Exploring the 'Bullshit Castle': Airbus Corruption Scandal May Lead Straight to the Top (excerpt)
(Source: Der Spiegel; published October 09, 2017)
A potentially vast corruption scandal threatens to overrun Airbus, with a Paris-based sales group suspected of having paid bribes around the world. German CEO Tom Enders is leading the clean-up effort, but documents reveal that he might not be as spotless as he claims.

This is a story of a global company. About its secrets. It is the story of a corrupt corporation. The company is called Airbus.

It is a story that begins with the word "shit," with a Dacia Duster and with a tiny company that could cost the CEO of Airbus his job. Because he, too, apparently has a bit of a skeleton in his closet. But first things first.

First, the word "shit": It is June and top company managers have gathered for a meeting in Toulouse, France. CEO Tom Enders is standing on the stage. He has been with the company for 17 years, but his English is still less than fluent and he speaks with a heavy accent. But the message to his top managers is nevertheless crystal clear. "If there are still people in this room, that believe we should put the shit under the rug -- then I would have to say, I give up on these people."

Enders, 58, speaks of a past that Airbus has long sought to deny, years in which the company partly relied on bribes as it rose to become the world's second-largest airplane manufacturer, after Boeing. And Enders speaks of a present in which all of that is beginning to come out -- a situation that poses grave dangers to the company he runs.

At issue are potential multibillion-euro fines and multibillion-euro losses. Indeed, the very survival of Airbus, with its 134,000 employees and its annual turnover of 67 billion euros ($78.6 billion), could be at stake. Hence, the message from Enders to all those who haven't yet got the message, to those who think they can just carry on as before, including the bribery: "Leave this company rather than make us take you out of the company. Because we're in a dead serious situation, dear colleagues."

Which brings us to the Dacia Duster. At the end of May 2017, in the Romanian city of Bacau, a man was finally able to fulfill his dream of buying a new car, having managed to save up enough money for a diesel vehicle from the affordable Dacia brand: a special edition Black Shadow Duster. To make the purchase, though, Constantin Ster had to take out a loan -- and a quick glance in the commercial registry provides a clue as to why: Last year, his company only had 1,300 euros in turnover, and the company before that went belly up.

Straw Man

Ster is bankrupt and not exactly a big fish. Yet he is thought to have pocketed more than 5 million euros from the airplane manufacturer, which was still called EADS at the time. The money was allegedly in exchange for the procurement of orders. But Ster seemed bewildered when he was faced with such accusations from investigators. If he hadn't received the money, then where did it end up, they asked? What role was played by Ster, owner of a 15,000-euro car bought on credit, the straw man of the corporation?

And now, to the small company: State prosecutors from Munich interrogated the Romanian man all the way back at the end of 2015 and they have interviewed many other witnesses since. The Bavarian investigators have been on the case for five years and are likely to hand down indictments in the coming months -- against a whole list of former EADS executives and their henchmen.

They are suspected of having constructed a vast empire of corruption for the company -- and in the center of it all stands Vector Aerospace in London, a two-person company that received 114 million euros from EADS. What did Vector do for all that money? Investigators have only been able to find records pertaining to 9 million euros. The rest was distributed to shell companies in places like Hong Kong, Singapore and the British Virgin Islands. It would seem to have disappeared.

Until recently, it had looked as though that network of shell companies only pertained to the sale of 18 Eurofighters to Austria, built by a consortium led by EADS. State prosecutors based in Munich wrote in a supporting document from December 2016 that "significant sums of money" from the Vector kitty were "to be used for bribery payments to decisionmakers ... in Austria." The bribes were to ensure that Vienna placed its warplane order with the Eurofighter consortium.

But apparently, that wasn't all. Now, there are indications that the millions of euros that came from Vector and flowed via the Romanian man actually ended up in the passenger jet business. And that has led to suspicions that Vector actually served the entire company as a source of bribes. Vector, the Munich prosecutors wrote, was also responsible for "keeping concealed money available for future corruption needs" and to keep those funds "separate from EADS assets." In other words, a slush fund "created intentionally by those involved," and not just for the fighter plane order from Austria. It seems likely that the suspicions will end up in the formal indictment before long.

If all of the above is confirmed -- and Airbus denies the accusations in this case -- that would be bad enough for Tom Enders. It would, in fact, be "shit." But even before the dubious company Vector was founded in London in 2004, there had been another company in Cyprus. It, too, is thought to have received a significant amount of money from EADS, apparently also to drum up business to boost the Austrian economy. That was the promise EADS made to Vienna in exchange for the Eurofighter order. And the predecessor company in Cyprus was also dubious. And who approved its founding according to the minutes of the relevant meeting? Tom Enders. And who received a long memo when Vector took over? Enders again. The same man who is currently posing as the anti-corruption superhero. (end of excerpt)

Click here for the full story, on the Der Spiegel website.


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