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Submarines and subtext: Who's who in 'Karachigate'

Text by FRANCE 24

Latest update : 2010-11-23

Was a May 2002 bomb attack that killed 11 French naval engineers in Pakistan payback for frozen kickbacks? The struggle to answer this question, and identify a guilty party, has cast an unflattering light on France’s ruling elite.

In 2002 a suicide bomber killed 14 workers at French marine engineering company in Karachi, 11 of whom were French citizens. The killings are said to be linked to submarine sales by France to Pakistan in the early 1990s, and allegations of a complex kickback scheme involving some of France’s most prominent politicians. The families of the French bombing victims are seeking justice and a trial is underway. FRANCE 24 look at the main players and entities in "Karachigate", the latest courtroom drama to sully France’s ruling class.

UNDER SUSPICION

Edouard Balladur – 1995 presidential campaign

This Turkish-born, right-wing politician was France’s prime minister when he was suspected of receiving kickbacks for Agosta submarines sold to Pakistan. The French daily Liberation reported that more than one million euros were added to the sales contract and wired into an account reserved for funding Balladur’s 1995 presidential campaign that pit him against former president Jacques Chirac. Balladur has denied the allegations, arguing that his campaign funds were given the all-clear by the French Constitutional Court.

SOFMA and the Lebanese connection

In order to sell submarines to Pakistan, and beat the competing German bids, some wheels needed to be greased. SOFMA, the company responsible for the export of French military hardware, was offered a 6.25 percent commission on any future sales. This commission was perfectly legal at the time. In addition, two Lebanese-born businessmen, Ziad Takieddine and Abdul Rahman el-Assir, were brought in to help seal the deal. They were positioned to collect a four percent commission to be shared with Pakistani intermediaries.

Nicolas Sarkozy

In 1995 future president Nicolas Sarkozy was director of Balladur’s presidential campaign. A Luxembourg police report dated January 2010 contains a damning suspicion: when Sarkozy was finance minister in 1994, he might have approved the creation of an offshore company called Heine to process the payments to the Lebanese men.

Jean-Marie Boivin – Heine

The same police report states that funds passing through the Heine offshore company were channelled back to France to finance election campaigns. In August 2010, the families of the Karachi bombing victims started civil proceedings against Jean-Marie Boivin, former administrator of the Luxembourg account, for perjury.

THE INSTIGATORS

Jacques Chirac

Balladur did not win the presidency in 1995, losing out to in-party rival Jacques Chirac. President Chirac subsequently ordered a halt to commissions for officials in the sale of submarines to Pakistan and an immediate inquiry was led by his defence minister Charles Millon. Families of the French engineers killed in the 2002 suicide bombing allege that the attack was revenge for Chirac’s cancelling of the payments.

Charles Millon

Charles Millon, who became defence minister in 1995, has confirmed in court that the kickbacks were real, and benefited French leaders working on the sidelines of the submarine sales. He also said that wire taps were ordered on the defence ministry officials working for his predecessor in 1995, but that the telephone recordings were of no consequence.

Alain Juppe and Dominique de Villepin

Two other prominent politicians are suspected of withholding information about the affair and will be called to testify: Chirac’s first prime minister (now defence minister) back in 1995, Alain Juppe, and Dominique de Villepin, then chief of staff of the Elysee presidential palace. It was Juppe who authorised the secret telephone recordings in 1995, plaintiffs say. De Villepin, meanwhile, has declared that France’s intelligence agency had strong suspicions that kickbacks to politicians had taken place.

Michel Mazens – SOFRESA

This former executive of the defence firm SOFRESA, which also promotes the sale of French armaments, has testified that both Chirac and de Villepin were notified that freezing payments could exact retribution by Pakistani agents.

THE NOSEY LEFT-LEANING MEDIA

Liberation

In April 2010 the left-leaning daily Liberation wrote that it had unearthed documents proving that cash deposits worth 10 million francs (around 1.5 million euros at the time) were deposited in April 1995 in Balladur’s campaign bank account. While the official source of that sum is said to be personal contributions collected at a party rally, half of the suspicious sum, Liberation reported, was in 500 franc notes. Liberation also reported that while Jacques Chirac ordered that all commission payments be halted immediately, disbursement continued well into 2001.

Mediapart

The French investigative news website Mediapart is at the source of the Luxembourg police report that points the finger at Nicolas Sarkozy in the creation of the Heine offshore company. The news organisation says that two of its journalists working on the Karachi file are under constant surveillance by the French security services.

THE LONG ARM OF THE LAW

Marc Trevidic

France’s judiciary is investigating the Karachigate affair from two separate angles. Judge Marc Trevidic, originally charged with studying whether the 2002 bombing is related to Islamic terrorism, opened a new direction in the investigation in 2007, namely that the attack was linked to the freeze of commission payments.

Renaud Van Ruymbeke

Appointed to handle the accusations of perjury against Jean-Marie Boivin, judge Renaud Van Ruymbeke was not supposed to look into possible corruption of political heavyweights. But in October 2010 Ruymbeke announced that he would, after all, investigate the allegation of kickbacks - in particular, the theory that funds from the submarine sales were used to fund Balladur’s 1995 election campaign.

Date created : 2010-11-22

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