Schandaal rond wapenhandel ondermijnt herverkiezing Sarkozy (en)
French President Nicolas Sarkozy i has been caught up in fresh allegations surrounding a French arms contract and subsequent bomb attack, a further embarrassment to the centre-right leader just 18 months before presidential elections.
During a recent search of files held by France's tax department, the judge investigating the case appears to have found "extremely interesting" documents detailing a system of kickbacks related to the 1994 sale of French submarines to Pakistan, reports Le Parisian daily newspaper on Tuesday (23 November).
Investigators are seeking to verify whether money surrounding the sale was illegally channelled back to the presidential campaign of Edouard Balladur, the then prime minister.
Mr Sarkozy served as budget minister for two years under Mr Balladur, and subsequently became his spokesman during his 1995 presidential bid.
Families of 11 French engineers killed in a 2002 bomb attack in Karachi have called on French magistrates to investigate whether a decision by the 1994 presidential winner, Jacques Chirac, to end the payment of "commissions" on the submarine contact, could have sparked the revenge attack.
Tensions surrounding the "Karachigate" affair hit new highs last Friday when Dominique de Villepin, a former prime minister and ally of Mr Chirac, said there were "very strong suspicions of illegal kickbacks" related to the 1994 arms deal.
The Elysée palace issued a lengthy denial and Mr Sarkozy launched into a verbal attack on one journalist who questioned him on the issue at a meeting of Nato leaders in Lisbon over the weekend.
"You talk rubbish, you verify nothing," Mr Sarkozy told the journalist, before parodying recent accusations made by former French defense minister Charles Millon (1995-97) who has also said he is convinced kickbacks took place.
"You are a paedophile, I'm deeply convinced; I've seen the secret services but I won't tell you which ones," Mr Sarkozy reportedly told the journalist, according to L'Express magazine, in an attempt to highlight a lack of evidence surrounding the case.
The fresh row comes at a sensitive time for Mr Sarkozy as he attempts to put the recent scandal surrounding L'Oréal heiress Liliane Bettencourt behind ahead of the upcoming presidential elections.
Opposition Socialists have also waded into the debate, with party spokesman Benoit Hamon saying on Monday that "the government owes the truth to the families [of those killed in the bomb attack]."
As well as the threat from the centre-right, possibly in the form of a 2012 presidential bid by Mr de Villepin himself, the growing standing of IMF i chief Dominique Strauss-Kahn i is also likely to make the current French leader uncomfortable.
The Socialist politician and former French minister has seen his stature rise in recent months following the IMF's role in several eurozone bail-outs.