Mittwoch, 19. Oktober 2011

How German Companies Bribed Their Way to Greek Deals

Complicit in Corruption

How German Companies Bribed Their Way to Greek Deals

Photo Gallery: Greasing the Wheels of Business
Greece's rampant corruption is one of the reasons why the country's economy is in such a mess. German companies have taken advantage of the system for years in order to secure lucrative deals
Miza and fakelaki are the lubrication that keeps the Greek economy running smoothly. Fakelaki -- literally "small envelope" -- is a payment used when Greeks need to be treated by a doctor or are having trouble with a tax auditor.
Miza, on the other hand, is the money that doesn't fit into a small envelope and requires something bigger, like a suitcase, or when the cash needs to be squirreled away in an account in one of the world's many tax havens. Without miza -- i.e., bribes -- virtually no foreign company could do business in Greece. Large government contracts are particularly prone to miza.
These deals often allow millions to flow via shell corporations around the world and back into the pockets of industrialists, civil servants, the military and politicians. Meanwhile, the payments are usually declared on the company's books as commissions for negotiating contracts. And German industry is one of the major players in the game of miza Monopoly.
Highly Lucrative Deals
Germany is one of Greece's leading trading partners. Last year, Germany exported goods worth €6.7 billion ($8.5 billion) to Greece -- compared to a volume of imports of only €1.9 billion. But what methods are used to achieve this enormous surplus?
According to the US Securities and Exchange Commission, for example, German carmaker Daimler has paid miza in past years to pave the way for vehicle deliveries to Greece. And even Germany's national railway operator Deutsche Bahn apparently resorted to bribes to win an underground railway contract in the run-up to the 2004 Olympic Games in Athens. To clinch the deal, a six-digit sum was reportedly given to a Greek decision-maker via an adviser. Transparency International rates Greece as the one of the most corrupt countries in Europe.
Such business deals are highly lucrative -- even with miza. "Anyone who pays bribes to get a government contract can pad his margin with a few extra million," says one investigator. "The excessive prices are of course shouldered by taxpayers."
This man must know what he is talking about -- he's been investigating for years the Siemens corruption scandal, in which a double-digit million euro amount was allegedly siphoned off for kickbacks in Greece. The Siemens branch in Athens reportedly relied on such sums to fuel the company's business deals in Greece until the year 2006. This included contracts with the former state-owned telecommunications company OTE, surveillance and security technology in connection with the 2004 Olympic Games, and underground railways.
Massive Slush Fund
Investigators into the Siemens scandal have found that the company's Greek branch needed an annual slush fund of some €15 million. To secure the €500 million OTE contract alone, the firm allegedly paid €35 million in miza in the late 1990s. At Siemens headquarters in Munich, they spoke with great admiration of their branch in Athens for years -- hardly any other national subsidiary had delivered such impressive results.
Even politicians in Athens have allegedly benefited from the deal. According to statements made by company executives involved in the payoffs, up to 2 percent of the revenues from the Siemens Hellas telecommunications division were paid to the two main political parties, the Panhellenic Socialist Movement, better known as PASOK, and the conservative New Democracy. In Athens one never knows which government will remain in office -- or for how long. Both parties have denied accepting any payments.
The German defense industry has also apparently been just as active as Siemens in Greece. Athens spends between €3 billion and €4 billion on arms imports each year, according to estimates -- an absurd amount for such a small country. German arms manufacturers have reaped the greatest benefits from these sales. Between 2004 and 2008 alone, they delivered roughly a third of Greece's defense imports.
Munich's state prosecutor is currently investigating whether everything was done by the book during the sale of four submarines. The order amounted to nearly €3 billion, and €2 billion had to be paid in advance -- which is unusual for such deals.
Dubious Payments
Investigators became suspicious when they discovered a questionable payment to a supposed consultant for the deal. A few years ago, a Greek man reportedly contacted the Essen-based conglomerate Ferrostaal and demanded a double-digit million euro amount in connection with the submarine transaction. At the time, Ferrostaal had formed a consortium with ThyssenKrupp subsidiary HDW. When company executives in Essen refused to pay, the man threatened them with a lawsuit.


10/17/2011 12:43 PM

Germans Question Contract

France to Sell Frigates to Greece in Controversial Deal

Berlin is unhappy about a weapons deal in which France plans to supply warships to highly indebted Greece free of charge for the first five years, and at a big discount when payment comes due. Firms and politicians in Germany say taxpayers may end up paying for part of the deal, and they want Chancellor Angela Merkel to intervene.
A huge arms deal is threatening to put French-German relations under strain. According to information obtained by SPIEGEL, France wants to deliver two to four new frigates to the Greek navy and to allow the highly indebted nation to postpone payment of the €300 million ($412 million) purchase price per ship for the next five years.
Under the deal, Greece will have the option of paying up after five years, with a significant discount of €100 million, or returning them to the French navy. The "stealth" frigates are designed to avoid detection by enemy radar and are built by state-owned French defense company DCNS.
The deal is being criticized by German rivals that have been competing for the contract for years.
In a letter to the German government, an executive from the ThyssenKrupp group complained that the vessel purchase will in effect be co-financed by German taxpayers because Greece, reliant on aid from the European Union and International Monetary Fund, may have to restructure its debts.
'The Chancellor Must Stop Her Friend Sarkozy'

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