.

Prosecutors are looking into whether the arrangement also involved “reverse kickbacks” or a repatriation to France of part of the promised commissions to finance the 1995 presidential campaign of the then Prime Minister Edouard Balladur. He subsequently lost his bid to Mr. Chirac.

President Nicolas Sarkozy, who was then Minister of Finance and Mr. Balladur’s campaign manager, reacted sharply on Friday to the reports describing the new angle being pursued by investigators as a “myth”.

“It is ridiculous,” he told reporters on the sidelines of a summit in Brussels. If revealed to be true, the “affaire d’etat” as the French media is calling it, could prove highly embarrassing both to Mr. Sarkozy and to Pakistani President Asif Ali Zardari, who was a Minister at the time, was allegedly also involved.

Mr. Balladur, who has since semi-retired from politics, said in a TV interview that the “submarine procurement had taken place in a perfectly normal way.”

In 1994, France won a contract from Pakistan to build three Agosta submarines for 5.5 billion French francs, or about $1 billion. At the time of signing the contract, such commissions were legal. They were outlawed after France joined an international anticorruption initiative in 2000. The alleged commissions were to be paid before 2000. However, it would have been illegal for part of the alleged commissions to flow back into France — a mechanism sometimes known as reverse kickbacks. The investigating magistrates, Marc Trevidic and Yves Jannier, obtained a top secret internal memo containing the allegations in October 2008, from the state-owned military shipbuilder DCN which supplied the submarines, said Mr. Morice.

The memo, copies of which were shown on French media on Friday, says French and Pakistani officials connived to take bribes as part of the sale of the submarines in the mid-1990s.

According to the memo, some of the kickbacks that were paid to French officials ended up in the electoral campaign funds of Mr. Balladur, a judicial source familiar with the matter told Reuters.

For the past seven years, French investigators have suspected that Islamist terrorists of being behind the Karachi attack. Now an entirely different and hugely compromising scenario is emerging. “There was a terrorist act in which French citizens were killed,” Mr. Morice said on Friday after a meeting with investigators. “But the motive may be that France did not pay commissions it had pledged to pay.”

Investigators say they began looking into the new angle after they seized a number of financial documents describing how a web of offshore companies had been created to channel the alleged commission payments, as well as a confidential report written by a former French intelligence officer about the case. The secret memo says that Pakistani officials kept asking for the unpaid bribes for several years.

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

Not decided yet about going to NAM summit: Gilani
Beijing to launch clean energy plan
No plan to send troops to Pakistan
Obama can cook ‘keema’, ‘dal’; is also a cricket fan
UN: staff held in Sri Lanka
In detention, Suu Kyi marks birthday
French engineers’ killing linked to kickbacks
Scotland Yard probe into MPs’ expenses
We will act: Singapore
Russia’s stiff terms for arms control deal
New York Times reporter escapes Taliban captors
U.S. did not push India, Pakistan to talks: Obama
Nepal, India to address border problems

Copyright © 2009, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu