Sarkozy hit with new allegations over arms kickbacks

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President Nicolas Sarkozy is facing new allegations of involvement in an old weapons sales scandal four months ahead of French presidential elections, according to court testimony disclosed by the daily Libération.

The newspaper yesterday (2 January) quoted testimony from a former defence official who said Sarkozy authorised in 1994 the creation of a shell company to pay kickbacks on large French arms sales to Pakistan and Saudi Arabia. Sarkozy was budget minister at the time.

Gérard-Philippe Menayas, a senior Defence Ministry official at that time, told Judge Renaud Van Ruymbeke that Sarkozy had agreed establishing the Heine firm in Luxembourg, seen as pivotal in a scheme using kickbacks from arms sales to fund the unsuccessful presidential campaign of Edouard Balladur in 1995. Sarkozy was Balladur's campaign spokesperson.

"It is clear that the budget minister necessarily gave his agreement for establishing Heine… In view of the importance of the matter, such a decision could only be taken at the level of the ministers' cabinet," Menayas is quoted as saying.

Sarkozy has repeatedly denied any involvement in the affair, although two of his aides, Thierry Gaubert and Nicolas Bazire, have been already charged.

Commissions on arms sales were not illegal in France until 2000, but kickbacks to finance political campaigns are punishable by law.

Magistrates are also probing whether a 2002 Karachi bombing that killed 11 French engineers and two Pakistanis is linked to the affair. Al Qaeda was blamed for the blast. But French judges believe that the attack was orchestrated by Pakistani intelligence and military officials in retaliation for the failure of the French to pay them a $33 million commission previously agreed upon.

François Hollande, the Socialist candidate for the April-May presidential elections, called for full transparency over the arms deals at the centre of the controversy. Polls show Hollande leading the incumbent president.

Eva Joly, a Green party presidential hopeful, said it was "unavoidable" that Sarkozy would appear in court over the latest allegations.

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