The Czech Republic may be about to face one of the biggest corruption scandals in the country's history. Britain's Serious Fraud Office is running an investigation to determine whether or not Czech politicians accepted bribes from one of the British Army's main arms suppliers, BAE Systems.
In 2002, the government headed by Social Democrat Milos Zeman decided to replace the army's ageing fleet of Mig-21s with twenty-four JAS 39 Gripen fighter jets from the British-Swedish consortium BAE Systems/SAAB. The cabinet approved the 60 billion crown (2.8 billion US dollars) purchasing contract in April but failed to get the green light from the Senate.
But a closer look into the accounts of BAE Systems has the British Serious Fraud Office suspecting that the company spent large amounts of money on bribes in an effort to get Czech politicians to support the deal. The case is now under investigation by anti-corruption police departments in the Czech Republic, Britain, and Sweden.
Speaking to Czech Television, former prime minister Milos Zeman did not rule out that the deal may have been corrupt:
But charges of corruption were already filed in the Czech Republic back in November 2002. The then Civic Democratic Alliance Senator Michael Zantovsky reported to the police that his party was offered 10 million Swedish crowns in return for his vote. The case was shelved a few months later for a lack of evidence.
The Civic Democratic Senator, Premysl Sobotka, now says he was made a similar offer. Men he had never seen before, he says, approached him on the street and promised to help him out with a few investments if he pledged to support the deal.
This week, the Swedish press reported it had the names of three agents who served as middle men. One of them, Otto Jelinek, served the Czech Republic as International Coordinator for Economic Activities last year. Mr Jelinek has not commented on the allegations. It also says an unnamed source had provided more detailed information regarding bank transfers, commissions, and concrete names of the firms and individuals involved.
David Ondracka of the corruption watchdog Transparency International in Prague has been following the case. Should the investigations confirm the suspicions, the country will have to brace itself for serious consequences, he says:
"The reputation of the country would be harmed seriously. The Czech Republic would be seen as a country that is unable to enter into defence contracts in a clean way and that is why it would need to draw some consequences from this. Those people would definitely have to leave their posts and there would potentially be criminal proceedings. In my view this is one of the major corruption cases in the country's history and that is why it is very important for the investigation to proceed smoothly and come to a successful end. In my view it is important for the country."
BAE Systems/SAAB is being investigated on suspicion of corruption in five other countries - South Africa, Tanzania, Chile, Qatar and Romania.
In 2004, in a 20 billion crown ten-year deal, the Czech Army signed a
contract with BAE Systems/SAAB to lease - rather than purchase - 14 Gripen
fighter jets. The Swedish media reported on Tuesday that this deal too was