by Ganesh Sahatevan
It is being reported that DCNS of France is to be awarded the AUD 50 billion contract to build Australia's next generation of submarines.
Meanwhile, there has been no commentary in Australia about DCNS's history of corruption.
Malaysia's government has denied allegations of corruption in its $1.25 billion purchase of two submarines as it responded for the first time to a French investigation into alleged bribery payments in the deal.
The allegations have emerged in a French investigative case examining whether French shipbuilding giant DCNS paid bribes to Malaysian officials.
Malaysian human rights group SUARAM and its French lawyers have alleged that DCNS bought classified Malaysian defence ministry documents to help its bid for the 1 billion euro ($1.25 billion) contract it won in 2002. They say investigation documents show that about 36 million euros ($44.90 million) were paid by Thales International, a subsidiary of DCNS, to a company called Terasasi, controlled by a former associate of Najib.
The Taiwanese government has filed a US$98.4 million lawsuit against the French state-owned DCNS over a long-running, massive corruption case that puts added pressure on the defense contractor at a time when it faces multiple investigations that could bring down top French politicians.
The allegations, announced by Taiwan’s Defense Minister Kao Hua-chun in Parliament last week, are also an indication that the French contractors apparently continued with illegal activities well after the original scandal was uncovered. Kao said additional kickbacks prohibited by a 1996 order agreement have been found relating to supplying parts for the problem-plagued stealth frigates, which cost US$2.8 billion in 1991. Taiwan is seeking the additional penalty for alleged violation of the 1996 agreement, bringing the total to well over US$1 billion.
The purchase of the six frigates has been marked by earlier allegations of massive corruption, multiple murders, and demands for fines against the French shipbuilder for US$950 million, most of it already owed by the defense contractor and the French state under international court rulings. The French government has already agreed to pay €457 million in damages to Taiwan, which is a big enough amount to require an emergency amendment to the national operating budget.
In Pakistan,The Karachi Affair
So convoluted, one report is reproduced in full:
Political scandal brews over 11 Frenchmen killed in Pakistan
By Michael Cosgrove Jun 19, 2009 in Politics
A major political scandal is gaining momentum in France after revelations that 11 Frenchmen killed in a 2002 Karachi bus bombing were victims of a Pakistani plot to punish France for non-payment of commission on a deal involving the sale of submarines.
Not only is it a scandal here in France, but it may well turn into an international affair.
The Karachi bombing victims were all engineers employed by the DCN, the French company which holds a quasi-monopoly on the construction of French warships and submarines. The attack also killed three Pakistanis and injured many others.
They were in Pakistan to work on three Agosta 90 B submarines which were sold to the Pakistan military in a deal signed in 1994. Payment was to be spread over ten years and, as is usual in business deals involving military hardware, commission was promised to the middlemen involved. These middlemen included Pakistani and Saudi Arabian nationals. Saudi Arabia has traditionally been a source of cash funding for Pakistan, and its role in the deal was that it paid up front for the submarines.
The attack shocked the French, who immediately sent investigators to Karachi. They almost instantly claimed that Al Qaida, which was very active at that time, was behind the bombing. The affair slowly drifted out of public view in the months that followed.
It has resurfaced with a bang with revelations that the attack was indeed carried out by Islamic militants, but with the help of the Pakistani military and secret services.
The claims have been made by family members of those killed, lawyers representing them, and even judges, in the context of the official enquiry into the bombing, which is still ongoing.
At the time the deal was signed, French politicians, notably Edouard Balladur and Jacques Chirac, were trying to outdo each other in their search for campaign funds for the upcoming Presidential elections in 1995. Balladur was the French Prime Minister at that time, and as such he was an essential player in any international arms deal.
Balladur's Budget Minister at the time was current French President Nicolas Sarkozy. Sarkozy supported Balladur's candidature for the Presidency, a gesture for which Chirac would never forgive him.
The deal represented a lot of money and a source of campaign funding too.
Balladur was beaten in the election however and Chirac became President. Soon afterward, he ordered the cancellation of the progressive commission payments being made to senior Pakistani military personnel and others.
“The Al Qaida track has been totally abandoned. The mobile for the attack now appears to be linked to the stopping of commission payments. This is turning into a state affair” said Olivier Morice, lawyer for seven of the bereaved families, after a recent meeting with anti-terrorist judges Marc Trévidic and Yves Jannier.
“The commission payments (to Pakistan) were stopped when Jaques Chirac became President in 1995 in order that retro-commissions (..destined for the financing of Balladur’s campaign..) were not paid” he continued.
One of the anti-terrorist judges “said that this scenario had a cruel logic to it” said Magali Drouet, the daughter of one of the victims.
In this scenario, the attack was carried out in reprisals for the non-payment of commission. The current Pakistani President, Asif Ali Zardari, was the Investment Minister at the time in his wife Benazir Bhutto’s government. Zardari has been accused of corruption and money laundering many times.
Drouet went on to say that “this is a state-level affair which implicates France, Pakistan and Saudi Arabia, a source of funding for Pakistan.”
This new track was uncovered last year by police but has only just been revealed. The police, acting under orders from judges, were investigating affairs of corruption and arms deals. They found documents on the premises of the DCN (now called DCNS) which revealed the names of companies who transited arms sales commissions.
One of the documents mentions the “instrumentalisation” of Islamic militants by Pakistani Secret Service and Army personnel. It says that “the Karachi attack was carried out thanks to connivance from within the Army and from elements of support for Islamic guerrillas” within the Pakistani Secret Services. It goes on to mention that the bombing was carried out “for financial reasons....designed to obtain the payment of unpaid commission.”
In another strange development, investigators are also looking into the judicial aspects of the bombing enquiry carried out at the time by French police in Pakistan. The judicial enquiry was suddenly halted in 2003.
Initially included in the evidence was a collection of photographs taken by Randall Bennett, the head of the American diplomatic security service in Pakistan at that time. Bennett also ran the investigation into the kidnapping of Daniel Pearl, the American journalist later executed by Al Qaida.
The photographs in question were those that Bennett took at the scene of the bombing. They were later destroyed under a French court orde
Read more: http://www.digitaljournal.com/article/274427#ixzz46tS0Ih00