Austria Seeks Compensation From Airbus on Eurofighter Deal -- Update

By Robert Wall 

LONDON--Austria's defense ministry Thursday said it had filed a criminal complaint against Airbus SE and could seek over $1 billion in restitution over a controversial deal more than a decade ago to buy Eurofighter Typhoon combat jets.

Austria's Minister of National Defense and Sports, Hans Peter Doskozil said a report commissioned by the government showed "fraudulent and deceitful actions" led the country to buy the twin-engine Eurofighter combat plane in 2003.

The government said the misdeeds documented by a task force established in 2012 go back as far as 2002. Airbus, then still called European Aeronautic Defence & Space Co., was vying to sell the military plane to Austria.

Airbus won the contract the following year to supply 18 jet fighters to Austria. The Eurofighter combat plane making consortium also includes BAE Systems PLC and Leonardo SpA.

Suspicions of corruption in the Austrian deal have been raised repeatedly since 2002, but remained unsubstantiated until 2006, when a parliamentary committee in Vienna identified chains of suspect payments apparently related to the Eurofighter sale, but little evidence of the intention behind the payments.

The parliamentary probe succeeded, however, in raising political questions that ultimately prompted the Eurofighter consortium and the Austrian government to renegotiate the sale, including cutting the size of the purchase to 15 planes. The contract value in 2007 was reduced to about EUR1.6 billion ($1.7 billion) from around EUR2 billion.

Austria's Attorney General Wolfgang Peschorn said "we assume that the Republic of Austria would not have signed the first purchase agreement in 2003 nor the settlement in 2007 with the terms agreed if such facts had been known."

The Austrian government said the damage to the country from the purchase price and high costs to operate the Eurofighter could be up to EUR1.1 billion and at least EUR183.4 million. It said there were other costs, not yet quantified, from operating the more expensive plane. The government said it expected to spend EUR80 million this year to operate Eurofighter planes.

Airbus Thursday said, "in recent years we have supported the activities by the legal authorities, for instance through own investigations."

The company in 2012 launched an internal corruption compliance review amid concerns over the Austrian deal and a British corruption probe into the action of an Airbus unit, GPT Special Project Management Ltd., in Saudi Arabia.

Write to Robert Wall at [e-mail]

(END) Dow Jones Newswires

February 16, 2017 05:58 ET (10:58 GMT)

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