French court jails six over 'Karachigate' arms sales scandal

Six former aides of ex-French Prime Minister Edouard Balladur have been sentenced to two to five years in jail over a controversial arms deal involving millions of euros in kickbacks, linked to a 2002 suicide bombing.

Nicolas Bazire (L), former campaign manager of ex-French Prime Minister Edouard Balladur, leaves the "Tribunal de Paris" courthouse in Paris, after a ruling into the "Karachi affair", a controversial arms deal involving millions of euros in kickbacks said to have funded Balladur's unsuccessful 1995 presidential campaign. AFP - THOMAS COEX

Almost twenty years after a bomb blast in Pakistan’s economic capital Karachi that left 11 French engineers dead, a court on Monday handed out the first convictions in the so-called 'Karachi affair.'

One of France's longest running political scandals, the affair dates back to the mid-1990s and centres on allegations that kickbacks from arms sales to Pakistan and Saudi Arabia may have funded the 1995 presidential campaign of Edouard Balladur.

Three of Balladur's ex-aides were found guilty Monday of helping set up secret commissions that allowed funds to return to France.

Who has been sentenced to prison?

Those sentenced include Nicolas Bazire, Balladur's former campaign manager; Renaud Donnedieu de Vabres, a former adviser to his defence minister, François Léotard; and Thierry Gaubert, a former aide to then budget minister Nicolas Sarkozy. 

Bazire and Donnedieu de Vabres were sentenced to three years in prison, with the Paris Criminal Court saying Bazire "knew perfectly well" that as much as 10 million francs (some 1.5 million euros) from dubious sources had landed into Balladur's campaign accounts.

Gaubert meanwhile, was handed a two-year sentence, as was Dominique Castellan, a former head of the international division of French naval defence contractor DCN (since renamed Naval Group).

What are they charged with?

Charged with "abuse of public goods," "complicity to fraud" and "concealment," all four defendants have said they will appeal the ruling.

Two Lebanese middlemen who acted as go-betweens for the bribes and kickbacks, Ziad Takieddine and Abdul Rahman El-Assir, were sentenced to five years in prison. 

Both Takieddine and El-Assir were absent at Monday's ruling. Takieddine's lawyer said he, too, would appeal. The French-Lebanese businessman has a history of ties to conservative French politicians, including Sarkozy, whom he claims to have given cash from Libya to fund his 2007 presidential bid.

Sarkozy has always denied any connection to the Karachi affair, dismissing reports that he was Balladur’s 1995 presidential campaign manager.

Balladur's role?

Balladur is suspected of using his role as prime minister between 1993 and 1995 to approve payment of commissions of up to 300 million euros to the two Lebanese intermediaries to facilitate the sale of three submarines to Pakistan. The practice was legal until 2000.

Part of the sums paid out by the French government were later secretly siphoned back into France to finance Balladur's ultimately unsuccessful election bid.

The court said Monday some of the officials clearly knew of the "exorbitant commissions" paid in the deals, which constituted "an exceptionally grave threat to the public economic order, and to the confidence in the functioning of public affairs."

Balladur lost the 1995 presidential contest to Jacques Chirac, who ended the payment of all remaining commissions on the arms deals.

Link to Karachi bombing?

That prompted speculation that the 2002 Karachi bombing, initially blamed on Al-Qaeda was revenge for the lost payouts, although no links have been proven.

Fifteen people were killed, including 11 employees of French naval constructor DCN, who were working on the construction of the Agosta-class submarines to Pakistan.

Balladur, now aged 91, and his then-Defence Minister François Léotard, will face trial at the criminal court in Paris in the coming months to determine whether there is a connection between the suspected retaliation attack and the unpaid government bribes.

For families of the victims of the deadly Karachi bombing, Monday's court decision is seen as a breakthrough.

"If the families had not lodged a complaint, there would not have been this judgment", comments Olivier Morice, a lawyer representing the families. He says they are now waiting for the trial of Balladur and Léotard.