Corruption at Rheinmetall and Atlas Elektronik?

The public prosecution office of Bremen is currently investigating the arms companies Rheinmetall Defence Electronics and Atlas Elektronik, a subsidiary of EADS and ThyssenKrupp, for allegations of corruption. Last week, several company offices in Bremen and Wedel were searched. The companies are accussed of having paid 9 million euros in bribes for submarine defense deals with the Greek government. Rheinmetall rejected all accusations. After Thyssen Krupp and EADS bought Atlas Elektronik from BAE-Systems in 2006, they already found suspicious activities regarding payments to a British letterbox company that could be linked by a Greek company. Atlas informed the prosecution office of these activities in 2010, but it was not until a 2012 tax audit at Rheinmetall that the office decided to open an investigation. The allegations bear resemblance to another case regarding a german company and submarine deals: MAN subsidiary and trading company Ferrostaal was sued for bribery in 2011. Interessestingly, the submarines the Greek government bought in relation to this bribery scandal were mainly build by Thyssen-Krupp.

Click here for informations on the current corrution case and here for more information on the Ferrostaal judgement.

Click on the company name, to learn about its major investors: Rheinmetall, Thyssen Krupp, EADS.

Update am 15/01/2015:

Rheinmetall admits to have paid slush money

Investigations have shown that former marine officer Papagiotis Efstathiou acted as an intermediary in the Asrad arms deal and bribed military and ministry officials on behalf of Rheinmetall Defence Electronics (RDE).1 RDE is a subsidiary of Rheinmetall AG und is specialized in armed forces technology. Apart from Asrad arms, Leopard-2 panzer were also involved in the deal. As research, carried out by Süddeutsche Zeitung, NDR and WDR, shows, the slush money had been transferred to decision makers according to a well-considered system with an unambiguous allocation key.2 Papagiotis Efstathiou has now been prosecuted for bribery.3 Rheinmetall has to pay a fine of €43 million due to slush money payments in the arms deals.1 The sum is acceptable though since Rheinmetall recently signed a deal with Greece which amounts to a value of €50 million. The country ordered tank ammunition and the German government has taken on the task of processing the order and examining the tank munition.3 The German defense supplier is not the only company currently under investigation.1 CEO Papperger and his fellow board members accepted the fine of €300000 charged by the Bremen prosecution authority. It does not include the charges for profits generated illegally from the sale of the Asrad air defense system though, which amounts to €36,77 million. The latter neutralizes the profits. The value of the deal, for which Rheinmetall has been prosecuted, had a value of €150 million. Rheinmetall stated the bribe in the category operational expenditure and therefore has to pay another €6,4 million to the German treasury. Due to cooperation efforts during the investigation, it does not have to pay for the illegal businesses of RDE.4

 


  1. Süddeutsche Zeitung (2014): http://www.sueddeutsche.de/wirtschaft/korruption-rheinmetall-gibt-bestechung-bei-ruestungsdeal-zu-1.2261583 (accessed 10/12/2014) [] [] []
  2. Süddeutsche Zeitung (2015): http://www.sueddeutsche.de/wirtschaft/ruestungs-deals-mit-griechenland-prozente-von-rheinmetall-1.2300181 (abgerufen 13/01/2015) []
  3. Deutschlandradio (2015):http://www.deutschlandradiokultur.de/deutsch-griechische-korruption-waffengeschaefte-trotz.976.de.html?dram:article_id=307951 (accessed 07/01/2015) [] []
  4. Süddeutsche Zeitung (2014):http://www.sueddeutsche.de/wirtschaft/korruption-rheinmetall-gibt-bestechung-bei-ruestungsdeal-zu-1.2261583 (accessed 10/12/2014) []