June 23, 2009Foreign AffairsFrancenaval powernavyPakistansubmarines

France, Pakistan, submarines and unpaid kickbacks

How do you say some faecal matter has hit an air circulation device” in French?

This is an archived blog post from The Acorn.

From Paris come reports of an allegation that the real motive for the terrorist attack on French submarine engineers in Karachi in 2002 was non-payment of kickbacks to Pakistani officials.

At the time (1994), 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. [WSJ]But Mr Balladur lost the election to Jacque Chirac, who supposedly stopped paying those kickbacks. The Pakistanis eventually lost patience and organised in retaliation the attack on the bus full of French engineers, who were working on the Agosta submarine project.” (More details here)

That’s not all. The online edition of the Times of India has a PTI report that says According to media reports, the French secret service retaliated after the 2002 attack, breaking the legs of two Pakistan navy admirals and killing a lower-ranking officer.” PTI doesn’t say where this nugget came from.

Mr Sarkozy described these allegations as ridiculous”, grotesque” and rhetorically asked who would believe them?” He did not, however, unequivocally deny them. It’s not as if his name is coming up for the first time in allegations of reverse kickbacks in naval deals—l’affaire Clearstream 2 involved Taiwan, frigates, kickbacks and campaign finance.

But there are holes in the story: France24 quotes a family member of one of the victims alleging that the kickbacks were to paid to Asif Ali Zardari who was a minister in Benazir Bhutto’s cabinet when the deal was struck, but in prison and out of favour when the terrorist attacks took place. It’s hard to see why officials’ would take up the cudgels on his behalf.

Meanwhile in Pakistan, the Sindh High Court acquitted two members of the Harkatul Mujahideen Al-Alami who had earlier been convicted by a lower court for having carried out the attack on the French engineers. On the familiar grounds that the prosecution failed to prove the case against the appellants beyond any reasonable doubt.” Even the small fry got away.

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