This week, 17 years after it first exploded, French authorities have put six men on trial in what has become known as “l’Affaire Karachi,” a part of a huge scandal in which one of France’s biggest state-backed defense companies allegedly paid bribes in countries across the planet on arms sales and top French politicians received kickbacks through a network of intermediaries.
The trial, expected to run for several weeks, centers on kickbacks allegedly paid on the sale of frigates to Saudi Arabia and on three Scorpene submarines to Pakistan, where a van carrying 14 people including 11 French naval engineers was blown into the air in Karachi in May 2002, killing them all. The Pakistan affair is believed to be part of a much larger campaign by the state-backed DCN for primacy in arms sales stretching from Latin America to Eastern Europe to the Middle East to Asia.
Although the Pakistani government blamed Al Qaeda militants for the attack, it is widely believed that the bombing was perpetrated by Pakistani military officials in retaliation for a decision by then-President Jacques Chirac to stop the payment of bribes over the 1994 sale of the submarines shortly after he had defeated Édouard Balladur for the presidency.
The kickbacks were believed to have been paid to fund Balladur’s unsuccessful presidential campaign. The campaign of Balladur, who was the prime minister between 1993 and 1995, was run by Nicolas Sarkozy, then the budget minister, who is thought to have authorized the arms sales and kickbacks. Sarkozy, now 64, would go on to head the French government from 2007 to 2012. He has repeatedly and angrily denied any involvement in the scandal.
The case appears to be drawn very carefully to limit the damage to the French political establishment. In fact, the scandal stemmed from attempts by the defense giant DCN to sell arms across the globe, and, according to documents made available to Asia Sentinel in 2013, was carried out with the personal knowledge of top French government leaders as well as those of other countries including Malaysia.
According to the French press, the former national anti-terrorist judge Marc Trévidic, who uncovered evidence that the bombing had been carried out by Pakistani military officials, said he regretted the cases had been “chopped up” and that the ministers were not being tried at the same time as the others. Trévidic said the families of victims and those injured “know they won’t have all the truth, but bits of it” from this first trial.
Besides Pakistan, the defense ministries of Taiwan, Malaysia, India and untold numbers of other countries bought armaments from DCN or its subsidiaries around the turn of the century under questionable circumstances. Three of those sales have been dogged with stories of bribery and the murder or unexplained deaths of 20 people, including the conglomerate’s leader lawyer, who was found floating in the ocean in 2013.
According to a 2013 prizewinning series of articles by Asia Sentinel, other transactions involved the sale of six Lafayette-class frigates to Taiwan, a deal so lucrative that some US$600 million paid in commissions on the US$2.8 billion contract disappeared into various Swiss accounts established by Andrew Wang Chuan-pu, the Taiwan agent for the French company Thomson CSF, now Thales, a unit of DCN. Wang abruptly left Taiwan when the matter began to leak into the public and has never been seen or heard of since. According to sources, a massive bribe was paid to officials of the Politburo in Beijing as well to keep criticism muted of the arms sale to Taiwan of modern defense weapons.
A Taiwanese naval captain who was said to have blown a whistle on the case was murdered. Others connected with the sale who also died were a French intelligence agent who fell to his death from his Paris apartment under questionable circumstances, and a former Taiwan-based Thomson executive who told associates he feared for his life because he was a witness to the talks. The naval captain’s nephew also died under unexplained circumstances.
Both former Malaysian Prime Minister and former Defense Minister Najib Razak and his close friend, Abdul Razak Baginda, have been indicted by French authorities in the purchase for US$1 billion of two Scorpene submarines from the DCN subsidiary Thales, with a €114 million commission paid to a shell company wholly owned by Baginda. According to documents obtained by Asia Sentinel in 2013, both French Finance Minister Alain Juppe and Malaysian Prime Minister Mahathir Mohamad were aware of the bribes paid over the purchase of the submarines
DCN also paid a Hong Kong company owned by Razak Baginda and his father €39 million for a document allegedly describing the Malaysian military’s specifications for the submarine purchase. The submarines are of limited value to Malaysia because much of the country’s coastal zones are too shallow for them to operate.
The 2006 death of jet-setting Mongolian party girl Altantuya Shaariibuu, who was brutally murdered two of Najib’s bodyguards who then blew up her body with military explosives, has figured prominently in the scandal. Altantuya accompanied Razak Baginda to Paris, ostensibly as a translator and later asked for US$500,000 after he had jilted her. The two bodyguards were convicted and sentenced to death in a case clearly designed to deflect questions over who had paid them to kill her. They have never been executed. One fled the country and is in detention in Australia.
The investigation into the bribery and murder has been reopened in the wake of the 2018 defeat of the Barisan Nasional and the removal of Najib as prime minister with crusading French lawyer William Bourdon seeking justice for the Malaysian political reform organization Suaram.
It is unknown when, if ever, the French authorities will attempt to bring Najib and Razak Baginda to trial along with two other Thales officials charged with them. The case appears to be flagging in Malaysia, where authorities have instead gone after Najib for his role in the US$4.8 billion collapse of the state-backed 1Malaysia Development Bhd., one of the world’s biggest financial scandals.
Najib remains free, along with his wife, Rosmah Mansor, and is energetically campaigning to return his party, the United Malays National Organization, and the Barisan Nasional coalition back to power. The recent agreement to align with the rural fundamentalist Parti Islam se-Malaysia, or PAS, appears to have markedly improved their chances of doing just that.
In the case unfolding in Paris, Dominique Castellan, 82, and Ziad Takieddine, a Franco-Lebanese businessman, are being tried along with the former culture minister Renaud Donnedieu de Vabres, 65, Thierry Gaubert, 68, a Sarkozy aide at the budget ministry, and Nicolas Bazire, Balladur’s presidential campaign director. The sixth man is Abdul Rahman Al Assir, 69, a business associate of Takieddine.
De Vabres, Gaubert and Bazire have denied knowing anything about illegal kickbacks. Gaubert has been accused of carrying suitcases of cash from kickbacks into France.
The Guardian quoted the state prosecutor as saying Balladur and his defense minister, François Léotard, would give evidence in a separate hearing, in a special court, for past and present government members on accusations of corruption surrounding the funding of Balladur’s 1995 campaign.
John Berthelsen is the editor of Asia Sentinel