The former French prime minister Édouard Balladur has been cleared of financing his failed 1995 presidential campaign with illegal kickbacks from international arms deals.
A Paris court found no evidence the 91-year-old rightwing politician had committed any wrongdoing. He denied the charge of complicity in the misappropriation of public funds.
Balladur argued he was not aware of any kickbacks from the contracts in what became known as the Karachi affair and thought the massive injection to his campaign funds came from the sale of T-shirts and other items at rallies and election meetings.
However, Balladur’s former defence minister François Léotard was given a two-year suspended sentence and a €100,000 (£86,000) fine for “complicity” in the misuse of public funds.
Neither man was present on Thursday to hear the judgment at the court of justice of the republic (CJR), the only court empowered to try former government members for offences committed while in office.
Léotard said he would appeal against the conviction. “I am ashamed for French justice and its dangerous abuses. I will always defend the freedom of political decision-making,” he said in a statement.
The judgment comes four days after the former president Nicolas Sarkozy was convicted of corruption and influence peddling and given a three-year sentence, two of them suspended.
Sarkozy is appealing against the judgment, saying he is the victim of a “profound injustice” and is considering taking his case to the European court of human rights to clear his name.
Sarkozy was the budget minister in Balladur’s government and was also treasurer and spokesperson for Balladur’s presidential campaign.
The Karachi affair is one of France’s longest-running political scandals. Politicians were alleged to have received kickbacks on French arms sales, specifically the sale of frigates to Saudi Arabia and three Agosta-class submarines to Pakistan in the 1990s.
To secure the contract large commissions were allegedly paid to Pakistani politicians and military, as well as commissions to various international middlemen. Paying commissions to intermediaries was not against the law at the time, but the investigation against Balladur centred on whether about €2m of illegal kickbacks were secretly funnelled back to France to fund his 1995 presidential campaign.
As budget minister, Sarkozy would have authorised the financial elements of the submarine sale. At the time he was also treasurer and spokesperson for Balladur’s campaign.
Balladur was defeated in the 1995 election by Jacques Chirac, who ended the paying of commissions owed on the submarine sale. This is widely believed to have prompted a retaliatory suicide bombing in Karachi in May 2002, in which 11 French naval engineers and two Pakistani nationals died.