Austria Seeks Compensation From Airbus on Eurofighter Deal -- Update
February 16 2017 - 5:53AM
Dow Jones News
By Robert Wall
LONDON--Austria's defense ministry Thursday said it had filed a
criminal complaint against Airbus SE (AIR.FR) and could seek over
$1 billion in restitution over a controversial deal more than a
decade ago to buy Eurofighter Typhoon combat jets.
Austria's Minister of National Defense and Sports, Hans Peter
Doskozil, said a report commissioned by the government showed
"fraudulent and deceitful actions" led the country to buy the
twin-engine Eurofighter combat plane in 2003.
The government said the misdeeds documented by a task force
established in 2012 go back as far as 2002. Airbus--then still
called European Aeronautic Defence & Space Co.--was vying to
sell the military plane to Austria.
Airbus won the contract the following year to supply it with 18
fighter jets. The Eurofighter combat plane making consortium also
includes BAE Systems PLC (BA.LN) and Leonardo SpA (LDO.MI).
Suspicions of corruption in the Austrian deal have been raised
repeatedly since 2002, but remained unsubstantiated until 2006,
when a parliamentary committee in Vienna identified chains of
suspect payments apparently related to the Eurofighter sale, but
little evidence of the intention behind the payments.
The parliamentary probe succeeded, however, in raising political
questions that ultimately prompted the Eurofighter consortium and
the Austrian government to renegotiate the sale, including cutting
the size of the purchase to 15 planes. The contract value in 2007
was reduced to about 1.6 billion euros ($1.7 billion) from around
EUR2 billion.
Austria's Attorney General Wolfgang Peschorn said, "we assume
that the Republic of Austria would not have signed the first
purchase agreement in 2003 nor the settlement in 2007 with the
terms agreed if such facts had been known."
The Austrian government said the damage to the country from the
purchase price and high costs to operate the Eurofighter could be
up to EUR1.1 billion and at least EUR183.4 million. It said there
were other costs, not yet quantified, from operating the more
expensive plane. The government said it expected to spend EUR80
million this year to operate Eurofighter planes.
Airbus Thursday said it couldn't comment on the reports of legal
action, saying it wasn't certain what they were based on. However,
it added, "in recent years we have supported the activities by the
legal authorities, for instance through own investigations."
The company in 2012 launched an internal corruption compliance
review amid concerns over the Austrian deal and a British
corruption probe into the action of an Airbus unit, GPT Special
Project Management Ltd., in Saudi Arabia.
-Write to Robert Wall at robert.wall@wsj.com
(END) Dow Jones Newswires
February 16, 2017 05:38 ET (10:38 GMT)
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