Publication: Algarve Daily News Issued: Date: 2011-12-15 Reporter:

Submarine contract - €62 million paid in bribes



Algarve Daily News

Date 2011-12-15

The two former executives of German company Ferrostaal, being tried for the bribery of foreign public officials in the sale of submarines to Portugal and Greece, have entered into a plea bargain. They now have admitted paying bribes to Greece and Portugal.

Former directors of Ferrostaal, Johann Friedrich Haun and Hans-Peter Muehlenbeck will pay fines of €36,000 and €18,000 respectively, and will be sentenced to a suspended sentence not exceeding two years, as proposed by trial judge, Joachim Eckert, at the opening of the trial this morning in Bavaria.

As for Ferrostaal, the company is accused of the crime of 'obtaining an economic advantage' through its two employees, it must pay a fine of €140 million by 2014, in three installments.

Haun and Muehlenbeck admitted, during the first hearing of the trial today, that bribes were paid to Greece and to Portugal to get both countries to decide on the purchase of submarines from the German Submarine Consortium (GSC), which included Ferrostaal.

Among the beneficiaries of the €62 million paid in bribes was the former Greek Defence Minister Akis Tsochatzpoulos.

As regards Portugal, the indictment goes only so far, referring only to bribing the former Head of Mission, Honorary Consul of Portugal in Munich, Jürgen Adolff, paying him €1.6 million via a false consulting contract in order for the diplomat to arrange the 'right contacts' presumably within the Portuguese government and military.

According to the German magazine Der Spiegel, a Portuguese law firm is believed to have played a role in ensuring that that the contract was awarded to Ferrostaal, and that plenty of bribe money was paid in return.

Prosecutors have already identified more than a dozen suspicious brokerage and consulting agreements related to the submarine deal. According to the investigation files, all of these agreements were designed "to obfuscate the money trails," so as to pass on payments "to decision-makers in the Portuguese government, ministries or navy."

The trial continues. Who in Portugal was on the take? How was the €62 million divided up? Will the German court force a revelation? Who will not be sleeping well tonight?*1 This is a vast sum of money and with a plea bargain already in place there are good chances that the lid will finally come off the sewer that this submarine contract represents.

With acknowledgements to Algarve Daily News.

*1       Who will not be sleeping well tonight and for the next couple of years?

Who indeed?

- a whole bunch of corrupt officials in Portugal
- a whole bunch of agents in Portugal
- a whole bunch of corrupt officials in Greece
- a whole bunch of agents in Greece
- a whole bunch of corrupt officials in South Africa
- a whole bunch of agents in South Africa
- a whole bunch of Ferrostaal directors and managers in Germany
- a whole bunch of Ferrostaal investors in Germany
- more besides

Why the Ferrostaal people?

Because Ferrostaal may just have to pay another EUR50 million to EUR100 million in fines for corruption.

Any may just once and for all get disbarred from doing business for the next 20 years, especially in the USA.

And who's who ?

Haun, Johann Frederick (Hannfried)

Board member responsible for :

Mühlenbeck, Hans-Dieter

company attorney (until 8 July 2003) responsible for :

[it is not Johann Friedrich-Haun or Hans-Peter Muehlenbeck]

And who is Kelco?

Anthony (Tony) Ellingford, friend of Llew Swan who got his stash trading as MOIST CC.

Tong Georgadis (trading as Mallar Inc.), Tony Ellingford (trading as Kelco), Llew Swan (trading as MOIST CC) and RAdm(JG) (Retd) (trading as JRM Consulting) each received 2,5% of the submarine contract price of R5,531 billion (1999 Rands) as commissions. That's a cool R531 million split four ways.

Even if this were regular, which it is not because Armscor limited total commissions to around 2,5% of contract price, there is simply no way that these four feeders/fillers could account for this amount of wonga.

So where did the rest go?

The sub-feeders?

And it was worth it for Ferrostaal and the German Submarine Consortium too, because just two weeks before the final selection on 17 November 1998, they were coming four out of four in the submarine selection process.

It took a giant splodge and a huge bullshit involving national industrial participation, never to be consummated, to get to Number 1 from Number 4.

Part of this same bullshitting exercise also boot-strapped fellow criminals Thyssen and the German Frigate Consortium to Number 1 from Number 2 (after previously being Number 5) in the corvette selection process, with a lot help from in-country criminals Tony Yengeni and Chippy Shaik.