Sarkozy fights 'insinuations' over corruption and murder

A state scandal involving President Nicolas Sarkozy and other senior figures threatens to explode this week over allegations that political corruption and revenge-taking in France led to the murder of 11 French submarine engineers in Pakistan in 2002.

Former Prime Minister Dominique de Villepin spoke on French television news of his "very strong suspicions" that kickbacks were paid to "political and non-political personalities" in France on the €800 million ($1.42 billion) sale of three Agosta 90B submarines to Pakistan in 1994.

Villepin, a visceral enemy of Sarkozy, confirmed that, as President Jacques Chirac's chief of staff, he had been involved in cancelling the Pakistani payments "to help clean up public life" in 1995-96.

He offered to give evidence to French magistrates, who are investigating allegations that the cancellation led to a bomb attack on a bus in Karachi in May 2002 in which 11 French engineers and four Pakistanis died.

The engineers were to supervise the assembly of the submarines. Initially, the bombing, just eight months after the 9/11 attacks in New York, was blamed on al Qaeda.

But for the past two years, French magistrates have been investigating claims the bombing was connected to a web of financial chicanery and political manoeuvring.

They suspect €80 million in "commissions" were paid - legally - to senior Pakistani figures in 1994 and that part was "kicked back" - illegally - to the presidential campaign fund of the then French Prime Minister, Edouard Balladur. The spokesman for Balladur's 1995 presidential campaign was Sarkozy, then Budget Minister.

When Chirac became President in May 1995, it is alleged that he cancelled what was left of the Pakistani "commissions" to punish Balladur for running against him. As a result, investigating magistrates believe, unknown figures in the Pakistani establishment fomented the Karachi bombing to "punish" Chirac, after he was re-elected in May 2002.

Although Villepin made no specific allegations against Sarkozy, his televised comments were interpreted by the French media, and by the Elysee Palace, as a new attack in a political war which has raged between the former colleagues for 16 years.

The Elysee Palace issued a statement denouncing Villepin's "insinuations", accusing him of exploiting the "tragedy" to make "mendacious allegations".

At the weekend Sarkozy made only his second public comment on the scandal, saying that, as Budget Minister, he had "no knowledge, either near or far" of the details of the Agosta submarine deal. But this contradicts a report sent to French magistrates in June this year by Luxembourg police. They said Sarkozy had been involved in 1994 in the creation in the Duchy of a company called Heine, which handled large payments connected with the submarine sale.

Sarkozy offered to ensure that any documents related to the affair were made available to investigators. But Magali Drouet, whose father, was the leader of the engineers, said he had "as good as confessed" that important documents had been concealed.

"You can smell the panic at the highest levels of the state," said Drouet, the co-author of a book on the struggle for justice by the "Karachi families".

- INDEPENDENT