Austria checks Eurofighter deals amid bribery probe

VIENNA Thu Nov 29, 2012 9:27am EST

VIENNA Nov 29 (Reuters) - Austria ordered a fresh review of business deals linked to its $2 billion order of Eurofighter jets in 2003, aiming to settle allegations they might have been used to help cloak bribes paid to win the contract.

German prosecutors have alleged aerospace group EADS paid at least 50 million euros ($63.5 million) in bribes to Austrian officials to secure the sale of 15 Eurofighters.

Authorities in Germany, Austria and Switzerland raided EADS sites this month as part of investigations into suspected bribery, money laundering and fraud related to the deal.

The sale hinged on EADS guaranteeing offset deals meant to generate twice the value of the transaction for the Austrian economy, through suppliers, services or education projects.

It is alleged that many companies represented their normal business as offset deals to the Austrian economy ministry which had to approve them to help EADS meet its target.

Allegations surfaced almost immediately the deal was announced that many of the supposed offset deals did not bring in any business for Austria, but that money ended up in the pockets of politicians, civil servants and other individuals via brokers for the side deals.

Economy Minister Reinhold Mitterlehner said on Thursday a task force would take another look at the offset deals.

"Our goal is complete transparency to be able to undertake a serious overall evaluation of the offset deals," Mitterlehner said in a statement, pledging full cooperation with prosecutors.

He said Austria would certify that terms of the offset agreement had been fulfilled only after the allegations had been examined and dealt with.

"I assume that we have checked it correctly so far and I also assume that the firms submitted their applications correctly and stand by what they submitted," Mitterlehner told reporters.

EADS had competed with Sweden's Saab AB and U.S.-based Lockheed Martin Corp to win the contract.

Austria's defence minister has said Austria might try to cancel the deal, or seek damages and a refund, if it found bribes were paid, as it is entitled to do under a clause in the contract.

The 2003 contract called for the offset deals to be completed by 2018. The value of the deals was negotiated down from an original 4 billion euros to around 3.5 billion as the contract was cut to 15 jets from 18.

Of that total, 3.3 billion had been had been recognised by the end of 2010.

The government had rejected deals worth another 740 million, Mitterlehner said.

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