‘Sarkozy knew about arms kickbacks shell company`

President Nicolas Sarkozy knew about a shell company allegedly used to channel arms sales commissions to Pakistan.

Paris: President Nicolas Sarkozy knew about a
shell company allegedly used to channel arms sales commissions
to Pakistan and illegal party financing to France in the
1990s, French media reported on day.

The Liberation daily quoted testimony to a judge from a
former senior civil servant that in 1994 then-budget minister
Sarkozy authorised the creation of Luxembourg-based company
Heine to pay intermediaries in arms deals, notably with
Pakistan.

"Clearly the budget minister necessarily gave his
agreement for the creation of Heine," Gerard-Philippe Menayas,
former head of the DCNI defence ministry agency in charge of
naval exports, was quoted as saying.

"Given the importance of the matter, this decision could
only have been taken at the level of the minister`s personal
staff."

Several people, including aides to Sarkozy, are accused
of going to Switzerland to pick up cases of cash channelled
through Heine to finance then prime minister Edouard
Balladur`s unsuccessful 1995 presidential election campaign.

The payment of arms sales commissions was legal in France
until 2000, but the payment of kickbacks back to France was
and is illegal.

In 1995, Sarkozy was the campaign spokesman for his
mentor Balladur, as well as his budget minister, and the
complex case has threatened to derail the unpopular
president`s re-election bid later this year.

Magistrates are also probing whether a 2002 Karachi
bombing that killed 11 French engineers was revenge for the
cancellation of bribes secretly promised to Pakistani
officials.

A Luxembourg police report already in January 2010 said
that Sarkozy had given his agreement to set up Heine.

Sarkozy has repeatedly denied having anything to do with
the affair, although two of his aides, Thierry Gaubert and
Nicolas Bazire, have been already charged, as has former
minister Renaud Donnedieu de Vabres.

PTI

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