“The Karachi Affair”

“The Karachi Affair”

THE French President is fighting to prevent a scandal involving allegations of high-level corruption – and even murder – defining his bid for re-election.

Nicolas Sarkozy is suspected by investigators of involvement in alleged kickbacks to help finance Edouard Balladur’s 1995 presidential campaign from illicit commissions said to have been paid on the sale of three submarines to Pakistan.

At the time, Mr Sarkozy was a junior minister backing Mr Balladur, the prime minister, against Jacques Chirac, their party leader.

The so-called “Karachi affair” began in 1994 when France sold three submarines to Pakistan. It is alleged Pakistani and French officials took a cut from the contract and that some of that money found its way, a year later, into Mr Balladur’s election war chest.

Mr Sarkozy, who dismissed the affair in June as a “grotesque fable”, is alleged to have been involved in the transfer of the illicit funds. The President cannot be prosecuted while in office, but the shadow of sleaze could dog his re-election campaign.

Yesterday, the left-wing opposition and families of 11 French workers killed by a car bomb in Karachi in 2002 called on Mr Sarkozy to answer questions over the E820 million submarine deal.

Socialist leader Martine Aubry called for absolute transparency. The Communist Party said: “We are facing a corruption scandal at the highest level of the state.”

The controversy is seen as a symptom of the long feud between Mr Chirac and the Balladur-Sarkozy pair, who betrayed him in 1995 by trying to block his path to the presidency.

Mr Chirac was, at the time, the boss of both as leader of the Rassemblement pour la Republique, the Gaullist movement.

The scandal erupted in March last year when a French judge expressed his strong suspicion that the 2002 Karachi bombing, which killed 11 French submarine engineers and local dock staff, had been ordered by Pakistani military officers and not by al-Qa’ida, as Pakistan had claimed.

The judge told the families of victims he believed the attack was retaliation for Mr Chirac’s decision in 1995 to halt payments of E83m in commissions to Pakistan. He suspected the newly elected president had stopped payment to prevent further funds from reaching Mr Balladur’s political campaign.

Suspicions that some of the bribes were kicked back to France intensified in January when the Luxembourg police reported that Mr Sarkozy had set up a company there in 1994, when he was Mr Balladur’s budget minister.

“We are led to believe in the existence of a form of retro-commission to pay for political campaigns in France,” the Luxembourg police told the French judge investigating the matter.

Mr Sarkozy denies the claims. But suspicion increased when it became known Mr Balladur’s 1995 campaign accounts contained E1m in unexplained cash.

In 2002 a suicide bomber killed 14 workers of French marine engineering company DCN in Karachi, 11 of whom were French citizens. These killings are linked to submarine sales by France to Pakistan that go back to the early 1990s.

The Time Line


Edouard Balladur is French prime minister under then President Francois Mitterrand.

The French Naval Construction Executive (DCN) is looking to sell French submarines to Pakistan.

As France is competing with Germany for the contracts, SOFMA, the company responsible for the export of French military hardware, is offered a 6.25 percent commission on any future sales. This commission was perfectly legal at the time.


In September 1994 a contract is signed between Pakistan and France for the purchase of submarines for a total of 5.41 billion francs (826 billion euros).


SOFMA looks to pocket 338 million francs, while two Lebanese businessmen, through off-shore company Mercor Finance, look set to receive a four percent commission (216 million francs) to be shared with Pakistani intermediaries for securing the deal.

The French presidential election campaign pitches Prime Minister Edouard Balladur against Jacques Chirac for the Gaullist RPR party’s nomination. Budget Minister and future French president Nicolas Sarkozy is in charge of Balladur’s campaign.

According to left-leaning French daily Liberation in an April 2010 report, the Lebanese businessmen sold their commission contract to a Spanish bank in June 1995 for an immediate down-payment of 54 million francs, with the rest to be paid once the DCN contract with Pakistan was concluded.

Almost simultaneously, 10 million francs in cash (mostly in 500-franc notes) is paid into Balladur’s campaign fund account (one fifth of the total funds), according to the Liberation report.


Jacques Chirac wins the party nomination and is elected president. On discovering the scale of the sales and commissions to be paid, he orders an immediate inquiry led by Defence Minister Charles Millon.

In November 2010, Millon confirmed that he had concluded in his 1996 investigation that there had been kickbacks from the commission payments.

Jacques Chirac orders that all commission payments to Mercor Finance be halted immediately, although according to Liberation, payments continued well into 2001.


A suicide bomber in Karachi, Pakistan kills 14 people, of whom 11 are French naval engineers working for DCN.

France immediately accuses al Qaeda of instigating the attack – although no one has ever claimed responsibility for it.


Anti-terrorism judge Jean-Louis Bruguiere, assigned to lead the investigation into the bombing, is replaced by two investigating magistrates, Marc Trevidic and Renaud Van Ruymbeke.

Marc Trevidic opens a new direction in the investigation, namely that the attack was linked to the halting of commission payments.


Weekly French news magazine Le Point reveals that a 2002 report by a former agent of the DST (French homeland defence and intelligence agency) concluded that the attacks were “financially motivated”.

2010 – June

French investigative news website Mediapart claims that, according to the Luxembourg authorities, Sarkozy (as budget minister in 1994) set up off-shore company Heine to handle transactions to Mercor Finance in the submarines deal.

The website says that Luxembourg police believed “some of the funds that passed through the Luxembourg account were channelled back to France to finance the campaigns of French political parties.”

Such allegations had been described as a “grotesque fairytale” by Sarkozy in 2009.

Investigating magistrate Trevidic confirms that there were indeed kickbacks associated with the submarine sales.

2010 – August

The families of the 2002 bombing victims start civil proceedings against Jean-Marie Boivin, former administrator of the Heine offshore fund set up in Luxembourg in 1994, for perjury.

The case is handled by Ruymbeke. But Paris prosecutor Jean-Claude Marin says that allegations of corruption by politicians in the 1990s are too old to be investigated.

2010 – October

Ruymbeke announces that he will, after all, investigate the corruption allegations – in particular, the allegations that kickbacks from the submarine sales were used to fund Balladur’s 1995 election campaign.

Balladur says that his campaign funds were given the all-clear by the French Constitutional Court in 1995 and that there is no case to answer.

On November 10, Bernard Accoyer, speaker for France’s National Assembly, refuses to hand Tredivic the testimony of some 60 people – including Balladur – who gave evidence to a parliamentary inquiry into the affair, citing France’s constitutional separation of power between parliament and the judiciary.

News website Mediapart says that two of its journalists working on the Karachi file are under constant surveillance by the French security services.

The satirical newspaper Canard Enchaine claims, in the same week and in a separate case, that Sarkozy is supervising the surveillance of journalists personally. The Elysee Palace denounces these claims as “utterly ridiculous”.

On November 17, in an interview with Mediapart, Gerard-Philippe Menayas, former financial director of the DCN, says that the payment of commissions from the submarine sales passed through a Luxembourg company called Cedel, later known as Clearstream.

Clearstream is the subject of another scandal alleging illegal kickbacks from the sale of warships in the early 1990s which was linked to senior politicians including former Prime Minister Dominique De Villepin, Sarkozy’s arch enemy.

On November 18, the families of the French engineers killed in the 2002 bomb attack in Karachi call for Sarkozy to testify in the case.

A lawyer for the families said they had lodged a demand with Ruymbeke that he question Sarkozy, Jacques Chirac and also Dominique de Villepin in the case.


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.

The affaire is sparked by a two-year investigation led by Paris-based investigating magistrate Marc Trévidic into a bomb attack in Karachi on May 8th, 2002 which left 15 people dead, including 11 French employees of the defence contractor DCN (Direction des constructions navales). They were working in Karachi on the construction of three Agosta class submarines sold to Pakistan by France in a deal concluded in September, 1994 by the government of France’s then prime minister Edouard Balladur.

The magistrate has definitively ruled out the involvement of Al Qaeda, contrary to what was suggested by officials in both countries at the time. Trévidic is now working on the theory that the Karachi victims were targeted as part of a settling of accounts for the non-payment by France of kickbacks to Pakistani intermediaries involved in establishing the Agosta contract.

Storm brewing? Presidents Sarkozy and Zardari at the Elysee Palace

Like Sarkozy and Balladur in France, President Zardari, who was implicated at the time in several financial affairs, earning him the name ‘Mr 10%’, denies any involvement. “When these events took place [in 2002] I was in prison,” Zardari told French daily Le Monde in an interview published on August 4th this year. “I don’t see how I could have a link to this affair. For us this attack has nothing to do with the submarine contract […] it was a pure act of terrorism.”

While, at present, there is no material proof of a link between the attack and the submarine contract, investigating judge Trévidic has already gathered an important mass of documents and witnesses that reveal the shady financial and political actions surrounding the conclusion of the Agosta deal. Two key names have emerged from the inquiry.

In France it is Nicolas Sarkozy, who was budget minister between 1993 and 1995 and as such the person who approved the financial arrangements for arms contracts, including the payment of hidden commissions. In Pakistan it is Asif Ali Zardari, a government minister at the time and, importantly, husband of the prime minister of the day, Benazir Bhutto, whom he married in 1987.

‘Bribery went from the street-cleaner to the prime minister’

In 1994, at the time of the Agosta contract negotiations, it was perfectly legal for a company or state to ‘corrupt’ foreign decision makers politicians, officials, military officers to help win an international contract. This practice was outlawed under an agreement among OECD member countries in 1997, which France finally ratified in September, 2000.

So when in 1992 France was lining up a Pakistan submarine deal, the state – the majority shareholder in DCN could thus ‘corrupt’ in all legality. And, in the face of stiff Swedish and German competition at the time, it didn’t hold back.

The bribes were readied, even though Pakistan, which would choose France in 1994, was one of the most unstable countries in the world thanks to the corruption of its ruling classes, extreme nationalism and a slide towards fundamentalism.

Out of the 826 million-euro total of the sale of the Agosta submarines, the DCN reserved an initial amount for commissions that totalled 51.6 million euros (6.25% of the contract value). These were destined for intermediaries who would later distribute the cash to dignitaries of the purchasing country. Their purpose was persuasion. A state body was set up to provide the link between the DCN and the intermediaries, namely the Société française de matériels d’armement (Sofma), whose mission was corruption.

Questioned about this issue on November 23rd, 2009 by judge Trevidic, DCN’s former international director Emmanuel Aris told the magistrate: “To my mind, the 6.25% paid by Sofma covered all the political or military decision-makers. [They] were in my view to be for all those involved, from the street-cleaner, so to speak, to the Pakistani prime minister, passing at every level concerned.” During his evidence, Emmanuel Aris never used the word ‘corrupted’ when talking about the ultimate beneficiaries of the commissions but, more cautiously, said that they were ‘covered’.

But in front a French parliamentary fact-finding inquiry into the Karachi affaire, Emmanuel Aris was a little more specific. He told members of parliament that the bribes allocated by Sofma “were to allow the creation of a favourable environment for the clinching of the contract. [It] allowed everyone to be taken care of, the street-cleaners, low-ranking officers, the head of the naval general staff, the minister of finance as well as Madame Bhutto’s entourage.”

The most active Pakistani agent working on behalf of the DCN and Sofma in relation to the Agosta contract negotiations was Amir Lodhi. Brother of a former Pakistani ambassador to the United States, Amir Lodhi is a high-flying businessman and financier with a murky past. Threatened by the enormous scandal of the BCCI bank, which was linked during its collapse in 1991 to money laundering relating to terrorism and criminal networks, Lodhi came out of it legally unscathed after agreeing to cooperate with investigators. However, for a country like France seeking to sell submarines in 1994, he was an essential figure. For Amir Lodhi had a major card up his sleeve; he was close to Asif Ali Zardari, the husband [of Bhutto] with control over state contracts.

‘Four percent was for Zardari and Bhutto’

On April 6th, 2010, Henri Guittet, who was director general of Sofma at the time of the Agosta deal, told Judge Trévidic that of the 6.25% of the planned commissions “there was 4% for Zardari-Bhutto through the intermediary of Lodhi, who perhaps was keeping a little for himself.” He also told the magistrate: “I believe that in the case of Zardari they had created a company to receive this money. I don’t remember the name of the company. It was perhaps Swiss or in Panama […] Out of the remaining amount there was to be 1.5% for Lodhi himself, a little for Ansari [another intermediary] of about 0.25%, and around 1% for Zafar Iqbal [also another intermediary].”

Guittet, who is probably among those best placed to know the goings on of the Agosta deal, gave further details to the magistrate: “As for the 4% destined for Zardari-Bhutto I believe that 1% was due upon the signing of the sales contract, which means at the time when everything could start and especially when the deposit and first instalment were paid, and 1% a year later. The remaining 2% was to be paid pro rata with the customers’ payments.”

But there was more. In the summer of 1994, when France had been chosen by Pakistan and the contract was just waiting to be signed in Islamabad which occurred on September 21st – something quite extraordinary happened. At the last minute, a new round of commissions was to be made available, on the express orders of the Balladur government. Two Lebanese businessmen came on the scene and were to receive 4% in extra commissions, which amounted to around 33 million euros.

Ziad Takieddine
The Agosta submarines under review in Pakistan.

One of these agents was Ziad Takieddine: ‘friends’ in high places, who was close to Balladur’s entourage, including Nicolas Sarkozy whom he liked to introduce as “a friend”. The suspicions today about possible hidden political funding in France through the Agosta contract centre on his role. Takieddine was said have to picked up, via an obscure financial trail that involved Luxembourg and the Isle of Man, a portion of the 33 million euros released at the last minute in the Agosta deal, to be ultimately redistributed to French political decision-makers. The aim, it is alleged, was to finance the 1995 presidential campaign of Edouard Balladur, for whom Nicolas Sarkozy was spokesman then campaign director. This is what is known as a ‘retro-commission’, an accounting procedure which has always been illegal in France.

The second agent “imposed” by the Balladur government the word employed by a former DCN senior official – was called Abdulrahman El-Assir. Also close to the Balladur camp, El-Assir had another advantage. “He was a friend of Azif Ali Zardari, the husband of prime minister Benazir Bhutto, who was the key to government contracts in Pakistan,” noted Claude Thévenet, a former French counter-espionage officer hired by the DCN to investigate the Karachi attack, in a report dated September 11th, 2002.

The judge travels to Switzerland

The links between Zardari and El-Assir are far from fanciful. British officials, who had harboured suspicions of corruption by Benazir Bhutto and her husband, disclosed in April 2001 that several Swiss bank accounts of the former ruling couple in Islamabad had been credited on August 22nd, 1995 then on September 1st, 1995 one year after the signing of the Agosta deal with three million dollars transferred from a New York Citybank account. The account belonged to Abdulrahman El-Assir.

At present, it is impossible to affirm that those three million dollars corresponded to the bribes surrounding the Agosta deal but according to British investigators the sums involved do have a connection with the payment of hidden commissions.

As a result of an investigation first launched by the Pakistan government that succeeded Benazir Bhutto in 1997, the Swiss authorities also uncovered movements of money that are allegedly compromising for the Bhutto-Zardari couple. In that affair, Bhutto (who was assassinated in 2007) and her husband were pursued by several judges in Geneva for an alleged major money laundering scam, before a timely legal amnesty in Pakistan forced the Swiss authorities to halt their investigation in 2008 – just before Zardari became president of Pakistan.

It was a short-lived respite. A judgement in December 2009 by the Supreme Court in Islamabad, which considered the amnesty unconstitutional, in theory allows the re-opening of investigations. According to information gathered by Mediapart in Geneva, the name of Abdulrahman El-Assir also appeared in the Zardari dossier on the fringes of a major arms contract signed between France and Pakistan in the middle of the 1990s. According to a local source, this concerned the Agosta submarine deal.

At the end of May this year, Judge Trévidic travelled to Geneva to study the Swiss investigating file. “He wasn’t disappointed by his visit and has asked for the transmission of a number of very specific documents,” said Alix Francotte Conus, the investigating judge in Geneva overseeing French-Swiss judicial cooperation, in an interview with Swiss daily Le Temps.

Meanwhile, suspicions that the French authorities are deliberately blocking Trévidic’s enquiries were reinforced by a witness statement given last month by retired general Philippe Rondot, a former special services officer who worked for many years in French foreign intelligence. Rondot’s illustrious career included a major role in the capture of the notorious Venezuelan terrorist Illich Ramirez Sanchez, AKA Carlos the Jackal.

Questioned by Trévidic on September 27th, he revealed that he travelled to Karachi to lead a joint mission to involving the French domestic and foreign intelligence services, the DST1 and DGSE, in June 2002, just weeks after the bomb attack against the French engineers. Trévidic had never been informed of the operation, despite his repeated requests to the French defence ministry for access to all classified reports relating to the attack.

Also last month, informed sources have told Mediapart that the president of the French parliament’s defence commission, UMP2 member of parliament Guy Tessier, this summer refused a request from Trévidic for the transcripts of interviews conducted by the commission’s enquiry into the Karachi attack.

1. The DST is now renamed the DCRI. 2. The UMP is President Sarkozy’s ruling conservative Right party.


Media articles on the blast in 2002
Pakistan Bomb Kills 11, Mostly

French Nationals

By Imran Maqbool


KARACHI (Reuters) – A suspected suicide bomber in a car killed nine French and two Pakistani nationals on Wednesday outside a top hotel in Pakistan’s volatile southern city of Karachi, police and hospital officials said.

The bomb exploded at around 8 a.m. (10 p.m. EDT), ripping through a navy bus as it was picking up the French nationals from the Sheraton Hotel, where they were staying while maintaining submarines for the Pakistani government.

Police said more than 20 people were wounded by the blast, which reduced the bus to a blackened skeleton and scattered body parts across the street. Rescue teams carried bloodied survivors away on stretchers.

Officials said members of the touring New Zealand cricket team, who were staying at the Pearl Continental Hotel across the street, were safe. New Zealand cricket authorities in Wellington immediately called off the tour.

“It was apparently a suicide bombing,” city police chief Asad Jehangir told Reuters.

There was no immediate claim of responsibility for the attack in the city where slain U.S. reporter Daniel Pearl was kidnapped earlier this year while investigating a story linked to the U.S.-led war on terrorism.

A doctor at the Jinnah Postgraduate Medical Centre put the death toll at 11. “We have received 11 dead bodies so far and 17 injured people,” he said. “Those who are injured are in critical condition.”

The French Foreign Ministry in Paris described the blast as a car bomb and said the French nationals worked for the department of naval construction, which is attached to France’s defense ministry.


A foreign diplomat in Pakistan said the bomb exploded in a car driven alongside the bus. Witnesses said some of those killed were waiting to board the bus. Others were already on board.

Police described the car as a 1974 Toyota Corolla. Where it exploded, there was a shallow crater in the road.

Pakistan’s military president, Pervez Musharraf, threw his weight behind the U.S.-led war on terrorism and the fight against al Qaeda and the Taliban in neighboring Afghanistan, a decision that angered some Muslim groups in the country.

A grenade attack in March killed five people, including the wife and daughter of an American diplomat, in a church mainly used by foreign nationals in the capital Islamabad.

Karachi, a port city of 14 million people and Pakistan’s business capital, also has a history of religious and ethnic rivalry between Shi’ite and Sunni Muslims.

The Pakistan stock market, which is based in Karachi, fell three percent after the blast.

Witnesses said Wednesday’s explosion smashed windows of a restaurant in the Sheraton Hotel, overturning tables and littering starched white tablecloths with debris.
(05-09) 04:00 PST Dubai, United Arab Emirates — 2002-05-09 04:00:00 PST Dubai, United Arab Emirates — A suicide bombing that officials suspect may have been mounted by al Qaeda elements took the lives of 14 people, 11 of them French naval engineers, in the Pakistani port city of Karachi on Wednesday morning.

The bomber, driving a 1974 Toyota Corolla laden with high-powered explosives, pulled alongside a shuttle bus parked outside the Sheraton Hotel and detonated his load. The thunderous explosion also killed the bus’ Pakistani driver and a passer-by, shocking an already skittish nation on the front line in the war on terror.
On May 8, 2002, a man driving a car bomb stopped next to a bus in Karachi outside the Sheraton Hotel. He detonated the car, ripping the bus apart, and killing himself, 11 Frenchmen, and 2 Pakistanis. The 11 Frenchmen were engineers working with Pakistan to design an Agosta 90B class submarine for the Pakistani Navy. About 40 others were wounded.

Contrary to official announcements by both the Pakistani and French governments at the time, it is now thought unlikely that those responsible for the attack had links to [[al-Qaeda]. It is more likely that the attack was orchestrated by Pakistani intelligence and military officials in retaliation for the failure of the French to pay them $33 million that had been previously agreed upon.[1] On September 18, 2002, a man named Sharib Zubair was arrested and believed to have masterminded the attack. In 2003, two men were sentenced to death for the bombing by a Karachi court. The suspected bombmaker, Mufti Mohammad Sabir, was arrested on September 8, 2005. The two men’s conviction’s have since been overturned. An investigation is currently (November 2010) underway in France in order to establish the extent to which former President Edouard Balladur and current President Nicolas Sarkozy were implicated in the the bribing of Pakistani officials. There is also growing suspicion that some of the cash used to bribe Pakistani officials found its way back into Edouard Balladur’s presidential campaign fund. Should this prove to be the case, the consequences would be extremely serious for President Sarkozy, who was, in 2002, both budget minister and treasurer of President Balladur’s election campaign.
Karachi bus blast kills 15

The attack took place in the heart of Karachi
Fifteen people have been killed in a suicide attack on a bus in Pakistan’s port city of Karachi.
Ten of the victims were French workers for a construction company and the other two were Pakistani – one is thought to have been the suicide attacker.
I was just standing on the street and the noise was so loud it was frightening

Police officer Munir Sheikh
Pakistan’s President, General Pervez Musharraf, has called an emergency meeting of his top military commanders and senior officials after the attack.

Police say the bus – which belonged to the Pakistani navy – exploded after being hit by a car driven by the attacker outside the Sheraton Hotel in the centre of Karachi.

The bus, which was on its way to the city’s dockyard, was ripped apart by the violent explosion and the windows of the nearby Pearl Continental hotel were shattered.

Loud explosion

More than 20 people, including 12 French nationals, were injured when the powerful bomb shattered the bus, creating a large crater, witnesses said.

“The sound was so loud I think you could have heard it from 10 kilometres (six miles) away,” a police officer at the scene, Munir Sheikh, said.

“I was just standing on the street and the noise was so loud it was frightening.”

Most of those on board were French workers employed by a company constructing submarines for the Pakistani navy.

The French President, Jacques Chirac, has strongly condemned the attack and is sending his defence minister, Michele Alliot-Marie, to Pakistan.

We cannot rule out the involvement of al-Qaeda

Sindh police chief Kamal Shah

In a statement, President Chirac said he “unreservedly condemns this despicable act, which nothing can justify”.

It is not yet clear who is behind this attack.

But police said they would investigate possible links between the bombers and the al-Qaeda network as well as Pakistan’s regional rival, India.

“We cannot rule out the involvement of al-Qaeda, but our suspicions are across the border. I am pointing towards India,” the Reuters news agency quoted Sindh province police chief, Kamal Shah, as saying.

Cricket tour called off

The New Zealand national cricket team, who were staying at the Pearl Continental hotel across the street, were due to begin a five-day test match in Karachi on Wednesday.

Police are looking for possible links to al-Qaeda

But the team’s manager, Jeff Crowe, said they would call off their Pakistan tour and head back home.

Members of the Pakistan national side, which was staying at the same hotel, said they narrowly escaped getting hurt.

“I am lucky that I was not in my room and was having breakfast… my room is totally destroyed,” cricket star Shahid Afridi said.

Karachi has been the scene of many sectarian killings recently but there have only been a few incidents of foreigners being targeted.

The American journalist Daniel Pearl disappeared in Karachi in January while researching a story on Islamic militants and a video of his killing was later handed to the United States consulate.

In March, two Americans were among five killed when attackers threw grenades at a church in the diplomatic enclave of the Pakistani capital, Islamabad.

President Musharraf has been tackling extremist religious groups and banned five of them in January.

A BBC correspondent in Islamabad says the high-level meeting called by the president is expected to announce new security measures and may even lead to a crackdown against suspected militant groups.

Posted by Wingate

‘Zardari took huge bribe for French submarine deal’

‘Zardari took huge bribe for French submarine deal’


PARIS: Official Pakistani documents, detailing how 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, published 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, which succeeded against rival offers by Swedish and German contractors, and the payment of bribes associated with it are at the core of what has become known as the ‘Karachi affair’ currently the subject of two French judicial investigations’ The Nation reports.

A key allegation in the developing affair is that the cancellation of commissions paid out in the submarine deal triggered a suicide bomb attack in Karachi on May 8, 2002, killing eleven French engineers, who were in Pakistan to help build one of the submarines. Increasing evidence suggests that the 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 documents, which 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 and a friend of Zardari — provide 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 the tax haven of the British Virgin Islands.

Zardari was one of the main benefactors of the paid bribes, according to a former SOFMA managing director, Henri Guittet, who 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.

The main document seized by French investigators is a photocopy of an original dated November 9, 1997, concerning a request by Pakistan to Switzerland for cooperation in a judicial investigation.

Kayani calls emergency Corps Commanders meeting

[In the continuing battle to bring American and Pakistani thinking on the terror war into alignment, we must bring to light the hidden things which are tearing us apart.  The ongoing arguments over differences between our CIA and Pakistan’s ISI, magnified by military differences, cannot be calmed by accusations and denials, but only through admissions.   Our two “Premier” spy agencies have worked together for many years, in many criminal activities.  Many of these activities have become common knowledge.  Acknowledging the obvious is an important first step, which both sides must be willing to take.  The disagreement now comes from Americans trying to blame Pakistan for all of it.

Both sides must acknowledging their shared responsibility for this criminal activity, instead of blaming it all on the other side.  Our worst mutual crime streak has been centered around our creation of militant/terrorist networks and their continued support.  Today’s split comes about because of the necessary shifting of the overall mission from creating terrorists to fighting against them.  Many elements of both spy agencies have refused to support the new mission and they  continue to support their terrorists even after our nations have declared war upon them.  These “rogue elements” are the cause of the ongoing argument between us.  This big problem of trouble-making by rogue elements must be solved.  Failure to approach the problem as a problem with out of control rogues will probably end in some level of war between the two nations.  This has to be avoided at all costs, meaning that the rogues on both sides must be exposed so that they alone will take the blame.

The flurry of high-level meetings, ending with CENTCOM Chief Mattis confronting Kayani and now this emergency meeting of Corps Commanders (to be followed by Gen. Kayani’s trip to speak before the British International Institute for Strategic Studies), is stark testimony as to how far the situation has deteriorated today.  It will be interesting to see how the narrative either improves or worsens, after the Royal trouble-making institute puts their spin on the situation.  There is far too much at stake here to allow the Illuminate masterminds to continue to muck it all up.

Everybody has to cut-off all support for their own proxy terrorists and in AfPak, everybody has proxies.] 

Kayani calls emergency Corps Commanders meeting

The meeting — chaired by the Army chief and attended by all Corps Commanders and Pricipal Staff officers — was called to discuss key issues of importance and urgency, including matters related to national security and the regional peace. — File PhotoThe meeting — chaired by the Army chief and attended by all Corps Commanders and Pricipal Staff officers — was called to discuss key issues of importance and urgency, including matters related to national security and the regional peace. — File Photo

ISLAMABAD: Pakistan’s army chief General Ashfaq Kayani on Sunday called a ‘special’ meeting of his top commanders to discuss the security situation, the military said, as the war of words with the United States escalated.

The extraordinary meeting of the corps commanders came against the backdrop of sharp US allegations that Pakistan army’s spy agency supported the Haqqani militant group Washington blames for the recent attack on its embassy and other targets in Kabul.

In a terse two-line statement, the military said the commanders would “review (the) prevailing security situation.”

Kayani, who is departing for London later tonight to address the International Institute for Strategic Studies and the Royal College of Defence Studies, is chairing the meeting.

[This note on the International Institute for Strategic Studies

The IISS is the vehicle for MI6-Tavistock black propaganda, and wet jobs (an intelligence over name denoting an operation where bloodshed is required), adverse nuclear incidents and terrorism, which goes to the world’s press for dissemination, as well as to governments and military establishments. 

Membership in the IISS includes representatives of 87 major wire services and press associations, as well as 138 senior editors and columnists…. 

The IISS is nothing more than a higher echelon opinion maker, as defined by Lippmann and Bernays. In the writing of books, and in newspapers, IISS was formed to be a coordinating centre for not only creating opinions, but to get those opinions and scenarios out much faster and to a far greater audience than could be reached by a book for example…. “

Bernays wrote: “The conscious and intelligent manipulation of organized habits and opinions of the masses is an important element in a democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government, which is the true ruling power in our country…… We are governed, our minds are moulded, our tastes formed, our ideas suggested, largely by men we have never heard of….”–end of quote, editor]

“The meeting reflects the gravity of crisis,” retired general, turned security analyst, Talat Masood said.

“They will issue a statement to express solidarity (within the military) and to show that they all are on one page.”

The corps commanders meeting comes a day after Kayani met with US CENTCOM commander General James N. Mattis in Pakistan, but military spokesman Major-General Athar Abbas said the two meetings were “unrelated.”

Contacts with Haqqanis

In an interview with CNN, Abbas acknowledged that army’s Directorate of Inter-Services Intelligence (ISI) maintained contacts with the Haqqani network, but said that didn’t mean it supported it.

“Any intelligence agency would like to maintain contact with whatever opposition group, whatever terrorist organisation … for some positive outcome,” he told CNN in a telephone interview.

However, he said there was a huge difference between maintaining those contacts to facilitate peace and supporting it against an ally.

In the most blunt remarks by a US official since Pakistan joined the US-led war on militancy in 2001, the outgoing chairman of the joint chiefs of staff, Admiral Mike Mullen, on Thursday testified before the US Senate that the Haqqani militant network is a “veritable arm” of the ISI.

He also for the first time held Islamabad responsible for the Kabul attack, saying Pakistan provided support for that assault.

On Saturday night, Pakistani Prime Minister Yusuf Raza Gilani rejected US allegations as a sign of American “confusion and policy disarray”.

“We strongly reject assertions of complicity with the Haqqanis or of proxy war,” Gilani said, breaking off from a speech to aid agencies and foreign diplomats on the country’s flood disaster.

Although Pakistan officially abandoned support for the Taliban after the Sept. 11 attacks on the United States in 2001 and allied itself with Washington’s “war on terror”, analysts say elements of the ISI refused to make the doctrinal shift.

Gilani’s Foreign Minister Hina Rabbani Khar told Washington on Friday that it risked losing an ally if it kept accusing Islamabad of playing a double game in the war against militancy, and escalating a crisis in ties triggered by US forces’ killing of al Qaeda leader Osama bin Laden in Pakistan in an unannounced raid in May.

Security analyst Masood said the sharpened rhetoric between Pakistan and the United States could lead to a “collision”.

One of the options for Pakistan, he said, could be to put pressure on Haqqani fighters to leave Pakistan to avert a confrontation.

“I think both Pakistan and the United States will step back to avoid making things worse.”

India told to stop work on Kishanganga dam

India told to stop work on Kishanganga dam

By Syed Irfan Raza
The International Court of Arbitration passed a unanimous order on Pakistan’s application for ‘interim measures’ against the construction of the Kishanganga dam on Saturday. – File Photo

ISLAMABAD: The International Court of Arbitration (ICA) has barred India from any permanent works on the controversial Kishanganga hydro-electricity project (KHEP) on River Neelum at Gurez in occupied Kashmir in response to Pakistan’s appeal for ‘interim measures’ against the dam which may inhibit the restoration of the river flow to its natural channel, the government announced on Saturday.

The arbitration court took the decision on an appeal filed by Pakistan that India was diverting the flow of the river and violating Indus Water Treaty (IWT) between the two countries, said Farhatullah Babar, spokesman for President Asif Ali Zardari, on Saturday.

The court of arbitration passed a unanimous order on Pakistan’s application for ‘interim measures’ against the construction of the Kishanganga dam.

The court order said: “India shall not proceed with the construction of any permanent works on or above the Kishanganga/Neelum River bed at the Gurez site that may inhibit the restoration of the flow of the river to its natural channel.

Pakistan and India shall arrange for periodic joint inspections of the dam site at Gurez in order to monitor the implementation of the court’s order.”

Islamabad had submitted its version in the World Bank’s arbitration court in July. The major contention was that under the law India cannot divert the route of River Neelum. Pakistan fears that the Kishanganga dam would rob it of 15 per cent water share – a violation of the Indus Water Treaty.

Islamabad accused Delhi of trying to divert the water of Neelum river in order to harm Pakistan’s Neelum-Jhelum hydro-electricity project.

In its application Pakistan had sought: “A stop work order; An order that any steps India has taken or may take in respect of the KHEP are taken at its own risk without prejudice to the possibility that the court may order that the works may not be continued, be modified or dismantled, that India be ordered to inform the court and Pakistan of any imminent and actual developments on the Kishanganga Dam that may adversely affect the restoring of the status quo ante or that may jeopardise Pakistan’s rights and interests under the treaty; Any further relief the court considered necessary.”

The president’s spokesman said the office of the special assistant to the prime minister on water resources and agriculture, the team of legal experts from Pakistan and abroad who prepared a tremendous case, NESPAK and PCIW of the ministry of water and power attended the hearing at the Permanent Court of Arbitration at the Hague.

US To Spend $700 Billion On New Nukes and Modernization In Next Ten Years

What We Spend on Nuclear Weapons


The United States is projected to spend over $700 billion on nuclear weapons and related programs during the next ten years. As federal budgets tighten and officials address the most pressing national security needs of the 21st century, the substantial cost of nuclear weapons must be fully examined. By understanding these costs and setting effective national security priorities, policymakers can reduce nuclear budget excesses incurred by the active stockpile of approximately 5,000 nuclear weapons.

Ploughshares Fund has written a working paper (http://ploughshares.org/sites/default/files/resources/What%20We%20Spend%20on%20Nuclear%20Weapons_0.pdf) to address the magnitude of this complex issue. As a result of this analysis, we are convinced that the current projected expenditures on nuclear weapons are mismatched for both the fiscal and physical threats we face as a country, and must therefore come down. This working paper should be viewed as a living document that, as the budget picture for nuclear weapons spending becomes clearer, will be adjusted to match the changing policy environment.

We hope that this working paper will contribute to the overall national debate about defense spending, both for the sake of our national security and our country’s fiscal health. It is our view that these projected investments are oriented towards fighting last century’s wars, thereby creating significant financial waste while undercutting our country’s ability to address the threats we all face. In an era of tight federal budgets, limited defense dollars must be spent wisely to address the security needs of today and the anticipated security needs of tomorrow. Our projected nuclear weapons spending, as outlined in this paper, does not meet this standard.

Ultimately, the United States must find a bipartisan path forward for reducing the nuclear budget burden that we all face. We should not saddle our children and grandchildren with hundreds of billions of dollars of unnecessary future expenditures for weapons systems that we neither need nor can afford.

ORIGINAL POSTING LINK: http://www.ploughshares.org/blog/2011-09-14/what-we-spend-nuclear-weapons

Iran Says NATO Shield In Service Of Israel

Iran Says NATO Shield In Service Of Israel

Written by: 

Commander Ahmad Vahidi, the Iranian Defence Minister, says NATO’s anti-missile shield in Turkey is really a defence system for Israel and he accuses Turkey of double-dealing in its stance against Israel.

An ISNA report quotes Vahid as saying: “There is no justification for establishing this defence system, and we see it as a U.S. defence strategy for the Zionist regime.”

Vahidi said Israel cannot be saved by such measures because its problems lie in its “lack of legitimacy and internal collapse … the freedom and awakening of the regional nations …. [and] the takeover of its embassy by Egypt’s Muslims.”

Vahidi went on to say that the West is trying to limit Russia and Iran’s regional influence but he called those efforts “futile.”

Last November, NATO approved the establishment of anti-missile shields in Europe to defend against possible ballistic missile attacks by Iran.

This month, Turkish authorities announced they have agreed to let NATO set up an anti-missile shield in Turkey.

Iran has condemned the Turkish move and accused the country of “using double standards” in its stance against Israel.

About the author:

Since 2006 Radio Zamaneh has successfully facilitated Persian writers, Islamic scholars, prominent Iranians and personalities at the heart of Iranian culture to provide their views and thoughts.

Professor Sues Pittsburgh for Zapping Her With Weapon Developed to Fight Terrorists

Professor Sues Pittsburgh for Zapping Her With Weapon Developed to Fight Terrorists


PITTSBURGH (CN) – An English professor says she suffered “permanent hearing loss, nausea, pain and disorientation” when Pittsburgh police used a Long Range Acoustic Device, developed to fight terrorists, on a peaceful demonstration against the IMF, in which she was not participating, but merely watching.
Karen Piper sued Pittsburgh and its police force for negligence, civil rights and constitutional claims, in Federal Court.
“During the G-20 Summit Meeting held in Pittsburgh in September 2009, City of Pittsburgh Police used a Long Range Acoustic Device (LRAD) against civilians on or about the streets of Pittsburgh,” the complaint states. “The LRAD, a distance hailing and crowd control device, was developed in response to the terrorist attack on the USS Cole in October 2000, and was originally intended to be used by American warships to warn incoming vessels approaching without permission. Among other things, it emits harmful, pain-inducing sounds over long distances. The LRAD is a military-style weapon, and it was used for the first time in the United States when the Pittsburgh Police directed it on civilians in September 2009. Plaintiff Karen L. Piper, a visiting professor at Carnegie Mellon University, was an innocent bystander on September 24, 2009, who suffered permanent hearing loss, nausea, pain and disorientation when the LRAD was activated without any warning. Piper alleges in this 42 U.S.C. §1983 civil rights lawsuit that Defendant City of Pittsburgh and its officials violated her rights under the First, Fourth and Fourteenth Amendments to the U.S. Constitution and that the City of Pittsburgh used the device negligently.”
Piper, an English professor at the University of Missouri was a visiting professor at Carnegie Mellon University when the police zapped her. She says she rode her bicycle to Arsenal Park when she heard that protesters were gathering there.
At the time, Piper says, she was working on a book about the International Monetary Fund and World Bank. “Her field of interest included examining whether protestors have any impact on these institutions. …
“Consistent with her academic interest, plaintiff’s intention was to take photographs and observe rhetoric on any signs.”
She says she “stood on the road beside a wall of police” and watched people “calmly and peacefully milling about in the park.”
The complaint states: “At or about 10:30 a.m., plaintiff observed the police marching in formation. Plaintiff, along with numerous journalists, followed the police down Butler Street to the corner of 32nd Street and Liberty Avenue.
“Because of the police activity she was observing, plaintiff became concerned and attempted to leave the area.”
That’s when defendant John Doe Officers Nos. 1-3 “activated an LRAD without warning, causing a continuous piercing sound to be emitted for a number of minutes.”
The complaint continues: “The LRAD was affixed to a motor vehicle that was about 100 feet away from her and moving along the street.
“When the LRAD was activated, plaintiff suffered immediate pain in her ears, and she became nauseous and dizzy. She developed a severe headache. She was forced to sit down and was unable to walk.”
Piper says she was “an innocent bystander,” and that “When the LRAD was activated, there was no imminent threat of harm to the police or other individuals, and defendants and/or their agents, servants and/or employees had ample and abundant time to determine how and/or when to activate the LRAD.”
She says the police “were aware, from warnings by the manufacturer, that the use of the LRAD was capable of causing permanent hearing damage and other injury, and said defendants deliberately disregarded the significant risk of bodily harm,” and that they did it with no warning, in fact, that they “deliberately failed to warn”.
She seeks damages for pain and suffering, lost earning capacity, “permanent loss of a bodily function,” medical expenses, negligence, and constitutional violations.
She is represented by Witold Walczak, by Sara Rose with the ACLU, by Michael Louik with Rosen Louik & Perry, and by Thomas Hollander, all of Pittsburgh.