Zardari benefited in French submarine deal?

ISLAMABAD - A French court has seized the official Pakistani documents containing details about how President Asif Ali Zardari benefited from a massive secret payments linked to the sale of French submarines to Pakistan, a media report said.

According to Pakistani daily the Nation, the official documents have been seized as evidence by a Paris magistrate investigating a suspected widespread scam surrounding the deal.

The French authorities were also investigating a key allegation that the cancellation of commissions paid out in the submarine deal was the motive behind a suicide bomb attack in Karachi May 8, 2002, that left 11 French engineers dead.

The documents, revealed for the first time by a French news website 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 DCN to Pakistan in the 1994.

At the time, Zardari was a minister in the Pakistani government led by his wife and then-prime minister Benazir Bhutto. Zardari was the key figure for all public contracts signed with foreign countries. That position earned him the unflattering nickname of “Mister 10 percent”, the report said.

The French firm succeeded in grabbing the contract against its Swedish and German rivals.

The sale, and the payment of bribes, officially termed as commissions, are at the core of what has become known as the “Karachi affair”, currently the subject of two French judicial investigations.

Increasing evidence suggests that 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 report said.

The documents now in possession of Paris-based judge Renaud Van Ruymbeke 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. Lodhi held a copy of a report by a Pakistani anti-corruption service, the Ehtesab Cell.

Lodhi, 61, the brother of a former Pakistani ambassador to the UN, is a close friend of Zardari, who became president of Pakistan in 2008 one year after the assassination of his wife, Benazir Bhutto.

The raid on Lodhi’s home in Paris was carried out by detectives from the French police national financial investigation division, the DNIF, (Division nationale des investigations financiers).

The Ehtesab Cell documents were the object of a formal report by the DNIF, established June 17, 2010, and reveals that Zardari received backhanders worth 6,934,296 euros between October and December 1994.

That report is now among the evidence collected by Van Ruymbeke in his investigations launched last year into the financial aspect of the Agosta submarine sale, and in particular whether commissions paid abroad were re-routed to fund political activities within France.

Originally written in English, the Pakistani document was translated by the DNIF investigators and now provides 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 a British tax haven.