Former Trump campaign manager Paul Manafort’s shady dealings with Ukraine are the basis for the current charges against him, but the veteran consultant has a long history of sketchy clients internationally, from Congo’s Mobutu Sese Seko to the Philippines’ Ferdinand Marcos. Less discussed in the United States is his role in one of the biggest scandals and unsolved mysteries in French politics. The Karachi Affair involved shady diplomacy, campaign corruption, and possibly a deadly terrorist attack—and Manafort was right in the middle of it.
The Karachi Affair requires a bit of explanation: In the early 1990s, France’s partly state-owned defense contractor DCN was looking to sell attack submarines to Pakistan’s navy and was competing with Germany for the contract. At that time, it was still legal for firms in France, and a number of other countries, to pay “commissions”—bribes, basically—to foreign dignitaries, in order to facilitate deals like this. (The practice has since been banned.) Payments were promised to a number of Pakistani officials—totally legal—and DCN got the contract in 1994.
At this time, Socialist François Mitterand was nearing the end of his presidency, while the government was controlled by the center-right RPR party led by Jacques Chirac. Chirac had his ally Edouard Balladur serve as prime minister while he geared up for the 1995 presidential election. But Balladur decided he wanted to be president, setting up a a battle for the support of the French right between the two former friends. The problem for Balladur was that Chirac controlled the party and its war chest, so he needed to look elsewhere for funding. Allegedly, he looked to Pakistan.
According to French media reports, just before the submarine deal was signed, Balladur’s government added two extra intermediaries, both Lebanese businessmen, to be paid commissions. These guys allegedly channeled money through a shell company back into Balladur’s campaign: An extra 10 million francs (roughly $1.7 million) in cash—one-fifth of his total funds—was reportedly paid into his campaign account at almost the same time. In other words, Balladur is accused of disguising illegal campaign contributions as legal bribes.
That 10 million francs wasn’t enough, as it turned out. Chirac beat both Balladur and Socialist challenger Lionel Jospin to become president, and immediately set up an investigation and halted payment on the commissions.
In 2002, a suicide bomber drove a car packed with explosives into a bus in Karachi, Pakistan, killing three Pakistani nationals and 11 French engineers who had been working on the submarines that had been sold as part of the deal eight years earlier. The attack was initially blamed on al-Qaida, but no one in the terrorist group ever claimed responsibility for it and that explanation was later ruled out by investigators. In 2008, the investigative website Mediapart reported on the existence of an internal DCN report suggesting that the attack may have been a reprisal against France for its nonpayment of the commissions.
As if that weren’t shocking enough, by this time, the president of France was Nicolas Sarkozy, who had been Balladur’s budget minister and a spokesman for his campaign back in 1995. Families of the killed engineers demanded legal action against Sarkozy, arguing that it would have been impossible for him not to know about the payments.
Sarkozy was protected by immunity but faced investigation after he left office. (This was just one of a number of high-profile corruption scandals involving Sarkozy.) The investigation is ongoing: Balladur, who denies any wrongdoing and has been out of office for more than two decades, was placed under formal investigation just last May.
So what did Balladur do, you might be wondering, with the money that he was willing to tarnish France’s reputation and possibly put French lives at risk to obtain? Well, he gave at least some of it to Paul Manafort.
In 2013, Manafort told French investigators that he had been paid $52,000 to conduct an opinion poll and $34,975 to craft a campaign strategy for Balladur. The money came from a bank account held by Abdul Rahman el-Assir, one of the two Lebanese businessmen who served as middlemen in the submarine deal. The other middleman, ski-resort-owning arms broker Ziad Takieddine—who was later arrested while trying to flee France on a false passport—acted as Manafort’s translator in a meeting. French media described Manafort as “a key link connecting Balladur with the middlemen.”
Balladur’s whole scheme apparently didn’t raise any red flags for Manafort at the time, just as the consultant’s background didn’t raise any red flags for Donald Trump last year.