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Austrian count cleared of arms deal money laundering

VIENNA (Reuters) - An Austrian count was acquitted on Thursday of charges he covertly helped Britain’s biggest arms group distribute millions of euros to win weapons deals in central and eastern Europe.

Austrian Count Alfons Eduard Alexander Antonius Maria Andreas Hubertus Christoph Graf von Mensdorff-Pouilly arrives at court for the proceedings of his trial in Vienna January 17, 2013. REUTERS/Heinz-Peter Bader

Alfons Mensdorff-Pouilly, who had insisted during his trial that he served only as a well-connected adviser who had nothing to do with bribes, instead got a two-month suspended sentence on a lesser charge of falsifying evidence.

“This is not a clean bill of health. The whole thing stinks,” Judge Stefan Apostol told the count.

But prosecutors had been unable to prove charges of money laundering and perjury that carried penalties of up to five years in jail, he said.

BAE Systems, Europe’s biggest defence company, was fined $450 million by the United States and Britain in 2010, following corruption investigations at home and abroad into arms deals in Saudi Arabia, Tanzania, Sweden, the Czech Republic and Hungary.

It was not a defendant in the Vienna trial and said it was not asked by Austrian authorities to take part in any inquiry.

The case occurred as Austrian courts and prosecutors are taking an increasingly tough line on corruption that has fuelled perceptions of a cosy interplay of business and political power in Austria.

Former Interior Minister and European lawmaker Ernst Strasser got a four-year prison term for bribery this week after being caught on camera offering to amend European legislation in exchange for cash. He will lodge an appeal.

Mensdorff-Pouilly, 59, had painted himself as a man whose acumen and family ties propelled him from struggling poultry farmer to prosperity.

Prosecutor Michael Radasztics had accused him of using 12.6 million euros ($16.8 million) he got from BAE Systems via shell companies to influence weapons deals in eastern Europe a decade ago after the fall of the Iron Curtain.


Radasztics had told the court he did not bring bribery charges because he could not prove who may have been paid off.

Defence attorney Harald Schuster seized on that to paint the accusations as a desperate attempt to salvage a 10-year investigation that had identified not a single bribe recipient.

Radasztics said he would lodge an appeal while Mensdorff-Pouilly said he would not fight the verdict.

Mensdorff-Pouilly is a flamboyant figure who had hosted lavish hunts at his castles in Scotland and Austria, hobnobbed with the glamour set and wed a government minister.

He had testified of his beginnings trading game, poultry and snails from his inherited estate in southeastern Austria, now a successful hunting lodge.

It was not until his cousin married Tim Landon - a BAE executive and former British secret agent known as the White Sultan who once organised a coup in Oman - that the down-at-heel aristocrat began to see fortune smile on him.

Landon, who died five years ago, introduced him to BAE, which hired the count to advise on why it had lost out on a fighter jet deal in Austria. It eventually broadened his remit to include a potentially vast new market in the former communist countries of eastern Europe that opened after 1990.

“If you have a bit of a feel for politics and many relatives and friends in these countries, then you have the right connections,” Mensdorff-Pouilly had told the court. “I got information that was not so easy to get.” ($1 = 0.7521 euros)

Reporting by Michael Shields; Editing by Angus MacSwan