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Complicit in Corruption: How German Companies Bribed Their Way to Greek Deals


Part 2: Millions Paid to 'Consultants'

Photo Gallery: Greasing the Wheels of Business Photos

A prime example of such transactions is the sale of 170 tanks that Krauss-Maffei Wegmann (KMW) recently delivered to Greece. In exchange, the company was to receive €1.7 billion.

Such deals normally involve paying millions for consulting services. Exactly what kind of consulting is provided and why the companies are often located in tax havens remains largely a mystery. The secret firms generally belong to Greek "intermediaries" -- industrialists working on commission. In many cases, so investigators suspect, these intermediaries then distribute the money to decision-makers.

In the case of KMW, right about the time when companies were invited to bid on the contract, a Greek tycoon established a shell corporation on the Caribbean island of Nevis in the fall of 1999. The firm then concluded two contracts: a negotiating agreement with KMW and one with a firm called Evanston Group Ltd. on the British Virgin Islands, which was supposed to receive $60 million in exchange for the "acquisition of offset options."

Top Secret

How, exactly, is a shell corporation in the Caribbean supposed to provide services in Athens? When these agreements -- which were classified as top secret due to their "political nature" -- became public, officials in Munich launched an investigation. But they have made no headway because the Virgin Islands refuse to cooperate.

In Greece the Athens chief public prosecutor and an investigative committee looked into the role that politicians played in the deal. But these investigations have also come to nothing. That's hardly surprising in a country where not a single one of the 450 most important corruption cases in recent years has been concluded before a court of law.

Both KMW and Ferrostaal explicitly deny ever having paid bribes for the respective deals.

Payment Overdue

By now the defense contractor has delivered all 170 Leopard tanks to Greece -- but Greece still owes the company €180 million on the order.

The German submarine consortium reports that payments have only trickled in since 2005. Here the Greek state currently still owes €321 million. And Siemens is still waiting on an additional €20 million from the security technology deal for the Olympic Games.

This has prompted a number of defense companies to turn to the German government. Their demand: If Germany is helping Greece, then the Greeks should at least pay their debts.

Translated from the German by Paul Cohen

Discuss this issue with other readers!
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1. Astonishing similarity to another recent Der Spiegel’s article
Norberto_Tyr 05/12/2010
The real question is philosophical; can pragmatist materialistic people live together with idealistic one without destroying the social fabric? The answer, without doubt, is no. How can someone be fairly tried by judges that not believe in truth? And be sure about this, pragmatists will flood the legal system clogging and filling the courts to the brim. Therefore, I would say that modern Greek’s problems are related to the migratory policies of the Turks and British protectorate. Norberto
2. Portugal's officals also have been bribed
algarvedaily 12/02/2014
This is the same scenario in Portugal where the Germans refuse even to pay the agreed sums in offset deals. See http://www.algarvedailynews.com/news/3588-submarine-bribery-report-no-proof-of-unlawful-acts and http://www.algarvedailynews.com/news/1414-submarine-case-over-nobody-guilty and the current favourite http://www.algarvedailynews.com/news/4064-submarines-germans-add-insult-to-injury
3. Moral Hazard
sarchis_dolmanian 07/20/2015
Moral Hazard has always been a double edged sword. So are miza and fakelaki. They end up destroying the very foundation of any society, mutual trust that has to exist between its members. https://nicichiarasa.wordpress.com/2015/07/08/moral-hazard/
vera_fernandes 09/25/2015
The title should be: Complicit corruption: How German Companies Bribed Their way to Southern European deals.
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Graphic: German exports to Greece (2009) Zoom

Graphic: German exports to Greece (2009)

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