Govt rejects Zardari kickback allegations

November 12, 2009 by USA Post 

ISLAMABAD: The government has contradicted a report published in a local and a French newspaper that accuses President Asif Ali Zardari and military authorities of having received millions of dollars in kickbacks from the 1994 sale of three French submarines to Pakistan Navy.

‘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.

According to the report in French daily Liberation, President Zardari is suspected of having received millions of dollars in kickbacks from the 1994 submarines deal.

In addition, investigators believe that the non-payment of the full amount of the agreed kickbacks may have led to the death of 11 French nationals in a 2002 terror attack in Karachi.

The newspaper says it has acquired documents that show that Mr Zardari allegedly received $4.3 million in kickbacks from the sale of three Agosta-90 submarines for 825 million euros (currently $1.237 billion).

The documents which were sent to the Pakistani National Accountability Bureau (NAB) by British authorities in April 2001 indicate that Mr Zardari received several large payments into his Swiss bank accounts from a Lebanese businessman, Abdulrahman Al-Assir, in 1994 and 1995.

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 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 levelling such baseless allegations. 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, therefore, highly unfortunate and seem to be part of a malicious campaign launched against the head of state of the Islamic Republic of Pakistan,’ the spokesman said.

The Liberation report quoted a former executive of the French naval company DCN as saying that French authorities had chosen Al-Assir to act as intermediary in the deal and he allegedly deposited a total of $1.3 million in Mr Zardari’s bank accounts between Aug 15 and Aug 30, 1994, one month before the submarine contract was signed, and then $1.2 million and $1.8 million one year later.

According to DCN employees who testified in the terror attack investigation, the kickbacks to Pakistan in the deal totalled 10 per cent of the purchase amount, with 6 per cent, or $49.5 million, going to the military and 4 per cent, or 33 million euros, being funnelled to political circles.

In 2001, Pakistani Navy’s former chief of staff Mansour-ul-Haq was arrested for his part in the deal and forced to repay $7 million, the daily says.

Legal proceedings against Mr Zardari were dropped in April 2008, several months before he was elected president. He was imprisoned from 1997 to 2004 on corruption charges unrelated to this affair.

The president, according to the report, is one of his country’s richest men, with a net worth estimated at $1.8 billion.

The ongoing investigation in Paris into the May 8, 2002, terrorist attack that killed 11 DCN employees in Karachi may shed new light on the submarine purchase.

The victims were in Karachi to complete work on the three submarines. According to French media, 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 per cent of the agreed kickbacks to politicians had been paid or because of negotiations carried out by French authorities to sell submarines to India.

In any case, some French parliamentarians are now demanding to be allowed to look into how the submarine contract with Pakistan was negotiated and executed.

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