Alfons Mensdorff-Pouilly under arrest

Count and money

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By Josef Barth, Ulla Schmid and Martin Staudinger

Friday, February 27th, right after teatime: Mr. Alfons Mensdorff-Pouilly, an Austrian count and advisor to the British defence company BAE Systems, had spent the afternoon in his castle in the Austrian village of Luising, right next to the Hungarian border, when police knocked at the gates. They had come to arrest him.

According to Michaela Schnell, spokesperson of the Viennese prosecutors, who was talking to profil, Mr. Mensdorff is said to have received 13 million Euros in untitled payments from BAE Systems. Schnell also said that the money may have been funneled to Mensdorff via bank transfers from several companies. Mensdorff had already been questioned by Austrian authorities concerning these transactions. According to Ms. Schnell, he tried to legitimate the payments with fake documents at the time. Now, Austrian authorities suspect that Mr. Mensdorff is involved in a case of money laundering. This claim has not been proven yet.

Mr. Mensdorff, husband of the former conservative Austrian health minister Maria Rauch-Kallat, was taken to jail in Vienna to be questioned by the police Friday night. He was accompanied by his lawyer. In February 2007, investigations of several European media outlets had indicated the existence of a vast network of companies used by BAE to pay bribes. There is the allegation that this happened for example, when BAE negotiated with the Czech Republic in 2003. At this time, Mensdorff and his consulting company MPA had already been working for BAE for more than ten years. Also in the Czech Republic.

“MPA GmbH had a contract with BAE since 1992. We advise BAE in six or seven countries including the Czech Republic“, Mensdorff confirmed towards profil. Additionally, Swedens investigative TV magazine „Uppdrag Granskning“ managed to rustle up a secret agreement from 2003 showing that Mensdorff was also working for a Panamanian company registered in Switzerland: Valurex International S.A. In turn, Valurex had been provided money by BAE in connection with the Gripen deal in the Czech Republic. Pressed by profil, Mensdorff denied any involvement in shadowy activities regarding the sale of Gripen. He assured having worked for Valurex only since 2005. And anyway: “I have never offered provisions or bribes to sell the Gripen. Nor have I ever talked to a Czech politician or member of the parliament about this issue”, he told profil.

At least the last assertion became questionable in late December last year, when profil broke news about charges brought against Mensdorff by one of his relatives. In his complaint, Michael Piatti-Fünfkirchen describes, how he had to organize a meeting between the then Czech prime minister Milos Zeman, his finance minister Ivo Svoboda and Mensdorff. Piatti-Fünfkirchen claimed that Mensdorff had hoped to change the already official decision of the Czech Republic for F-16 jets of Lockheed Martin “in favour of BAE Systems plc” (quote from the complaint).

Fact is: Czech investigators have at least once confirmed the attempts of bribery during the time while the leasing-contract was negotiated. According to their investigations, BAE secretly paid 8,7 million Euros to Czech officials in order to close the leasing-deal on 14 JAS39 Gripen jets. Reportedly, the money was funneled to the officials via an Austrian businessman. There is no proof that this businessman was Mr. Mensdorff. Fact is also: In 2005 the first Gripen touched down in the Czech Republic. Surprisingly, the government in Prague had axed Lockheed and decided for BAE.

However, Mensdorff all of a sudden didn’t want to be associated with the success anymore. Piatti-Fünfkirchen assumes, that this has to do with financial reasons. Anyhow, Mensdorff had promised him a share of one million Euro in case the deal would be closed with the desired outcome through his intermediation.

profil wasn’t able to get in contact with the lawyer of Mr. Mensdorff on Friday night. He was still with his client then.