French submarine engineers bombing - kickback saga?

[wtf]

Wall Street Journal is reporting that the bombing of 11 french submarine engineers may have to do with kickbacks to dealmakers not being paid.
French Bombing Inquiry Takes a New Turn - WSJ.com

Sarkozy (the french president) has denied it, but the Wall Street Journal telling the story.

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PARIS -- Prosecutors investigating a 2002 bombing in Pakistan that killed 11 French citizens are taking their probe in a new direction, looking into whether the attack was retaliation for a failure to pay alleged bribes, according to a lawyer and people close to the probe.

Prosecutors are also looking into whether the arrangement involved planned kickbacks to the campaign of a French prime minister who was running for president.
[Pakistan Bombing photo] Agence France-Presse/Getty Images

The 2002 wreckage of a bus in which 14 people were killed in Pakistan, including 11 French citizens. Prosecutors are probing whether the incident was linked to a failure to pay alleged bribes.

For the past seven years, French investigators have suspected that Islamic terrorists were behind the bombing of a bus carrying employees of French state-controlled warship maker Direction des Constructions Navales, or DCN, in Karachi.

The blast killed 14 people, including 11 French DCN employees, who were working on the construction of submarines for the Pakistan Navy. France had won a contract to build three submarines in 1994 for 5.5 billion French francs, or about $1 billion at the exchange rate of the time.

This week, Paris-based antiterrorist investigative magistrates informed families of the 11 French victims that they were looking into whether the attack happened because France allegedly reneged on a pledge to pay alleged commissions related to the lucrative submarine-building contract, according to Olivier Morice, a lawyer for the families. The new line of inquiry was also confirmed by people close to the probe.

"There was a terrorist act in which French citizens were killed," Mr. Morice said Friday after a meeting with investigators. "But the motive may be that France did not pay commissions it had pledged to pay."

After examining documents from the time, prosecutors are looking into whether -- as part of the overall submarine contract -- French officials allegedly agreed to pay $33 million to intermediaries who had helped France secure the contract, say Mr. Morice and the people close to the probe.

At the time, such commissions would have been legal: Before France joined an international anticorruption initiative in 2000, it wasn't illegal for French companies to pay commissions to foreign officials to secure contracts overseas. The alleged commissions were supposedly to be paid before 2000.

Investigators are looking into whether part of the money from the commissions was destined to flow back into France to help finance the 1995 presidential bid of then-Prime Minister Edouard Balladur. At the time, Nicolas Sarkozy -- now France's president -- was budget minister and Mr. Balladur's campaign manager.

It would have been illegal for part of the alleged commissions to flow back into France -- a mechanism sometimes known as reverse kickbacks. Prosecutors say they have documents that indicate part of the alleged commission may have been aimed at helping Mr. Balladur's campaign coffers. The prosecutors and investigators say they have no evidence implicating Messrs. Balladur or Sarkozy.

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.

Mr. Balladur ended up losing the presidential election, and investigators are probing whether this prompted French officials not to pay the alleged commissions associated with the submarine deal, according to Mr. Morice and the people familiar with the matter. The bombing may have been the result of these alleged missed payments, these people add.

Investigators are looking into a theory that Islamic terrorists carried out the bombing but on behalf of people who were supposed to receive the alleged commissions, but no evidence has been presented to support this theory.

Officials at DCNS, the new firm formed out of the former DCN, couldn't be reached for comment.

Mr. Sarkozy said Friday that the new angle being pursued by investigators was a "myth." "It is ridiculous," he told reporters on the sidelines of a summit in Brussels.

Mr. Balladur said in a TV interview he had heard "about this story for years" but that according to his information, the submarine export contract was conducted in a "perfectly normal" way

 

[wtf]

France 24 | Probe on French engineers? killings focuses on submarine money | France 24

This story goes a bit further and blames Asif Ali Zardari
...
She added that according to this scenario, the attack was carried out because the special payments were not made by France to Asif Ali Zardari, who is now Pakistan's president but was a minister at the time.
...

 

[wtf]

And "The news" chimes in. Possibly a baseless accusation, especially it is one of the angles being investigated and no court has proved anything.
Dirty deals?

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The possibility that the 2002 killing of 11 French engineers, who died alongside three Pakistanis when a car packed with explosives was rammed into their minibus in Karachi, may have been carried out to avenge a failure by Paris to pay commissions to Pakistan on a deal involving submarine sales is shocking. The act of terrorism, close to a five-star hotel, had till now been blamed on extremist militants. An ATC court in 2003 had indeed found two men linked to a 'jihadi' group responsible, although they have since been acquitted by the Sindh High Court due to a lack of proof.

French investigators and the relatives of the victims seem confident about the dirty deals theory. They claim to have compiled some evidence that suggests that the attack was carried out to punish the French for stopping commission payments. These ended in 1995, after French President Jacques Chirac assumed office. The recipient of the payments on the Pakistan end of the line is stated to have been a certain Asif Ali Zardari, at the time a minister in his wife's second government. Rogue elements in the intelligence agencies are thought to have been involved in the attack, deliberately disguising it to look like the doing of militants.

The entire story in many ways seems ludicrous, especially as the killing took place seven years after the money stopped flowing in. That it happened at a time when Zardari had no place in power and the ruling setup was led by General Pervez Musharraf also raises questions as to its authenticity. But the fact is that most of us will, somewhere in our minds, harbour the suspicion that the French may have stumbled across the terrible truth. Corruption in defence deals is well-established. It takes place in many parts of the world. The Bofors scandal of the 1980s, allegedly involving massive kickbacks to Indian politicians who included former prime minister the late Rajiv Gandhi, shook that nation. Though Gandhi was cleared by a court, echoes from the case can still be heard. Accusations of massive corruption have been heard still more frequently in Pakistan, and the submarine affair acts as a reminder that the president of Pakistan, in a previous incarnation, was known as 'Mr Ten Percent'.

The French probe is of course still to be proven before courts. At the moment it consists of little more than allegations. But the spectres it raises are terrifying. If indeed agency elements have been engaged in mimicking extremists, new dilemmas open up about other murders and other attacks. These are an indication of the dangers we live with and the fact that through our country, many currents flow. A number of them are still unchartered. We must hope the latest case with its startling disclosures can shed light on some of these. At the same time, Pakistan must do all it can to demonstrate the French case is based only in the imagination of lawyers. The damage from it has already been done. It needs to be seen if some of it can be deflected and the name of those named in it cleared.

 

[wtf]

If true, this would be the most dramatic and high level corruption story in the world.

It would implicate the present and a past French president (the current one also heading the European Union). Also accused in the sitting Pak president.

The only thing close to this I can think of is the Contra deals.

 

[ejaz007]

Sarkozy named by inquiry into Pakistan submarine payments
Updated at: 1135 PST, Thursday, June 03, 2010

PARIS: President Sarkozy was caught up in a long-simmering kickbacks scandal 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 funneled to finance a 1995 presidential campaign managed by Mr Sarkozy, who was then Budget Minister.

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.”

Sarkozy named by inquiry into Pakistan submarine payments

 

[AZADPAKISTAN2009]

None sense ...just engineers were killed to scare any engineers to come to pakistan for TOT

 

[Nahraf]

BBC News - Sarkozy queried over Pakistan arms cash

Sarkozy queried over Pakistan arms cash
Page last updated at 15:41 GMT, Friday, 4 June 2010 16:41 UK

By Hugh Schofield BBC News, Paris French President Nicolas Sarkozy The president has dismissed the allegations as 'grotesque'

The French press is sniffing cautiously but persistently around a story that some believe has potential to do enormous damage to President Nicolas Sarkozy.

It is a complex tale linking arms sales to Pakistan with the secret funding of French politics. A 2002 bomb attack that killed 11 French naval engineers in Karachi also plays a part.

The president and his advisors have dismissed any suggestion of wrong-doing on his part as "grotesque".

However, there have been continuing suggestions that Mr Sarkozy may know more than he lets on.

The origins of the affair lie in the years 1993 to 1995, when Nicolas Sarkozy was budget minister in the government of conservative Prime Minister Edouard Balladur.
'Sweeteners'

In 1994, France negotiated a deal to sell three Agosta-class submarines to Pakistan for a sum equivalent to 826m euros (£684m, £996m).

In accordance with standard procedure back then (only in 2000 did France sign an OECD convention outlawing commissions), some 50m euros were paid as "sweeteners" to various senior Pakistani figures.
Continue reading the main story

It has none of the rigour of a proper police report. It is all supposition, imaginary construction

Claude Gueant Aide to President Sarkozy

So much is uncontested (and perfectly legal). However, it is also alleged that a second tranche of commissions was also paid to two Lebanese intermediaries.

According to Le Contrat (The Contract), a new book by two French investigative journalists, this second tranche - amounting to 33m euros - was never intended to help secure the submarine contract, which was in any case almost concluded.

Instead, the money was to come back to France in the form of so-called "retro-commissions" in order to finance Mr Balladur's 1995 presidential campaign.

Though illegal, resorting to "retro-commissions" used to be common practice in the seamy underworld of French political funding.

When a major arms or oil contract was negotiated with a foreign country, the commissions would be inflated and part of the money returned secretly to France.

In this case, it is alleged that the money passed through a complex web of off-shore bank accounts, one of them in the name of a company called Heine in Luxembourg.

This is where President Sarkozy's name has been drawn in.
'All supposition'

Investigators in France have already said that in 2007 they found an internal document from the French Naval Construction Directorate (DCN), stating that as budget minister, Nicolas Sarkozy gave his approval for the creation of Heine.

And this week a report from the Luxembourg police revealed on the news website Mediapart makes the same allegation.

It says "agreement to set up Heine… appeared to come directly from Prime Minister Edouard Balladur and Finance (sic) Minister Nicolas Sarkozy."

The picture created by the allegations is this:
Former French Prime Minister Edouard Balladur on 5 May, 2010. The allegations centre on Edouard Balladur's presidential bid

In 1994, Edouard Balladur was planning to run against Jacques Chirac as the main Gaullist candidate in the following year's election, but he was desperately short of funds.

So he allegedly intervened in the Pakistani submarine contract to ensure "retro-commissions" to finance his campaign, and used his loyal ally Nicolas Sarkozy to help set up the arrangements.

The French newspaper Liberation recently reported that in April 1995, Mr Balladur's campaign team lodged 10m francs in cash at the campaign's bank account.

Half of the money was in 500 franc notes, it said.

If the claims of secret funding through "retro-commissions" were true, then both Mr Balladur and Mr Sarkozy would have broken the law - with imponderable implications for the president's future.

However, both men dismiss the allegations as preposterous, defying their accusers to produce hard evidence.

Mr Sarkozy's close aide Claude Gueant said the claims that he had approved the creation of Heine could not be true, because the rules did not require the budget minister to have any say in the matter.

He also pointed out - correctly - the lack of detail in the leaked section of the Luxembourg police document.

"It has none of the rigour of a proper police report. It is all supposition, imaginary construction," he said.
'State lie'

The story so far is one of alleged corruption, but there is another twist to the tale - and a bloody one.

In 1995, Jacques Chirac defeated Mr Balladur in the first round of the vote and went on to become president.
Continue reading the main story

What we have before us is not some imaginary tale, but a state lie

Olivier Morice Lawyer

According to Le Contrat, he immediately cancelled payment of the commissions which he knew (from intelligence sources) had helped to fund his rival's campaign.

Seven years later, an explosion killed 11 employees of the DCN as they travelled to work in Karachi.

For a long time it was presumed the attack was the work of al-Qaeda. But last year a new judge in charge of the case, Marc Trevidic, focused on another theory.

He believes that the Karachi attack may have been carried out on orders from unnamed Pakistani intelligence and military chiefs, angry that their share of the Agosta backhanders was never paid.

It is a monumental - and unproven - allegation. But the families of many of those who died are increasingly inclined to believe it.

Their lawyer, Olivier Morice, is the most outspoken of the president's critics.

"Nicolas Sarkozy was at the heart of the corruption and he has lied to the families. What we have before us is not some imaginary tale, but a state lie. The families are indignant and demand his resignation," he said.

 

[Myth_buster_1]

GREAT GREAT GREAT NEWS! What what i want to hear today.
Another case will be raised against Mr-10% in Pakistan.

 

[hataf]

GREAT GREAT GREAT NEWS! What what i want to hear today.
Another case will be raised against Mr-10% in Pakistan.

oooh don't worry he is immune to such thing as he is the president of pakistan

 

[Koga Ryu]

None sense ...just engineers were killed to scare any engineers to come to pakistan for TOT

.
would mind producing me a prove.
or some kind of link. you babale lot but never provide any soild prove.

 

[Luftwaffe]

France should seriously file a case against zardari and lot and i am sure french officials can come up with their evidences against zardari.

 

[sparklingway]

France should seriously file a case against zardari and lot and i am sure french officials can come up with their evidences against zardari.

Zardari was the Minister for Investments at that time and investigations into the deal on our side were conducted by Ehtesab Bureau and later followed by NAB and people were found guilty.

The following are the convicted people:-

(a) Shahid Ashraf, Ex-Commodore - Rs.2.25 Million
(b) Liaquat Ali Khan, Ex-Captain PN - Rs.1.90 Million
(c) Ziaullah Alvi, Ex-Captain PN - Rs.4.99 Million
(d) Mansur ul Haque, ex-Admiral - US $ 7.5 Million

Only in a country like Pakistan can a convicted Naval Chief sign a plea bargain for 7.5 million USD. That's a lot of money and we let him go free after signing a plea bargain. No plea bargains for politicians by NAB though. Gilani was sent to prison on judicial remand and remained incarcerated for 6 months before proceedings were started which is a clear violation of the law and then he was sentenced without any substantiative proof of nepotism and later his appeal was accepted by the SC after having spent five years in prison over unproven charges. Mansur ul Haq, a confessed convict receives a plea bargain and returns to California to spend his life in pleasure. Military junta at its best for how could it convict one of its own.

Only in our country can somebody accept to having taken a bribe but "return" it and go scot free. This wasn't a criminal prosecution where you sign plea bargains in exchange for lighter sentences or give a testimony against someone else to get a commutation, this was a bloody civil litigation over corruption and the above listed wonderboys went scot free.

If the french paper is to believed, then 49.5 million USD went into military channels. The recovered is hardly 8.5 million USD. Where's the rext of the 41 million? In Mansur ul Haq's swiss accounts or other people in DGDP?

Nobody is mentioning the convicted felons in this case for it does not correlate with the right wing story.This is the new stance adopted by the I-hate-politicians crowd. Evidence, investigations and the French themselves have raised finger at people in the DGDP, the Zardari saga has emerged only after he came into office from the right wing media and a french paper. Let's see if the Abdulrahman Al-Assir charges can be proven. These were never raised publicly even when the Msuharraf govt was pursuing the cases of the "kings and queens of corruption" diligently. If the Ehtesab Bureau and later NAB did not or were unable to connect the dots to Zardari, how come these were discovered now when earlier their were clear directions to prosecute politicians?

Note that NAB has largely been a failure compared to the Ehtesab Bureau, for besides Ehtesab Bureau's politically motivated investigations, it was the only ever such agency to have established links of foreign transactions. The whole Swiss case saga was uncovered by them and NAB has never been able to add anything to the earlier investigation. Saif ur Rehman is a despicable person but he deserves credit for conducting thorough and remarkable investigations.