Common journalistic investigation by Der Spiegel and the Romanian Center for Investigative Journalism.
To secure a contract in Romania, the EADS corporation paid millions of euro to people close to the Secret Services. Was this money used to “appease” some politicians?
In Hamburg, there is a little story about the select street where Henry R. lives, a story which seems to be very well suited for this character. They say that a former senator saw to it that the footpath following the shore of Alster river, where people usually take walks, makes a sudden detour. It does it so that the highly scenic domains don’t lose the charm of their contact with the river. And, also, so that the senator and his neighbors would not be disturbed by the “people” through the living room window. Here a small detour, there a little modification and always in compliance with the public point of view. Things probably happened just like in front of his own door in a situation where Henry R. played an important role. If the suspicions of the Munich prosecutors are correct, the EADS corporation, specialized in aerospace and military equipment, used a company owned by Henry R. to secure a big public contract in Romania, by using bribes.
The name of the corporation appears in an investigation report
This is the reason why the name of the corporation appears in an investigation report from last year, concerning their headquarters in Ottobrunn. According to the report, EADS allegedly transferred money through the company to the Romanian decision-makers, to secure rapid payments, worth millions, to EADS. The investigations are directed against the four managers of the corporation, among which the head of the Defense Department, Stefan Zoller (Spiegel 50/ 2014). The charge: “They at least had knowledge of illegal payments”. Nothing has yet been proven, but if we are to believe the prosecutors, a second Romanian firm proved to be extremely useful in “greasing” the mechanism for obtaining next generation equipment for monitoring the Romanian borders. And, as shown in the common investigation of Der Spiegel and the Romanian Center for Investigative Journalism, the manufacturer Airbus wasn’t at all reluctant to weave a relation with the secret services.
The fact that EADS was investigated by the prosecutors in Tom Enders’s era, the former head of the corporation, was not a first. For years, the prosecutors have been investigating in Germany and Austria the possible “informal payments” for the sale of Eurofighter airplanes to Austria. Are they isolated cases who escaped the compliance department? Or did the corporation now called Airbus consciously turned a blind eye because there is a “bribe system”? In this case, two anonymous tips gave details, ever since 2008 and 2011, concerning bribes. The first tip even reached Wolfgang Schauble, the Minister of the Interior at that time. Since 2013, the prosecutors in Munich have been sifting through Airbus’ Military Technical Department, called Cassidian at that time. One modus operandi, two different locations: in Saudi Arabia, the corporation allegedly paid 13 million euro in 2011 and 2012 to secure a contract worth 1.7 billion euro for the electronic border fence.
EADS and the inconveniences in Romania
In Romania, things were much more complicated than in the sheik-ruled country. Apparently, EADS as faced with the inconveniences of democracy in the alleged bribing process – a shift in high-level leadership, during which the well-kept contacts broke down. When the Romanian Government signed its first contract with EADS, in 2004, the Prime Minister was a social democrat – Adrian Năstase. Chancellor of Germany Gerhard Schroder was present in Bucharest, on the occasion of the signing and promoted EADS’ success as a state event. 3150 km of border was supposed to be secured by the corporation, of which 1870 km once Romania joined the EU in 2007, in order to secure the outer borders of “Fortress Europe”. The manner in which EADS obtained this contract was not made public. Months later, the Romanian press revealed the fact that this contract, signed by Năstase in favor of EADS, did not comply with the legislation in force on public tenders. DNA, who is investigating the case, starts from the assumption that EADS bought the contract through a network of companies, among which the giant Fujitsu – Siemens wouldn’t be a stranger and apparently played an important part.
It appears that EADS paid at least four million euro to the IT corporation, and half of this money found its way to two P.O. boxes in Liechtenstein and Holland. Subsequently, at least as the prosecutors suspect, the money was transferred to the Romanian state apparatus. Both Năstase and Fujitsu refused to make any comments, because the proceedings are still undergoing. However, regardless of how comfortable the contract might have seemed to EADS – the decisive questions was how much was that piece of paper worth after December 2004, when the country was ruled by conservative politicians: Prime Minister Călin Popescu – Tăriceanu and President Traian Băsescu. The latter was cited in one of the telegrams sent by US Embassy in Bucharest, with the statement that, from his point of view, the EADS contract was “corrupt”. And it took the Government only a few months to ask for a renegotiation of the contract, refusing to release the first installment of 650 million euro. By the end of 2005, an agreement was made with EADS on an installment of 525 million euro. The deal had been saved for EADS, although in “harsher” conditions.
During this time, it seems that the two companies took over the maintenance of local political and financial relations for EADS. One of them seems to be controlled by Henry R. from Hamburg. The main purpose was ensuring the constant flow of payments for the installments to EADS. This person, originally from Romania and immigrated to Germany in 1973, bearing a German passport, developed in the 90’s, together with another two partners, the Midocar group of companies. According to the company’s own statements, they are the main VW and Audi importers for the Romanian market. It is, however, very conspicuous that Midocar has contractual relation with the state’s security and intelligence institutions. Apparently, the company sold hundreds of cars to the Ministries of Interior Affairs, Defense and even to the Ministry of Justice – as well as to the Secret Services. One of the owners, Tudor G., apparently had personal relations with the heads of the secret services, dating even since the rule of Dictator Nicolae Ceaușescu. In 2007, he was indicted, together with a SRI general, of gifting the latter with an expensive VW, as reward for public contracts. The proceedings opened against G. were concluded in 2013 with a suspended sentence, not for corruption, but for financial fraud. The general was convicted for accepting bribes.
The third associate of Midocar, Silviu P., was the co-founder of a lobby union representing the automobile importers, whose president was Prime Minister Tăriceanu, who, after the end of his term, became the honorary president. When Midocar Consulting was involved in the renegotiation of the contract, they had no clue as to what border security involved. But it seems that this didn’t matter for EADS. What mattered were the good connections Midocar had at the time. Vasile Blaga, the former Minister of Interior Affairs at the time declared that he was shocked when he found out that his subordinates didn’t’ negotiate the contract inside the Ministry of Interior Affairs and not even at EADS headquarters, but in the Midocar building, a company which didn’t even have an official role in the development of the contract. Unofficially, however, it seems that they had a decisive role. As revealed in the Investigation Report concluded by the Munich prosecutors, EADS paid in 2006 and 2011 four million euro to this company. The investigators believe that a large portion of this money was bribe money meant for dismantling the resistance of the new negotiation partners.
The EADS money got to Romania
More EADS money flowed to a second company in Romania. Another one who had no idea about border security, but rather about crossing them, mainly in the commercial sector. ICAR Business Research SRL collected 2.2 million euro, according to the data presented by the investigators, in 2005 – 2009 from EADS. For what? The investigators assume that it was for bribes. One thing is certain: the owners of ICAR also had the best relations with the Romanian Government and the Secret Services. The owner of ICAR, Cătălin Harnagea was, from 1197 and until late 2000, the SIE director, and his partner, Dorin Marian was, in late 90’s, the security adviser and coordinator of secret services for the former president. It seems that these were reasons enough for EADS to conclude with their company a consultancy contract for a period of four years, starting with 2005, although Marian and Harnagea had only taken over the company and it was only starting out as a public opinion research institute. Marian and Harnagea vehemently deny ever paying dirty bribe money. Harnagea however confirms having met with two Ministers of Interior Affairs and other officials to support the EADS cause. The former head of Foreign Intelligence Services also argues the fact that he was a close friend of Prime Minister Tăriceanu. He is now the president of the Senate, and Harnagea works for him as a security adviser. The both deny, however, of ever discussing the EADS contract.
According to Tăriceanu’s statements, he wasn’t even ever involved in the development of this contract, as it was not within his attributions. The two Romanian owners of Midocar refused to make any statements regarding the EADS deal. Their partner in Hamburg, Henry R. admits of being involved in Midocar Consulting and of knowing about the investigations conducted against EADS. He stated that he is only involved in the automobile business of the Midocar group and that he has no relation with the consultancy activity performed for EADS. He also declared that he didn’t have any contacts with the Secret Services. EADS refused to make any statements regarding the above-mentioned deal. The justification: the internal investigations, conducted by a hired company Freshfields, are not yet concluded. The former German manager of the company, Zoller, denies any accusation of corruption. He says that personally, he had no knowledge of any informal payments. A single person is not at all surprised of the suspicions of the Munich prosecutors: former President of Romania, Traian Băsescu. No, he wouldn’t be surprised if it was proven that dirty money flowed from Midocar and ICAR. The fact that DNA verified last year the residences of the Midocar and ICAR associates, Harnagea and Marian, fits perfectly the described picture. The fact that civil servants in Romania would be clean doesn’t fit this reality.
Cătălin Prisacariu, Sorin Ozon