IN May 2002, 11 French naval engineers were killed in a bomb blast in Karachi. Investigations by French journalists point toward the blast being directly linked to a contract signed in 1994 between the DCN, the French defence contractor, and the Benazir Bhutto government, for the sale of three Agosta B submarines to Pakistan.

This story was initially broken by Fabrice Arfi and Fabrice Lhomme in 2010 on the reporting website, Mediapart. In Le Contract: Karachi, l’affaire que Sarkozy voudrait oublier or The Contract: Karachi and the Affair Sarkozy Would Prefer to Forget, the two journalists expand on this incident and the related circumstances and provide the investigative background to their findings. The book also alleges that the perpetrator of the attack was not al Qaeda, as was originally propounded, but an ISI supported jihadi group.

Le Contract links the French tragedy to a politically motivated financial scam that took place in 1995 and which has been subject to a French judicial inquiry since 1997. It involves the electoral accounts of Edouard Balladur, who was the French prime minister between 1993 and 1995.

Balladur broke a pact he made with Jacques Chirac not to run against him in the presidential elections of 1995. When Chirac eventually won, the source of Balladur funds, which enabled him to pursue a presidential bid, was questioned, given that official party funds had been deployed for Chirac’s election bid. This led to the Chirac government launching an investigation, which also included a review of the Agosta contract.

The review brought to light suspected irregularities in the shape of ‘retro commissions’, whereby a part of the commissions that was to be paid to intermediaries in Pakistan may have been rerouted back to France and into Balladur’s electoral coffers.

Lending credence to this theory is the fact that the Agosta contract, which was worth 826 million euros (101.5 billion rupees), had all but been finalised in 1994, with commissions to Pakistan stipulated at 6.25 per cent of the value of the total (51.6 million euros or 6.5 billion rupees), when at the last minute, the Balladur government brought in two Lebanese businessmen, Ziad Takieddin and Abdul Rehman El Assir (the latter reportedly a friend of both Asif Ali Zardari and the naval chief of staff at the time of the signing of the contract, Mansurul Haq), into the deal. The commissions were then upped by another four per cent.

As a result, in 1996 Chirac cancelled payment on all outstanding commissions. He also took the precaution to request the Saudi government to intercede with the Pakistani establishment and smooth matters over.

The book names Mansurul Haq and businessman Amir Lodhi as the two principal Pakistani intermediaries (prior to the entry of Takieddin and El Assir) in the contract. Haq is identified as the intermediary for the military end of the deal (the money reportedly destined to finance jihadi groups in Kashmir and the tribal regions, as well as to support ISI operations in Afghanistan), while Lodhi was reportedly acting for the Bhutto-Zardari end of it. Irfan Qadir, the Prosecutor General for the National Accountability Bureau (NAB), is quoted as saying that although the commissions were split between the two, Haq took the blame for Lodhi too.

Based on the evidence presented, the book builds a plausible case that the Agosta deal may have been used by Balladur to illegally finance his election campaign. The link, however, between the cancellation of the commissions owed to Pakistani beneficiaries and the May 2002 attack is less clearly established.

The authors are certainly critical of the way in which the Pakistani authorities conducted the investigation into the attack and question whether this was a matter of incompetence or an attempt to suppress the truth. Though three men were arrested and even sentenced to death a year after the attack, they were released in 2009 due to lack of evidence.

Arfi and Lhomme also question the al Qaeda theory on the basis of various information threads gathered in Pakistan. This includes a fax sent a few days after the attack to Randall Bennett, the chief security officer at the US Consulate in Karachi, by his colleague. The fax details conversations with Pakistani naval officers, whom he says did not believe that al Qaeda was behind the attack. Rather, they appeared to be convinced it was aimed at sabotaging the Agosta project.

Moreover, a Pakistani employee of the DCN was mugged in Karachi in January 2002 and his mobile phone and briefcase containing details on DCN employees in Pakistan were stolen. Two days later, a magnetic bomb was found under the car of a French diplomat in charge of Afghan affairs in Islamabad. The bomb was not only timed to go off 18 hours later, but was of such low intensity as to cause minimal damage; a warning in other words.

Another incident cited as evidence of al Qaeda not being involved is that the Pakistani head of a company (Ali Engineering Works) working with the DCN escaped to Baltimore after the attack because of threats from the ISI.

However, the most convincing argument is on the basis of confidential reports compiled as part of the DCN’s own internal investigations into the attack. In fact, a great deal of the information contained in the book (especially with respect to the details of the Agosta contract and the names and roles of the intermediaries) is derived from these reports. The third report, dated September 2003, which was subsequently suppressed (until the authors gained access to it and turned it over to the investigating magistrate), is the most explicit in its conclusion that the attack was an act of revenge by the Pakistani military/ISI for non-payment of commissions.

The report bases its conclusions on the fact that although the Saudi government did use its influence with Pakistan to mitigate the impact of the lost commissions, by 2002 there had been a change in Pakistani ground realities. Most pertinently, the Musharraf government, under pressure from the US, had started to crack down on various jihadi groups, thereby angering their sympathisers. The report suggests that these new realities, combined with the cancellation of the commissions and the fact that Mansurul Haq had been forced by NAB to return the illegally acquired money (leaving him without any funds to pass on), led the ISI to activate jihadi groups to attack the engineers.

Yet another book, On nous appelle ‘les Karachi’ or They call us the ‘Karachis’, is a very different account of the same tragedy. Written by the daughters of two of the Fenchmen who were killed, it looks at what the families suffered.

A lot of the anger is directed at the DCN and the French government for the treatment of the bereaved families. According to the authors, the sense that their fathers’ deaths had become the centre of a cover up set in very early. Their anger has been compounded by the fact that nine years later there is still no outcome to the judicial inquiry. At the core of the bitterness expressed by these families is the fact that their family members may have died because of dirty political dealings and the apparent determination of France’s politicians and state functionaries to bury the matter permanently.

Despite the media attention the books received in France, the questions raised — was the Agosta contract used for financial fraud and was the ISI behind the murder of the Frenchmen — remain the subject of two separate judicial inquiries, both of which have yet to deliver a verdict. Given the generalised obfuscation displayed by the current French administration and the marked resistance to release classified documents to the courts (for reasons of ‘national interest’) it may be a rather long while before the courts are able to give a conclusive verdict.

It is a sensitive matter for the current administration, given that President Sarkozy was Balladur’s budget minister when the Agosta contract was reworked, and the implication that he may have been instrumental in restructuring the contract prior to finalisation cannot be ruled out. Much will depend on if, and when, the Socialist Party returns to power.

Neither book has been translated into English so far. However, readers interested in further details can access the Mediapart website which provides a fairly comprehensive report on what it calls “the Karachi scandal”.

On nous appelle ‘les Karachi’ (MEMOIR) By Magali Drouet & Sandrine Leclerc Fleure Noir, Paris ISBN 978-2-265-09220-4 253pp. €17,50 Le Contract. Karachi, l’affaire que Sarkozy voudrait oublier (investigative journalism) By Fabrice Arfi & Fabrice Lhomme Stock, Paris isbn 978-2-234-06239-9 362pp. €20,50