Arms dealer at centre of Sarkozy Libyan funding claims arrested amid fears he was set to flee country

Ziad Takieddine, who was a key intermediary between Sarkozy's entourage and the regime of Colonel Gaddafi and an important figure in the alleged illegal funding of the 1995 presidential campaign of Sarkozy’s political mentor and former prime minister Edouard Balladour, has been detained by police who suspect he was preparing to quit the country. The Franco-Lebanese businessman, who is under formal judicial investigation and forbidden to leave France, is said to have paid 200,000 euros to secure a Dominican Republic diplomatic passport (see above). Fabrice Arfi, Karl Laske, Michel Deléan and Albert Michel report.

Fabrice Arfi, Karl Laske, Michel Deléan and Albert Michel

30 May 2013 à 17h33

This article is freely available.

Franco-Lebanese arms dealer and businessman Ziad Takieddine, a key figure in two major political and financial scandals, has been arrested by French police officers who suspect he was planning to flee the country. Takieddine was arrested on Thursday morning by members of the national financial and tax investigation unit the Division nationale d’investigations financières et fiscales (Dniff).

Investigators had discovered that the businessman, who in September 2011 was asked to surrender his passport, paid 200,000 euros for a diplomatic passport from the Dominican Republic. That document, a copy of which is shown below, was issued in January 2013.

According to Mediapart's sources the payment for the passport came from one of Takieddine's accounts at the Lebanese bank Fransabank, via a Luxembourg-based lawyer who is close to the businessman. Having been placed under formal investigation in the affair linking arms sales commissions with illegal campaign funding in France in 1995, Takieddine is under strict judicial supervision. This includes a ban on him leaving French territory. According to Europe 1 radio Takieddine's home in Paris was also searched on Thursday morning, while two other men suspected of having helped Takieddine buy the passport were also detained for questioning. They are said to run an Panamanian-American company.

The Dominican Republic does not have an extradition agreement with France. It is understood that a general in the Dominican army who reportedly helped Takieddine obtain the passport is also under suspicion. Takieddine's lawyer Francis Vuillemin said on Thursday evening that his client had “never had the intention of leaving French territory”.

One mystery is how Takieddine would have raised the money to buy a passport; technically he has no funds as his vast portfolio of property and offshore bank accounts have all been sequestered by the French judicial authorities. On 18th October 2011 a police statement sought to value the businessman's various holdings, noting that on 23rd October 1998 they were “valued by Ziad Takieddine himself at 97.2 million euros”.

The answer appears to be that in March Takieddine was able to sell the company that ultimately owned the luxury villa in the south of France where he entertained political and business contacts. This company, which in turn owned a property firm in Luxembourg, is one of a number of property businesses of which Takieddine is the real owner, sheltering behind various screen companies that have been put in place. When Mediapart contacted the property manager who bought the company that owns the villa, Jean-Pierre G., he declined to comment other than to say: “I didn't buy this company from Ziad Takieddine.”

Ziad Takieddine, 63, who holds both French and Lebanese nationalities, once enjoyed close links with the the inner circle surrounding Nicolas Sarkozy both before and during the time that the latter was president. Those he had ties with include Jean-François Copé, the current president of the centre-right UMP party and a former budget minister, and Claude Guéant the former French interior minister and a longstanding and close ally of Sarkozy.

In September 2011 Takieddine was formally placed under investigation - one step short of charges being brought - for “misappropriation of company assets and funds” as part of his suspected role in the illegal financing of former French prime minister Edouard Balladur's unsuccessful 1995 presidential election campaign against Jacques Chirac. Nicolas Sarkozy was Balladur's budget minister and, in 1995, his presidential campaign spokesman.

That investigation has established that Takieddine was imposed by Balladur's government as an intermediary both in the 1994 sale of the three Agosta-class submarines to Pakistan, and that of three French La Fayette frigates to Saudi Arabia, a deal codenamed Sawari 2, at the end of 1994.

Takieddine and his associates were promised the equivalent of 33 million euros in secret commissions for the Pakistan deal, and 213 million euros for the frigates sale to Saudi Arabia.

This probe into alleged illegal campaign funding was initially prompted by evidence found in a separate ongoing judicial investigation in France into the 2002 murders of 11 French naval engineers in the Pakistani port city of Karachi, where they were helping to build one of the three Agosta submarines. It is from this case that the political funding scam has been dubbed in France ‘the Karachi affair' (see a Q&A guide to the Karachi affair here and a video presentation here).

The engineers were killed in a suicide bomb attack, which both France and Pakistan initially claimed was the work of terrorists. However, the investigation into their murders, led by Judge Marc Trévidic, has since uncovered strong evidence that the attack was in revenge for the non-payment of bribes, officially described as commissions, promised during the conclusion of the Agosta submarine sale to several Pakistani officials.

After his election as president in 1995, Chirac retaliated against Balladur by ordering the halting of all ‘commission' payments suspected of being re-routed to France. While some had already been paid, this blanket order blocked others that were staggered over several years.

The Libyan connection

Takieddine is also a major figure at the centre of claims that Sarkozy's own presidential campaign in 2007 was funded to the tune of 50 million euros by the Libyan regime of Colonel Gaddafi. A formal judicial investigation into those allegations was launched in April. It was Takieddine who, in 2005, had introduced Sarkozy, then interior minister, and Sarkozy's close ally Guéant, to Libyan regime insiders.

In December 2012 Judge Renaud Van Ruymbeke, the examining magistrate probing the 1995 illegal campaign funding allegations, questioned Takieddine over his arrest by customs officials on March 5th 2011, after landing at Le Bourget airport near Paris in a private jet from Libya carrying 1.5 million euros in cash. Takieddine told the judge: “I can provide you with elements that exist on the financing beyond 50 million euros of the 2007 campaign of Nicolas Sarkozy.”

The arms dealer also claimed that “the important period was during December 2006 and January 2007”, adding that Guéant, at the time chief-of-staff to interior minister Sarkozy, gave Bashir Saleh, Gaddafi’s then chief-of-staff, “the banking details necessary for the payments”.

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For more stories linked to the themes in this article see:

Gaddafi funding of Sarkozy election campaign: the proof

Exclusive: secret report describes Gaddafi funding of Sarkozy's 2007 election campaign

Exclusive: how Sarkozy's team sought grace for Gaddafi's murderous henchman

Exlusive: how President Sarkozy's team dealt with Gaddafi

French IT group Bull horned by libyan internet espionage deal

The French-built stealth offroader that may be hiding Gaddafi

'Everyone's in the merde': the secret cash funding scandal bringing down the house that Sarkozy built

The Sarkozy aide and his secretly-funded Colombian mansion

French political funding scandal reveals a tale of two 'Titty's

Exclusive: British witness in French funding scandal hits back at ‘protected’ arms dealer