President Zardari suspected of graft in sale of submarine

Pakistani President Asif Ali Zardari has once again been accused of having received millions of dollars in kickbacks from the sale of three French submarines to the Pakistani Navy way back in 1994. In addition, investigators say the non-payment of the full amount of the agreed kickbacks may have led to the murder of 11 French nationals in a 2002 terrorist attack in the city of Karachi.
A French newspaper daily Liberation has claimed having acquired documents that allegedly show that during the second tenure of her wife Benazir Bhutto as the prime minister, Asif Zardari had received $4.3mn in kickbacks from the sale of three Agosta 90 submarines for 825mn euros (currently $1.237bn). The daily claims that these documents were sent to the Pakistani National Accountability Bureau (NAB) by the British authorities in April 2001 and indicate that Zardari received several large payments into his Swiss bank accounts from a Lebanese businessman, Abdulrahman el-Assir, in 1994 and 1995. According to the report, a former executive of the French naval defence company DCN, French authorities chose el-Assir to act as intermediary in the deal. He allegedly deposited a total of $1.3mn in Zardari’s bank accounts between August 15 and 30, 1994, one month before the submarine contract was signed, and then $1.2mn and $1.8mn one year later.
According to DCN employees who testified in the 2002 Karachi terrorist attack investigation, the kickbacks to Pakistan in the deal totalled 10% of the purchase amount, with 6%, or $49.5mn, going to the military and 4%, or 33mn euros, being funnelled to political circles. In 2001,a former Pakistani Navy chief-of-staff Mansour Ul-Haq was arrested for his part in the deal and forced to repay $7mn, the daily says. Legal proceedings against Asif Ali Zardari were dropped in April 2008, several months before he was elected president. However, the fact remains that Zardari, the husband of the assassinated former Pakistani president Benazir Bhutto was imprisoned from 1997 to 2004 on corruption charges unrelated to this affair.
The ongoing investigation in Paris into the May 8, 2002, terror attack that killed 11 DCN employees in Karachi may shed new light on the submarine purchase and his part in it. According to the French paper, the magistrate looking into the bombing has rejected the theory that it was the work of Al Qaeda. He is now considering the possibility that it was carried out by Pakistanis, either because only 85% of the agreed kickbacks to politicians had been paid or because of negotiations carried out by French authorities to sell submarines to India, Pakistan’s enemy.
However, the Pakistani authorities have strongly refuted the daily Liberation story. ‘This is actually new regurgitation of an old story which was already contradicted by French President Mr Sarkozy on July 11 this year as ‘untrue’, ‘malicious’ and ‘mischievous’. It is part of a media trial of PPP leadership which we condemn and dismiss with the contempt it deserves,’ Presidential Spokesman Farhatullah Babar said the other day in an official statement. Commenting on the report, the spokesman said the purchase of equipment by the armed forces of Pakistan was done through a proper competitive process under the supervision of the Ministry of Defence.
‘Mr Zardari was neither the president nor the prime minister nor the defence minister when the submarines referred to in the news item were purchased. The then ‘Admiral’ responsible for this purchase was investigated by the National Accountability Bureau. But no allegation of misdoing could be established by the investigation authorities against Mr Zardari,’ the spokesman said. Regarding the allegation about the killing of French nationals in Karachi, the spokesman said that President Zardari was in prison in 2002 when the unfortunate incident took place.
‘This indicates the motive behind leveling such baseless allegations against the Pakistani President. How can a person in prison arrange such high-profile killings,’ he added. ‘Allegations of kickbacks and involvement in the killing of French nationals against the person of the president are, thus, highly unfortunate and seem to be part of a malicious campaign launched against the head of state of the Islamic Republic of Pakistan,’ the presidential spokesman said.
It may be recalled that in 2003, an Anti Terrorism Court (ATC) had found two men linked to a jehadi group - Harkatul Mujahideen Al Alami - responsible for the murders, although they have since been acquitted by the Sindh High Court due to a lack of proof.