An inquiry into the death of 11 French naval engineers threatens to embroil the French president, writes BEN HALLin Paris
FOR ALMOST seven years French investigators made little headway as they sought those responsible for a 2002 bombing in Karachi that killed 11 French naval engineers. The attack on the employees of the company DCN was presumed to be the work of al-Qaeda.
Things changed with the emergence of a new lead and the decision by the two investigating judges recently assigned to the case to speak to the victims’ families. The new line of inquiry has turned the case into the makings of a scandal, involving allegations of bribery, illegal party financing and skulduggery between warring political clans, and threatening to embroil President Nicolas Sarkozy.
Magalie Drouet, the daughter of one of the victims, had long doubted the thesis about al-Qaeda, not least because the explosive used in the bomb was of military grade. She felt a strong sense of relief when told of the new lead.
The investigating judges told her and the other families that they suspected the bombings were an act of revenge by elements within the Pakistani security forces for the termination of secret commissions.
The commissions were being paid by the then state-owned shipbuilder DCN to intermediaries in a 1994 deal negotiated by the government in Paris to sell three French submarines to Pakistan.
“As the judges told us: it is logical – cruelly logical,” said Drouet.
Olivier Morice, the families’ lawyer, said the judges changed tack after seeing an internal DCN report, written by a former secret service agent in 2002, attributing the attack to the non-payment of commissions.
The report – instigated by the company because it doubted the authorities’ ability to get to the bottom of the case – lay secret until last year, when a reporter from the newspaper Libération brought it to the judges’ attention.
Pakistan’s embassy in Paris declined to comment.
Commissions to agents were widespread in big defence contracts. In the sale of French frigates to Taiwan, such payments ran to 20 per cent. Not only were commissions legal until 2000, when Paris signed up to a ban by the Organisation for Economic Co-operation and Development, they were even tax-deductible.
What makes the affair potentially explosive politically is the allegation made in the same DCN report that illegal kickbacks were being channelled by the agents who received the commissions to the 1995 presidential election campaign of the then French premier, Edouard Balladur. His campaign director was Mr Sarkozy.
Mr Balladur’s candidacy was considered an act of treachery by Jacques Chirac, his rival, and it split France’s centre-right bloc into warring factions. After Mr Chirac won that poll, he terminated payment of the remaining commissions.
Asked about kickback claims, Dominique de Villepin, a former prime minister who was Mr Chirac’s chief of staff at the time, said: “There were rumours at the time, but I had no specific information.”
Mr De Villepin said Mr Chirac cancelled commissions on defence contracts as a matter of principle “to moralise those practices because they were very damaging to France”.While the commissions were legal under the prevailing laws, kickbacks to public or elected officials would have been considered corrupt practice.
Mr Balladur denies the allegations of illegal funding and has volunteered to testify to investigators.
“Any reference to the use [of commissions] for anything other than the legitimate payment of those who played a role in the commercial negotiations is perfectly unfounded,” he said.
No firm evidence has yet come to light of illegal payments.
As budget minister at the time, Mr Sarkozy would have known of the commissions because of the tax implications. But when asked about it, he described the investigators’ new lead as “grotesque” and “ridiculous”.
“Who would believe such a fantasy?” he said.
His dismissive reaction has angered the victims’ families.
Bernard Cazeneuve, the mayor and Socialist member of parliament for Cherbourg, where the DCN engineers worked, has led a campaign for justice.
However, he refuses to play politics with this affair. “If I wanted to, I would say that given the links between Sarkozy and Balladur at the time, it would be very hard to imagine that [Sarkozy] was not informed. But I just don’t know.” Mr Cazeneuve hopes a parliamentary commission of inquiry can cast light on the submarine contract and the commissions paid.
The investigation will now hinge on evidence from intermediaries in the deal close to the Pakistani government. It may also depend on access to top-secret French files. The government has indicated it will declassify requested documents.
But the judges can ask only for what they know exists.
The French parliament recently passed a law extending the notion of “secret défence” (or confidentiality) to places and not just documents – limiting judges’ freedom to investigate corruption cases.
Meanwhile, Mr Sarkozy is determined to abolish the post of independent investigating judge, and to replace it with a government-appointed public prosecutor.
France is thought to have cleaned up its act in terms of sleazy business practices, to the point where Transparency International, the anti-corruption pressure group, ranked it cleaner than Britain last year.
But it is still haunted by its murky past and by widespread suspicion that politicians benefited from big defence deals.
So far, however, no case of kickbacks to political beneficiaries in such contracts has been proved. – (Copyright The Financial Times Ltd 2009)