France - Attack in Karachi: a scandal of state

French President Nicholas Sarkozy is under fire after a Luxembourg police probe dragged his name into a convoluted corruption scandal involving kickbacks from submarine sales, presidential campaign funds and the death of eleven French engineers in a mysterious bombing in Karachi.

Sarkozy sucked into submarine scandal...

When the Pakistani president Asif Ali Zardari met his French counterpart Nicolas Sarkozy at the Elysée Palace in August, there was one subject that was most officially not on the agenda. This was the so-called 'Karachi affair', a complex story involving murder and allegations of corruption on high and illegal party funding.

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11 French naval engineers died in a bomb attack in the Pakistani

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Opposition MPs in France are calling on the president to clarify any connections he may have had with an arms deal ultimately thought to have led to the death of 11 Frenchmen in Karachi in 2002. Extracts from a Luxembourg police report published in the French press yesterday claim that in 1994 Mr Sarkozy, who was then budget minister, set up a off-shore company that was used to handle tens of millions of euros in illegal commission on a deal to sell French Augusta submarines to Pakistan. The report goes on to claim that the Luxembourg-based firm then channelled some of this money back to France, where it was used to finance political campaigns.

French prosecutors investigating the Augusta submarine deal have long suspected that money from secret commission payments was used to fund the unsuccessful 1995 presidential bid by Edouard Balladur, the prime minister at the time.

Mr Sarkozy was a close political ally of Balladur and worked as spokesman for his presidential campaign. He and Mr Balladur have repeatedly dismissed these allegations.

Balladur lost the election to Jacques Chirac. It is claimed that it was the new Chirac administration's decision to put an end to the kickbacks paid to Pakistani officials under the Augusta deal that prompted a 2002 attack on a bus carrying workers to a Karachi shipyard, which left 11 French engineers dead.

Socialist MPs, including the party's deputy leader Harlem Desir, are calling for French judges to request the Luxembourg police documents to shed further light on the case.

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Pakistan: French submarines in murky waters

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French government spokesman Luc Chatel today dismissed the allegations involving Mr Sarkozy as "fairytales".

As president, Mr Sarkozy is immune from legal action while he is in office...

Group of families of victims killed in
the attack on May 8, 2002 in Karachi.