Sarkozy embroiled in arms sale scandal

Nicolas Sarkozy, the French president, has become embroiled in a fresh political funding scandal involving alleged kickbacks on a 1994 arms sale to Pakistan and the death of French naval engineers in a bomb attack, the FT reports. The so-called Karachi affair threatens to plunge Mr Sarkozy’s centre-right UMP party into civil war 18 months before the presidential election. The government faces allegations of a cover-up from the socialist opposition after it denied investigators a warrant to search France’s security services in connection with the corruption affair. Dominique de Villepin, a former prime minister and Mr Sarkozy’s political arch-rival, is to testify this week before a judge who is investigating the claims that money from the sale of three submarines to Pakistan in 1994 was illegally channelled to the presidential campaign of Edouard Balladur, the then prime minister. Mr Sarkozy was a close ally of Mr Balladur and spent two years as budget minister in his government. He became spokesman for Mr Balladur’s 1995 presidential campaign. Mr Villepin backed Jacques Chirac in the race and later became his chief of staff.