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Gripen bribery inquiry expands

UK is investigating allegations arms trader bought off ČR officials

By Brandon Swanson
Staff Writer, The Prague Post
February 21st, 2007 issue

Czech officials confirmed Feb. 19 that a three-year British investigation into allegations of bribery and corruption by British defense contractor BAE Systems has been widened to include dealings in the Czech Republic.

The country has provided banking information to British authorities, public prosecutor Zdeňka Horská told the daily Mladá fronta Dnes Feb. 19.
“This [bank information] is definitely not related to any politicians,” Horská said, adding that Czech authorities could not comment further.
The UK Serious Fraud Office (SFO) released details of its investigation into BAE Feb. 7. The SFO suspects Europe’s largest weapons dealer of using a subsidiary in the British Virgin Islands to channel nearly £1 billion ($1.9 billion/41.6 billion Kč) to several countries, including the Czech Republic.
SFO agents think some of that money could have been used to bribe Czech public officials into buying JAS 39 Gripen jet fighters.
The allegations centered on a 2001 deal to purchase 24 Gripens for 60 billion Kč. That pact, which was canceled after major flooding that hit the Czech Republic in 2002, would have been the largest military order in Czech history.
The air force later leased 14 Gripen fighters from Gripen International — a consortium of BAE and Swedish aerospace engineer Saab — for 19.6 billion Kč.
The SFO is also investigating similar claims against BAE in Romania, South Africa, Tanzania, Qatar and Chile.
In 2002, Michael Žantovský — former Senate Chairman of the Committee on Foreign Affairs, Defense and Security — claimed that he had been offered a £1 million bribe to vote in favor of purchasing the fighter jets, but Czech police could not find proof of wrongdoing.
BAE Czech Republic Director Steve Mead — who also headed BAE in the Czech Republic during the time of the alleged misconduct — declined to comment on the investigation, but he did release an official statement.
“Repeated reports about the allegations against us represent an attack on the reputation of our company and its employees,” the statement read. “We have strict rules and methods that our employees and advisers are aware of. And the adherence to the rules is checked very strictly.”
This isn’t the first time BAE has been scrutinized for its dealings.
In December, the SFO office ended an investigation into allegations that BAE used a slush fund to pay for prostitutes and hotel rooms for Saudi officials. British Prime Minister Tony Blair and Attorney General Peter Goldsmith drew criticism for halting that investigation, claiming national and international security reasons.
Naďa Černá contributed to this report.

Brandon Swanson can be reached at bswanson@praguepost.com


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