Official Pakistani documents detailing how the country’s 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, revealed for the first time 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 succeeded against rival offers by Swedish and German contractors.
The sale, and the payment of bribes associated with it - 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 and which has rocked the French political establishment with its potential far-reaching ramifications within France.
A key allegation in the developing affair is that the cancellation of commissions paid out in the submarine deal was the motive behind a suicide bomb attack in Karachi on May 8th, 2002, that left 11 French engineers dead. They were in Pakistan to help build one of the Agosta submarines.
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. For the full background to the story please click here.
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 United Nations, 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 the French capital 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 on June 17th, 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 autumn 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.
Bank transfers to the Virgin Islands
The Agosta submarine contract was signed between the two countries on September 21st, 1994, just weeks before the first payments began.
At the time, Zardari was a minister in the Pakistani government then led by his wife, Prime Minister Benazir Bhutto. Importantly, Zardari was the key figure for all public contracts signed with foreign countries. That position earned Zardari the unflattering nickname in his own country of “Mister 10%”.
The main document seized by French investigators is a photocopy of an original dated November 9th, 1997, concerning a request by Pakistan to Switzerland for co-operation in a judicial investigation.
The request by the Pakistani authorities to Switzerland aimed, according to the officer, “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.”
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 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”.
Huge sums are recorded at the end of 1994 alone, when a company called Marleton Business Inc. was set up through a lawyer in the tax haven of the British Virgin Islands for use by Zardari. A first payment of some of 5.5 million francs (about 838,000 euros) took place in October 1994 “of which 70% goes to Monsieur Zardari (AAZ) and 30% to Monsieur Lodhi (AL),” noted the French police report.
Sarkozy’s ministry ‘approved’ bribe sums
A second transfer took place two months later, in December, for an altogether larger sum of 59.48 million francs, (about 9.06 million euros) “divided into 41.636 million [francs] for Monsieur Zardari and 17.844 million for Monsieur Lodhi”. That represented 6,934,296 euros for the current president of Pakistan, and 2,971,841 euros for his partner.
According to the French investigators, the official Pakistani documents seized in Lohdi’s Paris home also explain that “Messieurs Lodhi and Zardari received their bribes in the bank accounts of a series of offshore companies”.
The report says they are all based in the Virgin Islands and they are identified by the DNIF as: Marvil Associated Inc., Penbury Finance, Oxton Trading, Crimities Holding and Dustan Trading.
The banks involved in the payments were also recorded in the Pakistani documents, as well as the bank accounts used. “The commissions paid into the accounts, notably opened by these companies at the Pasche bank and the bank of Piguet et Cie, in Switzerland, were probably supplied by transfer from the Banque française du Commerce extérieur [French bank of Foreign Trade], account number 2700 0008358 or IV10000083580.”
Several high-profile witnesses questioned in November and December 2010 by judge Van Ruymbeke have insisted that the bribes paid in 1994 were perfectly legal and were approved by France’s then-defence minister, François Leotard, and its budget minister, now France’s president, Nicolas Sarkozy.
In a statement he gave to Van Ruymbeke on November 9th, 2010, former DCN-I finance director, Gérard-Philippe Menayas, said “the total volume of the commissions was validated, contract by contract, by the ministers of the budget and defence.”
In a statement given to judge Van Ruymbeke on December 7th, 2010, Jacques Dewatre, who in 1994 was head of the French foreign intelligence service, now called the DGSE, testified that “The approval for commissions is the responsibility of services which depend upon the Minister of Defence and the Minister of the Budget.”
Mediapart has learnt Van Ruymbeke’s investigation has already established that, in order to convince the Pakistani authorities to choose the French submarines, a very structured network of corruption was established by a French state company dedicated to such activities. This was the Société française de matériels d’armement, the SOFMA, which partnered the designers and builders of the submarines, the DCN.
Van Ruymbeke has evidence that the SOFMA set aside the equivalent in francs of 51.6 million euros for bribes to be paid out in the Pakistan deal.
Influential agents working with the SOFMA used the money to gain the favours of numerous Pakistani dignitaries, in both military and political spheres. While the practice of commission payments was then legal for France, the reception of bribes was illegal in Pakistan.
Asif Ali Zardari was one of the main benefactors of the paid bribes, according to a former SOFMA managing director, Henri Guittet. He 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.”
But French judicial investigators are investigating whether the Agosta contract also involved illegal payments in France. It was in the summer of 1994, despite the fact that negotiations with Pakistan over the sale were already successfully concluded, that the government of then-prime minister Edouard Balladour imposed two Lebanese intermediaries in the contract, Ziad Takieddine and Abdulrahman El-Assir.
They were promised supplemantary commission payments worth more than 30 million euros. Both judge Van Ruymbeke and judge Marc Trévedic, who is heading investigations into the murders of the French engineers, have collected evidence suggesting that part of the supplementary commissions was destined for Balladur’s 1995 presidential election campaign.
Trévedic’s investigation has discarded the theory touted by the Pakistani authorities that the engineers were targeted by al-Qaida. He is now centring on suspicions that the bomb attack was directly or indirectly linked to the secret financial arrangements surrounding the Agosta deal. More precisely, that it was in retaliation for the non-payment of commissions promised to Pakistanis after they were all blocked by Balladur’s rival Jacques Chirac, after he won the 1995 elections.(Mediapart)
Comment : This case is a true example of corrupt alliance between feudal-corporatist politicians and corrupt people in military establishment.
Saturday, November 28, 2009
By Ansar Abbasi
ISLAMABAD: President Asif Ali Zardari does not need adversaries as he is his own worst enemy. He shouldn’t be worried about the conspiracies, if any, of his political foes, the establishment or his perceived opponent — Geo and a few journalists associated with the Jang Group — because he himself is in a self-destructive mode.
Perhaps not many would be bothered as to what he does to himself but the big worry is about his style of governance which is marred by inaction and indifference at a time when there is a need to do a lot and seriously.
His strange and incomprehensible attitude is damaging Pakistan and threatening the whole system. To be precise and candid, if I am allowed to express my personal view, there is no greater threat to democracy and the system than the president himself. Others have the right to differ.
Getting to the Presidency or the chief executive’s office through democratic means, does not mean anything if the promises made are disregarded, election manifesto is overlooked, institutions are ruined, constitutional distortions are subtly protected to thrust and sustain a one man rule that could be described as civilian dictatorship, and parliament is ignored and cabinet is turned into a non-entity. All of this is happening under Zardariís rule.
Although the president has pointed his finger at Geo and Jang Group as his sole enemy, he conveniently ignored what the whole world says about his style of government, his growing unpopularity, mounting corruption of his regime and his men.
Read the foreign newspapers and magazines, look what is coming from Paris about the submarine deal, go through the international surveys about the record-breaking corruption to adjudge the reputation of Zardari-led political dispensation. You will find that Pakistan is hurting.
Ask the political parties, get the pulse of the military establishment, talk to the members of the civil bureaucracy and even have a heart to heart discussion with the PPP leaders including those holding public office, there is a consensus that the president is doing just contrary to what the situation demands. Pakistan is confronted with Himalaya like challenges but its president appears non-serious to face them and get them resolved. No matter what he said in his last public speech made from the Presidency, now generally termed his bunker, he knows how he is seen by all the stakeholders and how much he is trusted.
Media has always served as an easy prey for every government. What President Zardari also did on last Wednesday was no different from the past? We know the Jang Group has committed ìsinî by unearthing corruption scandals, one after the other, and by consistently highlighting tales of murder of merit, favouritism, bad governance. We are also ìresponsibleî for reminding the president and his government of promises, commitments and pledges that remained unfulfilled. President Zardari may not like it but we would continue doing so because it is our fundamental responsibility and this is what the media has been doing in the past.
We have nothing personal against anyone. We donít seek any personal favour, plots, foreign trips and lucrative positions. We neither conspire nor claim to be the kingmakers. We are just messengers and opinion makers. We may be accused of running campaigns or getting biased but all such campaigns or biases, if any, would be directed for institution building, rule of law, justice and fair play. The deserted ousted dictator General (retd) Musharraf also thought that we were biased against him. To an extent he was right that we were biased. But our bias was not against him but to achieve the goal of independence of judiciary in Pakistan. We achieved the goal for which the whole nation takes pride today.
Our criticism against the president and his regime is based on similar biases, which should not be misinterpreted in any other manner. Needless to say that we are biased against corruption, we are biased against nepotism and violation of merit, we are biased against misrule, we are biased against undemocratic postures of the democrats, we are biased against weakening of the institutions, we are biased against military rule as well as civilian dictatorship and certainly we are biased against anything that in any manner harms our homeland.
Mediaís criticism is nowhere seen as a ìconspiracyî to make or break governments. Instead, it is taken by the matured minds and civilised societies as a chance to improve governance, better service delivery, address injustices and serve the public interest.
President Zardari may not like it but he needs to change himself if he wants to secure his presidency. It may also not sound music to his ears but he also needs to change his company by getting rid of the tainted sycophants, dirtied courtiers, corrupt to the core souls and some ìknownî agents of MI6 and CIA, surrounding him. He has to act without any further delay to undo the 17th Amendment, implement the Charter of Democracy and check corruption. Otherwise, he would continue getting weaker and weaker with every passing day. But for his own follies and failings, there is no reason to blame others, particularly the media, which is the mirror, whom the politician always support and admire when out of power intoxication.
It’s really sad that a senior Pakistani analyst and journalist is under arrest on FBI made up charges and Pakistan government especially and journalist communities in general aren’t doing anything for him.
Please join the cause of supporting Nayyar Zaidi on FaceBook:
Mr. Zaidi has been living in Virginia, Washington DC for more than 20 years now. He fathers 5 kids and is of 65 years of age. Mr. Zaidi has worked in media for around 40 years, his filings for the Jang Group and later The News cover a solid 25 year span.
Mr. Zaidi ran into trouble with authorities in USA for first time for breaking the news that CIA had supplied Heroin manufacturing factories to Afghan War Lords in order to generate funds for War against USSR.
He had further encounters with FBI in 1995 & then was visited by Feds (FBI) in 2003 (after 9/11), and was asked to “become an informant”, which he refused. FBI then tried to frame him on terrorist related Charges, his phone records were accessed and his communication was monitored, CNN’s Jonathan Mann report this story in his show INSIGHT WITH JONATHAN MANN and had broadcasted interview of Mr. Zaidi in 2003.
Finally they trapped him by using an agent who communicated with Mr. Zaidi on internet pretending to be mother of a 13 year old girl interested in having sex with an older man, driven by his journalistic instincts to find out the truth, Mr. Zaidi agreed to meet the mother of this “minor” in an open public place in a parking lot in Ohio State. However, she never showed up on the appointed place and time, as Zaidi drew out of the parking lot, some 50 FBI agents blocked his car in a Terry Style Stop without any legal warrants against him, asked him to step out of his car and arrested him for “Attempt to persuade, induce, entice, and coerce an individual who had not attained the age of 18, that is a 13 years old girl to engage in illegal sexual activity with him”.
However, the truth is that there was no minor, Mr. Zaidi never met any girl, or woman or anyone at all in person, he only communicated on internet and phone with a 40 year old woman who claimed to be the mother of 13 year old girl, and this woman was in fact not even a woman, but a male FBI agent who, according to FBI claim, used some gadget/device to change his male voice to that of a female of telephone while talking to Mr. Zaidi, he is the one who tried to persuade, induce, entice or seduce Mr. Zaidi to have sex with a 13 year old (who never existed).
Mr. Zaidi wanted to investigate him/her and during communication refused to meet the minor and refused to meet the so called Mother in private and asked her to come to a public place if she were REAL.
In fact FBI admits in their own unsigned indictment in the court that they persuaded Zaidi, and told him that the minor girl (who never existed) has been persuaded by the Mother (FBI agent) and Mother wants her daughter to have sex with him thus the case should be against agents who fabricated the whole thing and themselves admit of persuading a minor (who never existed) into a sexual contact with an adult male (which never happened).
Though his arrest was made in a dramatic style, it was in clear violation of local state and federals laws.
First and foremost Mr. Zaidi was arrested illegally rather kidnapped without any probable cause being established for warrants to be issued, without any warrants obtained for his arrest on March 20, 2008, and without serving him with any warrants at the time of his arrest.
He was kept in custody for over two days till March 23, 2008 without producing any warrant or presenting him before any judge. On March 23, 2008 a notice was issued to produce him before the court but no warrants made available, when he was produced before the Court the Indictment papers were unsigned and no official stated under oath the probable cause for arrest as required by the Law.
The Prosecution did not go to a grand jury as required by Fifth Amendment, whereby its clearly states that “No person shall be held to answer for a capital or otherwise infamous crime unless on presentation or indictment of a grand jury”. Thus the most Basic right was violated.
Since his arrest almost a year and half, the case has progressed very little, during this period a lawyer provided by Govt. and 3 hired by the family were all pressurized/influenced by US Intel agencies, finally Mr. Zaidi decided to represent himself in the court. Although in US justice system it works against the defendant if he/she does not have a proper lawyer, however, Mr. Zaidi believes he has no other choice.
Upon his request to represent himself, judge referred him to a mental facility, for mental evaluation to ascertain if he could stand a trial and/or represent himself.
As per Law in USA the judge should ensure an earliest possible hearing, however, the maximum time period he may allow to keep someone in a mental facility is 4 months, yet the judge never called a hearing during 4 months time, and in a clear violation of the law he let him stay in for over 5 months and did not call a hearing even after the mandatory time had passed.
In such environment it is hard to believe that impartial justice will be done, especially when judge starts acting illegally, it is understood that defendant stands a little chance.
We believe that Mr. Zaidi is innocent until proven guilty, all we want is an impartial inquiry into the manner in which he was arrested, we want his trial to take place in transparent and efficient manner, we want him to be represented by able lawyers not under influence of US Govt. and we want evidence against him brought forward if any.
We Appeal to all Journalist bodies including various press clubs in Pakistan, PFUJ, REPORTER’S COMMITTEE FOR THE FREEDOM OF JOURNALISTS AND JOURNALISTS SAN FRONTIER and all the International bodies of the journalists to take this matter up on merit.
We request the Govt. of Pakistan and Pakistan’s Ambassador in USA to take interest in this case and provide Zaidi with legal and financial help that may be required.
We know how the prisoners in the US custody are treated be it in Iraq, Afghanistan, Guantanamo or in US Prisons, the US does not conform to any international law when it comes to frame someone and or the treatment of those detained.
Thus we must do our bit. It is another way of countering the media syntax and vocabulary that relentlessly projects “Pakistan” and “Pakistani” as a conjunction of things “bad, negative and hopeless” – a fact that I personally resent. By silence and navel-gazing or universally critiquing our own we publically forfeit national pride.
We firmly believe that Mr. Zaidi deserves sympathy and help in this trying time of his life from his fellow journalists and countrymen.
Read Nayyar Zaidi’s point of view: