Austria seeks $1.2bn from Eurofighter over ‘order flaws’

Bloomberg

Austria is seeking as much as 1.1 billion euros ($1.16 billion) from Eurofighter Jagdflugzeug GmbH and its main shareholder, Airbus Group SE, after a probe concluded the companies deceived the government in a 2003 purchase of fighter jets.
The Austrian Defense Ministry’s five-year investigation into the 1.96 billion-euro contract found that Eurofighter knew it wouldn’t be able supply all 18 jets in the configuration it had offered and on time. Investigators concluded that Austria was overcharged for expenses that included lobbying and alleged kickbacks, according to a Defense Ministry task force report published on Thursday in Vienna.
“We can’t accept that Austrian taxpayers are co-funding bribes by way of the purchase price,” Defense Minister Hans Peter Doskozil told journalists in Vienna. “We have clear evidence that Eurofighter and Airbus deceived Austria. This
deception has caused massive
financial damage.”
In addition to 183 million euros in unjustified costs that went to a “network of consultants and interested parties,” investigators concluded that Austria would have ordered jets from rival Stockholm-based supplier Saab AB had it known about the fraud. Those aircraft would have been cheaper to buy and to maintain than Eurofighters, according to the government, which used the cost difference as part of its claim for damages.
The findings of the probe were filed to Austrian criminal prosecutors who’ve been investigating allegations of corruption linked to the deal for years. Austria will join an eventual criminal proceeding with incidental action to pursue the compensation for the damages. The prosecutors haven’t brought charges yet.
Martin Aguera, an Airbus spokesman, said the Toulouse, France-based manufacturer can’t comment on Austria’s allegations because it learned about them by way of media reports. Airbus has supported Austrian authorities in previous years with its own investigations, he added in an e-mail.
Doskozil said experts in his ministry will also review until the end of June the current setup of Austria’s aerial surveillance including what this means for the current flying stock and future purchases.
Apart from the Eurofighters, Austria also still operates a few old Saab AB fighter jets from the 1970s which will be decommissioned until 2020, according to the ministry.
Airbus owns 46 percent of Munich-based Eurofighter. Its other shareholders are BAE Systems Plc of the U.K. and Italy’s Leonardo SpA.