Cryptic document revives claims Gadhafi bankrolled Sarkozy's 2007 election

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When France last year became the first country to recognize rebel forces fighting Colonel Moammar Gadhafi, the Libyan state news agency warned that it knew of a "grave secret" about French President Nicolas Sarkozy.

What seemed then an empty threat gained a new life this week, just as Mr. Sarkozy is struggling to get re-elected for a second presidential term.

The French investigative website Mediapart reported on Monday that it had obtained a document suggesting that Col. Gadhafi funnelled money – or was asked to funnel money – to Mr. Sarkozy's first presidential campaign in 2007.

The document, according to the website, suggests that a controversial political insider with long-standing connections to French right-wing politics set up the "modalities" during the 2005 visit of a French trade delegation to Libya. The delegation's mission was to sell French arms and technology and reportedly included Mr. Sarkozy, then a minister in the government of President Jacques Chirac.

No evidence has emerged that the Libyan regime paid any money and Mr. Sarkozy has denied that he or his campaign – he was not officially a candidate for the presidency in 2005 – received or solicited funds from the Libyan dictator or his clan.

While the allegations are hazy, the report has added a potential new scandal for voters to mull over during the campaign. It has also cast a different light on France's role in the Arab Spring, serving as a reminder that before Mr. Sarkozy took a lead role in the NATO-led military intervention to topple the Libyan strongman, the French government had cozied up to Col. Gadhafi to sell him weapons and spy technology.

On Monday night, as the French President faced a live studio audience on TF1 network, a smirk appeared on his face as he listened to the anticipated question from the moderator of the show about whether Col. Gadhafi had helped bankroll his 2007 campaign.

"If he financed it, I have not been very grateful," Mr. Sarkozy told TV anchor Laurence Ferrari.

The website's allegation is based on a document filled with cryptic abbreviations and is connected to what has come to be known in France as the Karachi Affair, a murky and long-running scandal about arms deals and alleged political kickbacks that has festered for years in the background of French politics.

In its report, Mediapart said it had obtained a document prepared by Jean-Charles Brisard, a former government security adviser who had been questioned as a witness in a judicial probe into the Karachi Affair.

Mr. Brisard provided the document, dated 2006, to police and it was placed in the investigation file, Mediapart said.

The note reportedly summarized what Mr. Brisard had learned about an October, 2005, visit to Libya by Mr. Sarkozy, then France's interior minister, and by another minister and long-time Sarkozy confidant, Brice Hortefeux.

Translated, the note appears to say: "Modalities NS campaign financing settled during Libya visit NS + BH." It later mentions "50M" and "Swiss Bank" and "Pan," which Mediapart said refers to Panama.

The note also mentioned that "ZT" – which Mediapart said was a reference to Ziad Takieddine, a controversial French-Lebanese businessman who is well connected to several French politicians – helped with the sale to Libya of military communications gear and computer-chip ID cards.

The relationship between France and Libya changed drastically once the uprising started in February, 2011, and Mr. Sarkozy called for the Libyan leader to leave power.

Last March, one of Col. Gadhafi's sons, his onetime heir apparent Saif al-Islam, lashed out at Mr. Sarkozy in an interview with Euronews TV. "We financed his campaign and we have the evidence," he said. "We're ready to reveal everything. The first thing we're asking this clown is to return the money to the Libyan people."

In his denial on television on Monday Mr. Sarkozy did not specifically address details of the Mediapart allegations, and instead scolded Ms. Ferrari for bringing up the Euronews interview and accusing her of lending credence to "a regime of dictators, of assassins, with zero credibility."

Mr. Takieddine has also refuted the Mediapart report, without denying his role as an international fixer.

"Nothing happened between Libya and France without my knowledge, without me knowing directly or indirectly," he told France 24 television on Monday. "And I can tell you that nothing ever happened, not even for a penny, between Libya or Gadhafi and Nicolas Sarkozy."

Beyond the usual counterpoint of allegation and denial, the story added another touch to the long-running Karachi Affair, which erupted after 11 French naval engineers were killed in 2002 in a bombing in the Pakistani city. An ongoing judicial investigation into the bombing, and relatives of the victims, have suggested that the engineers were targeted because a promised commission was not paid to middlemen by the quasi-governmental French military manufacturer contracted to sell three submarines to Pakistan.

The investigation is reportedly also looking into allegations that kickbacks in that and other deals helped financed the failed 1995 presidential bid of then-prime-minister Edouard Balladur. Mr. Sarkozy was then Mr. Balladur's campaign finance manager.

While he admits to brokering contracts in Saudi Arabia, Syria and Libya, Mr. Takieddine has denied playing a role in the submarine deal.

The revelations come in the midst of an election campaign focused on domestic issues such as immigration and tax policy. On Tuesday, an opinion poll for the first time found that Mr. Sarkozy has caught up with his main challenger, Socialist candidate François Hollande, in advance of the first round of voting set for April 22.

In a survey conducted between Sunday and Monday, polling firm Ifop found that 28.5 per cent of respondents favoured the incumbent, against 27 per cent for Mr. Hollande. Ifop said, however, that Mr. Sarkozy would lose in the second round of the election.