The Gripen affair redux

I don’t think we will ever find out who bribed whom in 2001 when the Orbán government suddenly decided to purchase the Swedish-British Gripen fighter jets instead of the American F-16s.

In the last ten years there was off and on coverage of this strange case. I myself dealt with it at least three times. My first piece on the subject was written on August 13, 2007. Shortly afterward, on November 26 of the same year, I had to return to the topic because of a parliamentary committee that was investigating the questionable purchase of the Swedish planes. And finally on March 4, 2009 I wrote at some length about the arrest of Count Alfons Mensdorff-Pouilly, the “lobbyist” for BAE Systems, partner of the Swedish firm Saab, in the sale of Gripen fighter planes. According to Swedish and Austrian newspapers, the Count, who speaks Hungarian fluently since his mother is Hungarian, worked as a lobbyist for BAE Systems and spent millions on kickbacks to Czechs and Hungarians who “convinced” their governments that the best buy would be the Saab-built Gripen planes.

SAAB JAS 39 Gripen

In my first piece on the Gripen affair I mentioned that Ágnes Vadai, then undersecretary of the ministry of defense, was named to head an investigation of the matter. They investigated and investigated but found nothing specific that would point the finger.

Two years later Ágnes Vadai told the public a little more. The first problem the committee faced was the lack of documentation. Every important piece of paper concerning the purchase of these fighter planes was gone. The letter in which the minister of defense asked for bids was gone, the bids themselves couldn’t be found, and naturally there was no mention of Mensdorff-Pouilly in any government document. The only thing she could come up with as indirect evidence was the suddenness of the decision and the fact that the prime minister went against the advice of the military experts and alone decided in favor of the Gripen planes.

Meanwhile the Hungarian prosecutors were seemingly uninterested in the British, Swedish, Czech, and Austrian court proceedings concerning this bribery case although, according to the latest information, the Hungarian prosecutor’s office did get in touch with its counterparts in those countries where Mensdorff-Pouilly’s illegal activities were discovered. Allegedly they were assured that there was no Hungarian connection to the Mensdorff-Pouilly case.

I must say that I am skeptical of the veracity of this new information that was shared during György Bolgár’s telephone interview with Pál Sinku, a counselor from the chief prosecutor’s office. Although Sinku was very different from the usual spokespersons of the prosecutor’s office–he was friendly and tried to be helpful, I still doubt that the Hungarian inquiries were specific enough.  Why would Péter Polt’s prosecutors be eager to shed light on a bribery case that might involve Viktor Orbán and Fidesz? After all, the purchase of the Gripen planes took place during the fall of 2001.

Profil, a well respected Austrian weekly, has been after Mensdorff-Pouilly for a long time. Unfortunately, the latest article entitled “Count Ali and the weapon billions” is not available online. However, a Hungarian translation of the article was published this morning on Galamus. Although it is rather difficult to decipher the exact meaning of the references, a few telling details might advance our understanding of the Hungarian bribery case a bit. The minutes of the meetings of the “lobbyists” talked about “payments to the socialists” and about “the swine” who must receive 5% of something that I find difficult to interpret: “ipari elem.” Industrial element? As a result of this extra 5% to “swine” the deal was going to be more expensive. That is, the bribe would cost more. The original price was $8 million but because of this extra 5% they will need another $4.7 million, so the phony off-shore company the lobbyists set up for money laundering purposes must receive extra cash. In addition, Mensdorff-Pouilly had to pay off five other people who allegedly received 1% of the purchase price. That amounted to 180 million Austrian schillings or 13 million euros.

And now let’s go back to Ágnes Vadai, who today is a member of DK and thus an independent member of parliament. Not surprisingly, she was interviewed by Olga Kálmán last night. She couldn’t say much about her investigation because it was declared to be a state secret at the time, but when she was asked whether she has any suspicions about who the five people were who received this incredible amount of money Vadai answered in the affirmative.

Let me add something here. My suspicion is that among these five there were not only Fidesz people but socialists as well. First of all, there are the minutes that specifically talk about “payments to the socialists.” Second, looking through the Hungarian newspapers of the time it seemed to me that the socialists didn’t complain as loudly about this very suspicious Swedish deal as they should have. Ferenc Juhász, who later became minister of defense (2002-2006), was outright enthusiastic. At least Hungary wasn’t buying the “obsolete” American F-16s.

Mind you, today Ágnes Vadai claims that Hungary didn’t need any new fighter jets, period. The MiG-29s needed only the once-every-nine-year general service, but the Ministry of Defense in the hope of purchasing new jets simply neglected their upkeep. Moreover, Viktor Orbán at that point hated everything Russian. Thus they spent an inordinate amount of money on fourteen used Swedish planes.

At the time government members declared repeatedly that the planes were practically free because of promised Swedish investments in Hungary. I must say that I am not aware of any really large Swedish investments after 2001. Moreover,  just about a year ago Hungary had to renegotiate the deal because the Hungarian government was unable to meet the payments. The price is getting steeper and steeper.

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56 comments

  1. Kirsten :
    some1, I also doubt that you will get useful information from such a site. This is money that they are willing to own up to. It will not have much relation with the money actually received and by whom. From Czech experience it can be inferred that as long as all people in the know do not say anything, the best you can learn are rumours and such rumours can start a life of their own. Even if there are individuals who would be willing to share their knowledge, this is useful only if that person has the backing of dedicated and powerful policemen, prosecutors and judges. Otherwise that person would be either ridiculed or punished. To ask these people to “play fair” is only frustrating, they will never, it needs a credible threat that the public could put a stop to their game. And for that you need people who will use all their possibilities to indeed act in the public interest.

    ” THe devil is in the detail” THeir accounting and pushing the money left and right, filtering it through various organizations is part of the detail. THe details of one happy family. If you are looking for Eur 1,000,000 deposited on Fidesz or any Fidesz friends account, you will not find it.

  2. @Kristen
    I agree, this isn’t admittable in court. However, I only reflected on your remark as “people in the know do not say anything”. Another question is, that in any self respecting country these allegations should have been truly investigated, don’t you think?

    Contrary to common beliefs there indeed surfaced “findings” pointing to fraud:
    “The Swedish prosecutor’s findings state that JAS Gripen was sold by bribes in an export deal with the Czech Republic, Hungary and South Africa.”
    – or:
    “The British Prosecutors conclusion is clear: the JAS Gripen affair was corrupt.”

    However, powerful interests managed to stop further proceedings. You may read here – even between the lines:

    http://www.svt.se/2.58360/1.1597692/utskriftsvanligt_format?printerfriendly=true

  3. Let’s put a quote here from the article spectator linked to, as I do not want to be lost amongst all the newer post on the newer threads. (ARe you reading Ivan?)
    “The Swedish chief prosecutor Christer van der Kwast has come to the same conclusion, that the JAS Gripen deals, that Saab carried out together with their British partner (BAE Systems), were corrupt.
    “The inquiries showed that BAE, using a sophisticated payment arrangement, has hidden large payments that can be linked to the campaigns in the Czech Republic, Hungary, and South Africa and have made it possible to bribe the decision makers in these countries,” writes the prosecutor in his findings.
    “It is very serious, both in terms of the systematics and the amount. It involves hundreds of millions of Swedish crowns in hidden payments in several countries, and there is strong reason to believe that bribery also has occurred,” says Christer van der Kwast to “Uppdrag Granskning”.
    (bolded by me)

  4. spectator: “in any self respecting country these allegations should have been truly investigated, don’t you think?”

    After what we had to learn about Czech corruption, I would not approach this problem from the idea of a self-respecting “country” anymore. I wrote that in other threads also, the problem exists if a network (or networks) of people is (are) able to control relevant positions in the state and if the public is too weak to prevent this (because of lack of knowledge, interest, dedication, energy, or outright support for this approach because it is “obvious” that who is close to the relevant positions has of necessity to think about his family/friends first etc.). In such countries there IS a relatively large number of “self-respecting” people but the task that needs to be accomplished requires broader support even of those who in more settled countries would not care for politics either.

    Fortunately, some or perhaps even many Czechs currently do not believe in the necessity of defending any corrupt person in front of “foreigners” in the name of sovereignty. (Vaclav Klaus invariably considers this lack of patriotism and criticism of the widespread corruption as violation of Czech sovereignty.) The idea that this “sovereignty” is used to defend the control of the relevant positions in the state by a network is gaining ground, which I consider to be very useful. (The fact that the EU stopped some money recently because of irregularities was accepted as a correct reaction to “our unability to prevent corruption”.) But you still need to remove the networks from these important positions.

    It appears that this requires some steady pressure from the public (we are not defending corrupt politicians only because they are “ours”, it is attempted to send to parliament people who are not (yet) known for their corrupt behaviour). This pressure of the public has led to some changes in the prosecution and the police recently. But whether this is a temporary improvement soon to be followed by a backlash, is not clear, because there is still sufficient interference in the police and the judiciary by the politicians. What I wanted to say is that to become a “self-respecting country”, some very practical steps have to be made, requiring lots of effort, and in particular the country should not be seen as a homogenous group. That is why I am opposed to the “country” that is self-respecting. No, those people who wish to live in such a self-respecting way first have to struggle for this (and should not dwell on the “injustice” being born in a country where this has to be hard-won), have to accept that some of “us” are real gangsters, but we can use our “sovereignty” to put them in jail (although they are “ours”, and this should be closer to us then “Brussels” or other criticising foreigners). In Hungary unfortunately, recently, too many people have bought into the idea that one has to defend “our people” when being criticised even if they are real gangsters, or have started to consider all people gangsters so that an improvement need not be even sought for.

  5. @Kristen
    “What I wanted to say is that to become a “self-respecting country”, some very practical steps have to be made, requiring lots of effort…”

    Exactly!
    And those lots of efforts yet to be made here and there, in order to become that “self respecting country” what I was referring to.

    Otherwise I’ve meant a “country” as a legal entity, where homogeneity isn’t question.
    The legal system of any normal, “self respecting” country should have started in earnest on day one these information/rumors started to surface. It didn’t happened in Hungary, they haven’t even started up to date.

  6. spectator, perhaps I am repeating myself, but I think that I wanted to stress a different point. Czech experience says that the “legal system” is composed of people who are part of the networks etc. and people who would love to work for the “legal system of a self-respecting country” in your interpretation. You need to identify the individuals who are “in the business” (which is also useful so that the broad public does not see “gangsters” everywhere), and those individuals who are able and willing to work for a “self-respecting” legal system. You have to look at this as the work of a number of individuals but not an anonymous mass. That “mass” is heterogenous in the Czech Republic as in Hungary also, contrary to what I read here often, also in Hungary not all policemen, judges and the like are also gangsters.

    The “legal system in normal countries” would of course have long started action against the Fidesz network – but also in the case of the UK, Germany etc., it is individuals who act, ie policemen that investigate, prosecutors and judges who do what is necessary, and if a politician interferes, this is made public. I understand that it is tempting to make this comparison with less corrupt countries, but I am very much interested in the practical steps that improve the situation in the corrupt central European countries.

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