VIEW: ‘Karachigate’: panic in Paris -Sikander Amani - Tuesday, November 30, 2010

Source :\11\30\story_30-11-2010_pg3_5

Now the recent, and very shocking revelations, allege that the attack in Karachi in 2002 is not at all linked to al Qaeda, but rather, appears to be an act of retaliation, pure and simple, from grumbling individuals (or services), who would not have received the promised kickbacks

On May 8, 2002, a suicide bomber rammed into a bus in the parking lot of the Sheraton Hotel in Karachi, killing 14 people, including 11 Frenchmen. Nothing quite out of the Pakistani ordinary, the alert reader will say. The interesting twist is that this very bomb is now threatening to derail the French president, Nicolas Sarkozy, and to engulf a large section of French politicians in one of the biggest scandals of the past decades. It could also spell bad news for Asif Ali Zardari, who is alleged to be involved in it up to his neck too.

Up until some months ago, everyone in France was blaming al Qaeda or the Taliban for the bomb, an explanation both likely and convenient. In France, the investigation slumbered along laboriously, led by a high-powered investigative judge who was, together with all the successive governments, seemingly very satisfied with both the al Qaeda hypothesis and the slow progress of the investigation. Now some months ago, this whole theory got severely shaken by new facts that surfaced in the French media: the bomb might have been linked to domestic politics, unpaid bribes, deep political enmity, and a flailing presidential campaign. All the elements of some American thriller, set in romantic Paris and seething Pakistan.

The 11 dead Frenchmen were all employees of the Direction des Constructions Navales (DCN — now DCNS), a French state-held company specialised in naval defence technology. Back in 1994, France was trying to convince Pakistan to buy French, rather than German, submarines — which they did thanks to the euphemistically-called “commissions”, aka bribes (at the time allowed under French law). The deal was for € 826 million in exchange for three Agosta submarines made by DCN, one or two of which would be assembled in Pakistan — hence the presence of French engineers in Karachi. 6.25 percent of the total sum, i.e. € 51.6 million, was allocated to the “commissions” to be distributed via an intermediary, a French state-owned company dealing in arms contracts, Sofma. Henri Guittet, at the time CEO of Sofma, formally stated in his sworn testimony that in this bribing total of 6.25 percent, 4 percent was reserved for Zardari and Bhutto. Funny how things come back to bite us.

Just when the deal was about to be signed with great pomp, the French government, led by pompous Édouard Balladur, whose Minister of Budget and right-hand man is a certain Nicolas Sarkozy, imposed a sudden and very odd change — an extra intermediary, in the form of two shady Lebanese businessmen. (Funnily enough, one is a known acquaintance of Sarkozy, and the other, a friend of Zardari’s). The price-tag for these new intermediaries amounted to an extra 4 percent of the contract, i.e. € 33 million.

So far, so good: a regular, boring corruption story, full of intermediaries and shady Middle-Eastern businessmen; in other words, no big deal.

Now the recent, and very shocking revelations, allege that the attack in Karachi in 2002 is not at all linked to al Qaeda, but rather, appears to be an act of retaliation, pure and simple, from grumbling individuals (or services), who would not have received the promised kickbacks. Indeed, 1994 was a crucial year in French politics, as it witnessed a fierce presidential campaign (bitterly) opposing the eternal contender, Jacques Chirac, and the sitting prime minister, Édouard Balladur. The claim is that the Balladur campaign received “retro-commissions” (commissions taken out of the commissions and sent back to the original sending country) through the Lebanese businessmen, and used as illegal campaign financing. As of now, at least € 10 million appear to have landed in Balladur’s campaign bank accounts, obviously located in some tax haven with an exotic name. The claim, the likelihood of which increases with every new revelation in Paris these days, is that when Chirac was elected in May 1995, he immediately ordered a complete review of all existing arms deals, and in particular, ordered a cessation of all bribes being paid; aware of the retro-commissions, he wanted to make his “friend of 30 years” Balladur pay for the political treachery of having run against him. It seems the bribes were perhaps paid continuously up until 2001, but in any event not in their totality. The working hypothesis is now that the intended recipients of the kickbacks in Pakistan, perhaps served by the ISI, got, err, annoyed about the missing money. And, as alleged by the confidential Nautilus report, commissioned by DCN in the immediate aftermath of the attack, they would have instrumentalised some dimwit to do a suicide bombing as retaliation against the French state. The attack occurred barely a few days after Chirac’s re-election in 2002.

Whatever the sordid details of the story, it is turning into an affaire d’état in France, with old friends turning into foes and old foes confirming their status as old foes. Sarkozy, who allegedly authorised the commissions and the retro-commissions back in 1994, and who strongly supported Balladur as presidential candidate, is doing everything in his power, which is not negligible, to prevent the investigation from proceeding. He publicly called the accusations “grotesque” and a “fable” (give it to him — the guy is good at indignantly and self-righteously posturing about his innocence on everything), but the reluctance of his administration to disclose documents and evidence to the investigators is troubling at best. His arch-enemy, former Prime Minister Dominique de Villepin, has publicly confirmed the existence of the retro-commissions, which is not very good news for Sarkozy — though the latest update is that Villepin has withdrawn his accusations. Villepin, also former Secretary General of the Elysée Palace under Chirac’s presidency, is himself cited by the judge as a possible co-conspirator in endangering the lives of the French employees in Pakistan: indeed, as soon as the bribes stopped being paid, the French intelligence services notified a heightened risk to all military or civil personnel stationed in Pakistan. The newly-appointed Minister of Defence, Alain Juppé, an old Chirac hand, might be served with a subpoena to disclose what he knew of the kickbacks. Meanwhile, the families of the deceased, who have been treated as annoying irritants over the years until the appointment of the new investigative judge, impress by their dignity and their will to pursue the matter until the truth is out.

So the drama is unfolding in Paris. Sarkozy’s situation is dire. His cabinet seems to go from one crisis to another, from one scandal to another, from one lie to another. His popularity rating has dropped to unparalleled levels. What is called “Karachigate” in Paris could well be his undoing. Another bomb, political this time, waiting to go off.

The writer is a freelance columnist and can be reached at

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