Shooting has ties to Pandur scandal

One of the highest-profile unresolved corruption cases in the history of the country has returned to the spotlight after it was revealed the gunman who killed two and injured a third before taking his own life at a south Moravian factory Nov. 10 is the brother of a key witness to alleged bribery on a major defense contract who was later silenced by a mysterious 2008 hunting accident.

Karel Musela opened fire at the Aircraft Industries (AI) plant, killing Pavel Vlach and Petr Veselý, both members of the company's board, and injuring director Ilona Plškova, before turning the gun on himself.

But nearly as shocking as the incident itself are its plausible connections to the still-unresolved Pandur procurement case that revolves around the Czech military's purchase of 107 Pandur II Armored Personnel Carriers (APCs) for some 14.4 billion Kč from the Austrian-based, American-owned Steyr company. The Czech Republic paid some 134 million Kč per vehicle, while Portugal, which made a similar purchase around the same time, paid 40 million Kč per APC.

A series of investigations has started and stalled over alleged bribery related to the contract. In mid-2010, Czech and Austrian authorities confirmed they were continuing cooperation on the investigation.

Karel Musela's brother Pavel was an influential arms dealer with ties to the Pandur deal who formerly served on the AI board, and a person of interest to police investigators, but suffered an oddly timed hunting accident in October 2008 as inquiries into the then-incomplete Pandur deal heated up.

A colleague who was with Pavel Musela at the time of the accident said Musela had fallen from a deer stand and fractured his skull. But that same colleague, Luboš Novotný, later faced a murder charge after police found blood on the butt of his hunting rifle, leading to speculation he had beaten Musela over the head. Novotný was acquitted after authorities were unable to conclusively match the blood on the gun with Musela's DNA.

By several accounts, Karel Musela may have blamed the now-deceased Vlach and Veselý for ordering his brother's attempted assassination.

"[Pavel Musela] is in a private clinic and requires 24-hour care," one arms industry insider who had worked with Pavel Musela as well as the now-deceased board members at Aircraft Industries said of Musela's condition. "He is not a vegetable, but he has very serious brain damage."

"He has a lot of his long-term memory back, but cannot remember what happened from morning till evening, as I understand it," the insider said.

The seed for Karel Musela's Nov. 10 attack was seemingly already planted by 2009, when he told a group of reporters, "Pavel always used to tell me: 'Pandurs are my brainchild; it is my biggest deal.' What has happened to him is certainly no coincidence."

South Moravian Regional State Attorney Roman Kafka told the Czech News Agency that Karel Musela's attack, and subsequent suicide, were clearly premeditated.

"If you're spinning a conspiracy theory in a pub, it's not that big of a leap for someone slighted to think Vlach had something to do with [Pavel] Musela's accident," the arms industry source said.  

Kafka said Musela had settled his own contractual affairs in advance and that in storming the AI company board meeting, he ordered several other board members to leave the room, leaving only the victims. Four Russian members of the company board were allowed to leave the room.

AI's majority shareholder is the Russian-owned Ural Mining and Metallurgical Company, which controls 51 percent. The Czech-owned PAMCO controls 49 percent. AI officials have declined to comment on the shooting incident.

The tentacles of the Pandur case, and many of its key actors, spread into numerous other corruption-related cases, giving rise to rampant speculation of an ongoing cover-up.

In September, Justice Minister Jiří Pospíšil (Civic Democrats, ODS) fired Prague High State Attorney Vlastimil Rampula. Among the raft of unconfirmed allegations against Rampula was that he leaked Pavel Musela's name as a possible witness in the Pandur investigation - a development that, if proved, would lend credence to the idea Pavel Musela's hunting mishap was hardly an accident.

Musela himself had close ties to disgraced former Prime Minister Stanislav Gross (Social Democrats, ČSSD) who resigned in the wake of a corruption scandal. Musela is alleged to have had a major role in the privatization of the Mostecká uhelná společnost (MUS) mining company, allegedly overseeing the distribution of kickbacks from a Gibraltar-based slush fund for then-Interior Minister Gross.

Earlier this month, the weekly Respekt reported Swiss authorities have asked the Czech government to join in claiming themselves as injured parties to the privatization, and some 12 billion Kč is now frozen in Swiss bank accounts related to the case. Czech authorities have thus far balked at joining the Swiss, as it would be an admission of criminal wrongdoing by the government of then-Prime Minister Miloš Zeman (ČSSD) likely to implicate some still active in politics.

As of press time, officials from various government ministries were passing the buck on whose responsibility it was to follow up on the Swiss request.

But if Pavel Musela was intentionally harmed in the south Bohemian forest in October 2008, it would likely be his knowledge of the inner workings of the Pandur deal that led to his demise.   

In 2003, the ČSSD-led coalition government launched a public tender for the purchase of 240 APCs. Steyr won the tender in 2006, and the military then agreed to buy 199 vehicles for 23.5 billion Kč. In 2007, Mirek Topolánek's ODS-led coalition government withdrew from the contract, saying the Pandurs failed military tests. However, a contract for 107 Pandur II APCs worth 14.4 billion Kč was nonetheless signed with Steyr in March 2009, while Topolánek was still prime minister.

While Deputy Defense Minister Martin Barták, who was tied to numerous questionable procurement contracts before being fired last year, admitted to signing the controversial contract in March 2009, he claimed he did so on the orders of then-Defense Minister Vlasta Parkanová (then Christian Democrats, now TOP 09).

Bribery allegations related to the deal center on reports that Steyr's former chief executive signed a contract with Czech lobbyist Jan Vlček in 2002 that mandated Vlček would facilitate Steyr's contacts with Czech politicians for an alleged commission worth 7 percent of any order price.

According to reports, Austrian police have requested secretly recorded statements by two former Steyr managers, Wolfgang Habitzl and Herwig Jedlaucnik, who, allegedly, in a conversation with an undercover reporter, described the system of commissions accompanying the Pandur deal.

Earlier this year, some 52 people were charged with crimes related to corrupt Defense Ministry tenders, although top officials like Barták and Parkanová escaped charges. While nobody was charged in the Pandur case, investigators insisted the case was still open.  

- Filip Šenk contributed to this report.

Benjamin Cunningham can be reached at
bcunningham@praguepost.com