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Austria Sues Airbus Over Eurofighter Deal

Feb. 16, 2017
A government probe concluded that the Airbus and Eurofighter consortium had “deliberately misled the Austrian Republic on the real price, delivery capabilities and its equipment” of the deal signed in 2003.

Austria says it has sued European aerospace giant Airbus over a $2 billion sale of Eurofighter jets that has long been plagued by allegations of kickbacks.

A government probe concluded that the Airbus and Eurofighter consortium had “deliberately misled the Austrian Republic on the real price, delivery capabilities and its equipment” of the deal signed in 2003.

“Austria would have never decided to buy the Eurofighter jets in 2003 without the fraudulent deception by Airbus and Eurofighter,” Defence Minister Hans Peter Doskozil said.

EU member Austria is seeking damages of up to 1.1 billion euros ($1.17 million) for its largest-ever defense deal, worth around 2 billion euros ($2.13 billion).

According to the “Task Force Eurofighter” report presented in Vienna, Airbus knew that it would not be able to meet the delivery deadline of the 15 planes. The five-year-investigation also found that Austria had been overcharged for costs that allegedly included backhanders.

“The two companies never informed Austria that the 2 billion euro deal would include 183.4 million euros ($195.68 million) of legal but also criminal fees,” Doskozil told reporters.

Ahead of the report’s release, Airbus said in a statement sent to AFP that it was not aware of the Austrian findings and had received “no details” regarding the lawsuit. However, the company said that it has been “cooperating with the authorities in recent years, for example through its own enquiries.”

In late January, Airbus had already agreed to pay tens of millions of euros in additional taxes over an allegedly shady 90 million euro ($96.03 million) payment linked to the Austrian Eurofighter contract.

Austrian and German authorities launched the current corruption probe into Airbus, then called EADS, to investigate whether officials had been paid millions of euros through advisory firms to secure the contract. Prosecutors in Munich are set to publish their preliminary findings later this year.

The Eurofighter deal was first announced in 2000 by Austria’s then conservative-run government despite fierce opposition from its far-right coalition partner and the Social Democrats. The government had initially ordered 24 jets, but later dropped the number to 18 and then to 15 because of budgetary constraints.

The purchase of the military fighter jets also stirred public unease in non-NATO neutral Austria. Shortly after the contract was signed, allegations started to circulate that politicians and others involved in the deal were receiving kickbacks.

A graft probe was set up in 2007 and led to the suspension of the then air force chief Erich Wolf following revelations that his wife’s company had been paid 87,600 euros ($93,464) by a lobbyist while the Eurofighter contract was being negotiated. However, the proceedings were halted in 2011 after prosecutors failed to come up with a firm conclusion.

The Eurofighter Typhoon is a major prestige product for the European defense industry. The first prototypes were made in 1989. Since then, around 560 Eurofighter jets have been sold worldwide.

The four founding nations in the consortium — Germany, Spain, Britain and Italy — all use the aircraft in their own air forces. Austria saw the first sale outside of the four consortium members, and since July 2007 the 15 Austrian jets have clocked up more than 5,000 flying hours, according to the consortium.

In 2006, Saudi Arabia agreed to purchase 72 Eurofighter Typhoons. Other contracts have been signed with Oman and Kuwait.

As well as Airbus Defence and Space, representing Germany and Spain, the consortium includes British group BAE Systems and Italian firm Leonardo. Eurofighters were used in combat missions in Libya in 2011. 

By Nina Lamparski and Philippe Schwab

Copyright Agence France-Presse, 2017

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