The verdict delivered in the Karachi Affair on Monday June 15th is an historic one. According to legal experts, it is the first time in France that a criminal court has ruled that a presidential campaign – in this case involving prime minister Édouard Balladur in 1995 – was funded by kickbacks from state arms deals.
It is true that many other political-financial cases that have reached the courts in recent years have also rocked the French political world, both on the Right and Left as well as elsewhere on the political spectrum. But unlike the Paris criminal courts on Monday none of them, from the Elf Affair to Angolagate, from the Urba Affair to the Bettencourt scandal, had established the hidden financing of a French presidential election campaign through the misappropriation of funds involved in government deals with foreign powers. In this case the foreign powers were Saudi Arabia and Pakistan.
Enlargement : Illustration 1
The main defendants in the Karachi case, who were all given prison sentences (see Mediapart's report here), are thus far 'just' political understudies. Nicolas Bazire was prime minister Balladur's chief of staff between 1993-1995 and then campaign director for the latter's failed bid to become president in 1995. Renaud Donnedieu de Vabres, 66, a former culture minister and junior minister for European affairs, was at the time of the scam a special advisor to defence minister François Léotard, the man who signed the arms deals involved. And Thierry Gaubert was an advisor to then budget minister Nicolas Sarkozy, who approved the special dispensation for the hidden commissions in the case which went on to become kickbacks that made their way back into France. All of those found guilty have a right to appeal against their convictions and sentences.
These men all worked for prime minister Édouard Balladur and helped in his frantic attempt to get elected to the Élysée, and all of them crossed swords at this period with President Jacques Chirac – who beat Balladur in 1995 - and Chirac's supporters, in a fratricidal war from which the French Right has never really recovered.
While Chirac himself was convicted in 2011 by a criminal court for “misuse of public funds” and “breach of trust” in an altogether different affair dating from his time as mayor of Paris, Édouard Balladur, who is now 91, and François Léotard, now aged 78, are soon going to stand trial in a different kind of court over the Karachi Affair. They will appear before the Cour de Justice de la République (CJR), a special court reserved for the trials of ministers over events that took place in the exercise of their ministerial duties.
As for former president Nicolas Sarkozy, he was initially targeted in the investigation led by Judge Renaud Van Ruymbeke into the Karachi Affair but managed to avoid being involved after some clever legal footwork, as Mediapart has reported. However, the ex-head of state still faces three cases in which he is under suspicion. In two of these cases – the phone-tapping case known as the Bismuth Affair and the party funding scandal known as the Bygmalion Affair – he is due to stand trial and in the third, the allegations of Libyan funding of his 2007 presidential campaign, he has been placed under formal investigation in relation to three separate allegations, including “corruption”.
Beyond the particular facts and individuals involved, what the Paris criminal court's verdict in the Karachi Affair has provided is a rare object lesson in the weaknesses of a democracy faced with something which has the capacity to destroy it: its own corruption. The whole judicial process represents a dizzying dive into the heart of the state and its deepest failings. It delves into the depths of the state's often-tolerated immorality and the greed that lurks there.
For those who were convicted on Monday were not just an ordinary group of people. These were reputable and reputed figures, part of the elite. They belonged to the highest ranks of society and were sheltered from everything, especially need. Let us take Renaud Donnedieu de Vabres as an example. Having worked in the shadows of François Léotard, he himself became a minister before going off to work in the private sector. Then there is Nicolas Bazire. Having served at the highest levels of the state he went off to work first for the Rothschild bank and then for the giant luxury goods group LVHM. In 2010 he declared an income of 3.7 million euros, more than enough for him to lavish attention on his beloved horses and stables.
Even though the facts at the heart of the Karachi Affair are old – they date back to 1994 and 1995 – this case is in no way a museum piece. It is in fact a mirror held up to a flawed system whose machinery, under the control of new faces and in new forms, is in danger of persisting – and in some respects is persisting – if we do not remain on our guard. That is why this and other cases demonstrate the need for independent journalists, feisty lawyers, tenacious associations and unfettered police officers and judges to tackle abuses of the system.
Enlargement : Illustration 2
What lies at the heart of the Karachi Affair?
We sometimes have a tendency to forget this, but above all this is the story of a state that corrupts. This was shown by the judicial investigation. In order to obtain deals with Pakistan – for submarines – and Saudi Arabia – for frigates and weapons – the political and military classes of these two countries had to be massively corrupted. It is true that in the 1990s this practice was tolerated, and corruption was even tax-deductible for companies which indulged in it. But that says a great deal about the Stone Age ethics that we come from and the extent to which political, diplomatic and industrial relationships can get rigged between states who organise the global circulation and concealment of dirty money.
Afterwards it was the corrupting state which itself became corrupted. In fact the court's judgement confirmed this: part of the commissions paid to the intermediaries who were imposed on the arms deals at the last minute – the network represented by businessmen Ziad Takieddine and Abdul-Rahman El-Assir who were also both given jail terms on Monday – returned to France in the form of retro-commissions to fund, in particular, Édouard Balladur's political ambitions.
It was in the end the failings of a democracy which was thought to be based on control and checks but which was instead indulging in schemes and plots. For Balladur's rigged presidential campaign accounts were – incredibly - approved by the country's top constitutional body the Conseil Constitutionnel, even though it was fully aware of the facts. The Conseil Constitutionnel's president at the time was the former socialist minister Roland Dumas, who is today aged 97.
One phrase in Monday's judgement that touches on this issue and which has been largely overlooked, is worth pausing to consider. “It appears, incidentally, that the campaign accounts of candidate Édouard Balladur were approved by the Conseil Constitutionnel in circumstances likely to raises doubts over the impartiality of this top jurisdiction,” noted the criminal court. To use the words of the Sicilian prosecutor Roberto Scarpinato in another context, the system was working as a form of “oligarchy disguised as a democracy”.
This episode reminds one of the extent to which corruption is, as the American academic and specialist on the issue Robert Klitgaard has explained, a rational crime. And one that can be summed up in an equation which can prove devastating for democracies that do not take this scourge seriously enough: “Corruption equals monopoly plus discretion minus accountability.”
The question today is: are things changing?
After the structural changes made in French public life following the tax scandal involving budget minister Jérôme Cahuzac in 2013, and the shock of the jailing of former mayor Patrick Balkany (since released), after recent developments in the Libyan funding affair, which could perhaps become the biggest French scandal of all, and now after the historic judgement in the Karachi Affair, the answer is: perhaps. If only a little.
Unless that is, like the famous line from the Italian novel The Leopard, everything is changing, so that everything can stay the same. There are indeed reasons to remain worried and for citizens to stay on the alert and avoid the fate of the frog in the famous fable, which gets used to the slowly rising temperature of the water even though it ultimately risks being boiled to death.
Has the Karachi verdict prompted special editions in newspapers? Has it led the news on the main evening and morning bulletins? Has it provoked a wave of reaction from the political classes? Has it inspired newspaper editorials? Has it led to a debate in society about the role of corruption in France, which some seek to reduce to the level of a minor ailment of democratic life, even though our judicial record on the issue here in France is shameful among Western countries?
More than that, have the political authorities given the Republic's state prosecutors – who are currently answerable to the Ministry of Justice - full statutory independence? Has the Cour de Justice de la République been abolished, to ensure that ministers are answerable to the law like anyone else? Have staffing levels at the anti-corruption police, who are never congratulated for their successes, seen a major boost?
The answer to these questions is an emphatic no.
Why? Because of the “power of money”, to employ the title of a short article written in 1935 by the Russian writer Isaac Babel ('The Complete Works of Isaac Babel' were published by Picador in 2002), who was executed by Stalin's regime in 1940.
In 'The Power of Money' Babel said of money: “This canker is devouring [this country], so wonderful in its diversity and wealth, this country of great scientists, poets, and artists.”
The country Babel was writing about was France.
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- The French version of this article can be found here.
English version by Michael Streeter