French minister admits kickbacks on arms deal
A former French defence minister admitted political corruption had taken place in a dispute that led to the death of 11 French engineers in Pakistan as judges investigate allegations about a political campaign involving Nicholas Sarkozy.
In a case that has implications for President Nicholas Sarkozy, Charles Millon confirmed yesterday that kickbacks were in place on arms deals to Pakistan during France's 1995 presidential election campaign.
The cancellation of the payments allegedly resulted in a bomb attack in Karachi that killed 11 French submarine engineers and four Pakistanis.
The May 2002 blast was initially blamed on al-Qaeda terrorists, but judges now suspect it was in retaliation for the non-payment of sweeteners promised to senior officials when Pakistan bought three Agosta attack submarines from 1994 for €825m.
The murky affair has been dubbed "Karachigate". Documents seized by investigators allege that part of the kickbacks, or "commissions" – legal under French law at the time – were illegally siphoned off to fund the 1995 presidential campaign of then prime minister, Edouard Balladur. Mr Sarkozy was his campaign manager at the time.
When Jacques Chirac won the election, it is alleged that he punished Mr Balladur for running against him by halting the remaining payments to senior Pakistani figures.
French media reported yesterday that Mr Millon told the investigating judge: "Looking at the secret service reports and analyses carried out by the [defence] ministry services, one has the absolute conviction that there were 'retro-commissions' [to France]."
The judge is investigating claims that a company set up with Mr Sarkozy's approval channelled the kickbacks to France. There is no direct evidence linking him or Mr Balladur to kickbacks. The president has labelled such suggestions as "fables".