Inquiry implicates French President Sarkozy in Pak submarine payments

ajtr

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President Sarkozy named by inquiry into Pakistan submarine payments


President Sarkozy was caught up in a long-simmering kickbacks scandal yesterday when police in Luxembourg named him as the creator of a company that handled tens of millions of pounds in illegal funds.

An inquiry appears to implicate Mr Sarkozy in a case involving the sale of French submarines to Pakistan in 1994. It will strengthen suspicions of French investigators that money from the contract was funnelled to finance a 1995 presidential campaign managed by Mr Sarkozy, who was then Budget Minister.

Two French judges believe that a dispute between France and Pakistan over unpaid commissions led Pakistani agents to bomb a bus carrying French-employed shipyard workers in Karachi in 2002. Fourteen people died in the attack, 11 of them French. The attack was originally blamed on al-Qaeda.

Last year Mr Sarkozy dismissed as fantasy allegations that money intended for secret commissions to middlemen during the sale of the submarines had been used to finance the 1995 campaign of Edouard Balladur. Mr Balladur, then the Prime Minister, was backed by Mr Sarkozy in an unsuccessful race against Jacques Chirac. After Mr Chirac won, he halted further payment of the submarine commissions, it has emerged from the French inquiry.

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A parliamentary investigation has determined that £80 million in commissions was paid by DCN, France's naval shipyards, to middlemen in the submarine deal. At the time, such commissions were not illegal in France but kickbacks, known as "retro-commissions", were.

Luxembourg police, working for the French judges, said that, in 1994, Mr Sarkozy "directly supervised" the creation of a Luxembourg offshore company called Heine. Its purpose was to channel the secret payments.

"Eventually, part of the funds that passed through Luxembourg came back to France to finance French political campaigns," the police report said.

"In 1995, references lead us to believe in the existence of a form of retro-commission to pay for political campaigns in France . . ."

"We stress that Edouard Balladur was a candidate in the 1995 presidential election against Jacques Chirac and that he was supported by part of the RPR [Gaullist party], including Nicolas Sarkozy."

The President is immune from legal action while in office and there was little sense of political crisis in Paris yesterday. There was no comment from the Elysée Palace.
 

nrj

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Wow!
This is interesting! Non-payment resulted in Bus bombings! What could be implications of this on international scale?
 

ajtr

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Well its widely known that that the bombing which killed french engineers was carried out on the orders of army officers involved in the kickbacks in thats scandal due to the non payment.but the bombing was blamed on Al-qaeda.French judge who probed this case clearly accused PA and the ISI for carrying out the bombing in his final report.even his inquiry was thwarted in pakistan by the pakistani intelligence agencies.As they did in benazir bhutto's assassination case at every step they thwarted the inquiry.
 

ajtr

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Being President,Sarkozy is immune to any legal action by french courts.now the question is will he be forced to resign???Or will he be impeached???
 

JAISWAL

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now this is special. defult in kick back cause the bombings and lives of inocent people. v.v. bad.
 

ajtr

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now this is special. defult in kick back cause the bombings and lives of inocent people. v.v. bad.
we are speaking of very special country pakistan here....where in order to settle personal scores people put on the suicide vest.
 

SHASH2K2

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Wow!
This is interesting! Non-payment resulted in Bus bombings! What could be implications of this on international scale?
French knew it right from the beginning. submarine deal is still there is is under progress.
It seems money matters most important factor in todays world. French sell arms to both India and Pakistan .
they will sign more deals with pakistanis if they are in position to pay for weapons.

PAISA BOLTA HAI .
 

Armand2REP

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Being President,Sarkozy is immune to any legal action by french courts.now the question is will he be forced to resign???Or will he be impeached???
If he is immune then he won't resign. There is no political crisis as these allegations are very old and there is nothing they can do with them until he is out of office. Needless to say he won't win relection whether this becomes an issue or not. He is not exactly popular right now.
 

JAISWAL

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now this shows us power of money. well said- "bap bada na bhaiya - sabse bada rupeeya".
its common in that spceal country.
 

nandu

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Terrorism inquiry links Sarkozy to corruption

A broad investigation into a 2002 terrorist attack in Pakistan that killed 11 French naval engineers has linked French President Nicolas Sarkozy to a complex kickback affair.

As a result, the lawyer representing the families of the victims of that suicide bombing in Karachi has demanded that Mr. Sarkozy resign.

"We consider that Sarkozy lied to the families when he met with them," Olivier Morice told the German News Agency dpa. "The families are indignant. We think this was a state lie. Sarkozy must therefore resign." Mr. Morice based his demand on the fact that the judges investigating the May 8, 2002 attack believe it was not part of al Qaeda's terror war against the West, but rather the result of political infighting among French right—wing politicians, in which Mr. Sarkozy apparently played a major role.

"Illegal offshore company"

According to the French online daily Mediapart, Luxembourg police have found that in 1994 Mr. Sarkozy, then budget minister under Prime Minister Edouard Balladur, set up an illegal offshore company to help finance his boss's upcoming presidential campaign.

Called Heine, the Luxembourg—based company was allegedly used to pay bribes to intermediaries in overseas arms sales by the French naval defence company DCN and funnel kickbacks from those deals back to France.

While paying bribes to foreign agents was legal at the time, kickbacks — or retro—commissions, as they are called here — were not.

"According to a document, the agreements on the creation of (Heine) appear to come directly from Prime Minister Balladur and Finance Minister Nicolas Sarkozy," the Luxembourg police file reportedly says, misidentifying Mr. Sarkozy's post.

Over 94.4 million francs involved

More than 94.4 million francs (14.4 million euros, or currently 17.5 million dollars) are believed to have flowed back to France in kickbacks from weapons deals, including from the sale of three Agosta 90 submarines to Pakistan for an estimated 950 million dollars.

"A part of the funds that passed through Luxembourg returned to France for the financing of French political campaigns," Mediapart quoted the police dossier as saying.

Some of that money is believed to have been used by Mr. Balladur in his unsuccessful campaign for the French presidency in 1995, which Mr. Sarkozy managed.

He was defeated in the first round by his conservative arch—rival Jacques Chirac, who went on to win the second round of the vote.

More important for the investigation into the terrorist attack, more than 80 million dollars in bribes were allegedly to be paid to Pakistani politicians and military personnel in the submarine deal.

But when Mr. Chirac became president, he immediately shut down Mr. Balladur's alleged bribe—and—kickback system, leaving about 15 per cent of the Pakistani bribes unpaid. Judges now believe that the Karachi bombing was a retaliation for non—payment of the bribes.

Mr. Morice said that one of the investigating magistrates, Marc Trevidic, told the victims' families last year that this theory was "cruelly logical." Significantly, the 11 French nationals killed in the Karachi attack were there to complete work on the three submarines. (A total of 15 people died in the bombing, and another 40 were injured.)

Grotesque, says French govt. spokesman

French government spokesman Luc Chatel labelled the reports about Mr. Sarkozy's involvement in the affair as "grotesque." "The president of the Republic has expressed himself in the past and said these are just fables," Mr. Chatel said on Thursday in a televised interview. "The president has nothing to do with this affair." However, Mr. Morice said that the Luxembourg police report "demonstrates" that the president's implication was not a fable.

"I am certain that the operation he put in place when he was budget director played a central role in the affair," he said.

State secrets

Opposition politicians have demanded a formal investigation into the kickback allegations, but this is unlikely to happen. For one thing, the parts of the police file cited by Mediapart provide no proof for the allegations. In addition, most of the French government documents linked to overseas arms sales are classified as state secrets, and this veil is unlikely to be lifted as long as Mr. Sarkozy or any other right—wing politician is president.

http://beta.thehindu.com/news/international/article446465.ece
 

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