Official Pakistani documents, detailing how President Asif Ali Zardari benefited from massive, secret payments connected to the sale of French submarines to Pakistan, have been seized as evidence by a Paris magistrate investigating a suspected widespread scam surrounding the deal.
The documents, published by Mediapart, show that the payments to Zardari and others took place on the fringes of the sale of three Agosta-class submarines by the French defence contractor, the DCN, to Pakistan in the 1990s.
The French sale, which succeeded against rival offers by Swedish and German contractors, and the payment of bribes associated with it are at the core of what has become known as the 'Karachi affair', currently the subject of two French judicial investigations, The Nation reports.
A key allegation in the developing affair is that the cancellation of commissions paid out in the submarine deal triggered a suicide bomb attack in Karachi on May 8, 2002, killing eleven French engineers, who were in Pakistan to help build one of the submarines.
Increasing evidence suggests that the cancellation of the commissions, ordered by former French president Jacques Chirac, was decided after it was discovered they were in part re-routed back to France to fund political activities of Chirac's principal political rival, Edouard Balladur.
The documents, which were found during a French police search in June 2010 of the home of Amir Lodhi- one of the intermediaries involved in securing the Agosta contract and a friend of Zardari- provide the first clear details about the scale of the payments made to Zardari, amounting to several million euros, as well as the channels used, including offshore companies, bank accounts and the tax haven of the British Virgin Islands.
Zardari was one of the main benefactors of the paid bribes, according to a former SOFMA managing director, Henri Guittet, who evaluated the sum paid to Zardari as being 4% of the total value of the sales contract, which amounts to a value of 33 million euros.
"I believe there was one per cent paid upon the signature of the sales contract, which means at the moment when everything can get underway and when notably the deposit and [partial] down payment has been paid, and one per cent later," he said in a formal statement. "The remaining two per cent was pro rata with the payment of the clients."
The main document seized by French investigators is a photocopy of an original dated November 9, 1997, concerning a request by Pakistan to Switzerland for cooperation in a judicial investigation.
The request by the Pakistani authorities to Switzerland aimed "to obtain all the necessary information to pursue a criminal investigation and to try the former prime minister of Pakistan, Madame Bhutto, her husband, Monsieur Asif Ali Zardari, her mother, Begum Nusrat Bhutto and the other members of the Bhutto government, public servants and civilians implicated in the conspiracy of Madame Bhutto and/or her husband to misappropriate public funds for their own profit," according to an officer.
The French police report said the document explicitly referred to the Agosta contract: "This request concerns several cases of malpractice including that of the purchase of French submarines."
According to the DNIF (Division nationale des investigations financiers) investigators "the chronology and the currency [of the sums paid] suggest that these payments are secret commissions paid by the DCN-I [the commercial arm of the submarine builders DCN] to Monsieur Zardari and Monsieur Lodhi for their considerable service in assuring that DCN-I got the contract".
French judicial investigators are investigating whether the Agosta contract also involved illegal payments in France. Despite the fact that negotiations with Pakistan over the sale were already successfully concluded, the government of then-prime minister Edouard Balladour imposed two Lebanese intermediaries in the contract in the summer of 1994, promising them supplementary commission payments worth over 30 million euros.
Both Paris-based judge Renaud Van Ruymbeke, and judge Marc Trivedic- who is heading investigations into the killings of the French engineers- have collected evidence suggesting that part of the supplementary commissions was destined for Balladur's 1995 presidential election campaign. (ANI)