Defense System

The deluge of revelations in France about suspected corruption in the Rafale deal began in 2018 with a seemingly unlikely protagonist—Julie Gayet, an actor and the partner of the former French president François Hollande. Word got out that, some two and a half years earlier, the Indian businessman Anil Ambani had stepped in as a patron for one of Gayet’s films. Just days after Ambani's generous gesture, Hollande, on a state visit to India, signed a memorandum of understanding for the delivery of 36 Rafale fighter jets, built by the French defence manufacturer Dassault Aviation. As part of the deal, worth a reported €7.87 billion, half of the purchase value was to be re-invested in India. Ambani’s debt-ridden Reliance Group, which had only the barest experience in defence manufacturing and none at all in aviation, emerged as the main beneficiary of this “offset.”

There was a flurry of denials that these events had any connection, but Hollande’s line of defence was hardly ideal. Speaking to Mediapart, the French outlet behind many key disclosures about the Rafale deal, he said that the financing for Gayet’s project could only have been a coincidence, since the offset partner had been proposed by the Indian government. This added fuel to another burning question: was the Indian government, under Narendra Modi, guilty of favouring an undeserving party as a beneficiary?

At this point, the response of the French media was little more than flippant. One typical article stated that Gayet and Hollande had “found themselves” in the middle of a national scandal in India but said nothing about possible corruption in France’s top government and corporate circles. Another seemed embarrassed at Hollande’s “enormous blunder” in fingering the Indian government, as if the real problem was his failure to keep such secrets when a massive arms-export deal was at stake.

Two years on and after many more revelations, the Rafale deal seems murkier than ever, with French conduct not exempted. The anti-corruption NGO Sherpa, led by the lawyer William Bourdon, lodged complaints in 2018 and 2019 with the Parquet National Financier, or PNF, which prosecutes serious economic and financial offences, but both were turned down. It was only in June this year that a court opened a judicial probe to look into a fresh complaint filed by Sherpa in April 2021, following more disclosures by Mediapart.