France to probe Pakistan arms deal kickback allegations

PARIS: France is to probe allegations of kickbacks on arms deals with Pakistan used to fund political campaigns following a suit lodged by relatives of French engineers killed in a 2002 Karachi bombing.

Investigating magistrate Renaud van Ruymbeke is to probe allegations that a company set up with President Nicolas Sarkozy's approval channelled money from arms deal commissions to fund political activities in France, a judicial source told AFP on Thursday.

French investigators have since 2008 been probing allegations that the cancelling of commissions for one of the arms deals prompted the attack that killed 11 French engineers and three others in Pakistan in 2002.

The state prosecutor, who unlike an investigating magistrate is subordinate to the justice ministry and therefore the government, has previously said that there were no grounds for a corruption investigation.

The new suit explicitly sought "magistrates who are independent of political power," said the lawyer for the victims' relatives, Olivier Morice.

"For us, this is a considerable victory. This is proof that our case is well-founded," he said. "This is proof that this is a matter of importance at state level."

French media have previously quoted Luxembourg police as saying that Sarkozy oversaw the establishment in Luxembourg of two companies, Heine and Eurolux, when he was budget minister under former prime minister Edouard Balladur.

Balladur and Sarkozy, who served as spokesman for Balladur's 1995 presidential campaign, have repeatedly dismissed allegations of illegal party funding.

Balladur lost the 1995 presidential election to Jacques Chirac, who promptly cancelled commissions that were allegedly due to be paid to Pakistani officers.

In May 2002 a bomb in Karachi killed 11 French naval engineers who were in Pakistan to build the submarines, possibly in revenge for the cancelled bribes.

The government has said that the practice of the budget minister authorising such deals was ended in 1992.