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NGO: German firms mired in worst Greek corruption scandals since WWII

Justice & Home Affairs

NGO: German firms mired in worst Greek corruption scandals since WWII

German-manufactured Leopard IIs operated by the Greek military.


Siemens, Daimler, and Rheinmetall have been mired in cases of alleged corruption in Greece, the country that Berlin has repeatedly admonished for the parlous state of its economy.

No date has been set yet for 19 former executives of German engineering group Siemens to appear in Greek court, but it is expected to be one of the biggest financial trials of the decade in Greece.

More than 60 people in total are being investigated for corruption in the case that US watchdog CorpWatch has labelled “the greatest corporate scandal in Greece’s postwar history.”

Bavaria-based Siemens, whose links to Greece go back to the 19th century, is suspected of having greased the palms of various officials to clinch one of the country’s most lucrative contracts — the vast upgrade of the Greek telephone network in the late 1990s.

Overall, Siemens allegedly spent 70 million euros on bribes in Greece, according to Greek judicial sources.

The investigation is now in its ninth year with a case brief over 2,300 pages long.

Contacted by AFP, a Siemens spokesman at company headquarters in Munich said: “We don’t comment on that case.”

Among those suspected of corruption is the group’s former point man in Greece, Michalis Christoforakos.

>>Read: Greece scores worse than Bulgaria in corruption ranking

But the 62-year-old, who holds dual Greek and German citizenship and at the height of his influence rubbed elbows with the ensemble of Greece’s political elite, is unlikely to face trial.

Christoforakos fled Greece for Germany in 2009, and German justice has refused to extradite him, arguing that the statute of limitations covering his alleged activities has lapsed.

Relations between Athens and Berlin — already tested by the Greek economic crisis and Germany’s insistence on painful austerity to bail out the debt-wracked country — have not been helped by the Siemens case.

Earlier this year, Greece’s combative parliament speaker Zoe Constantopoulou said the affair smacked of double standards on the part of Berlin.

“This is a question of justice that shows there is doublespeak by Germany,” she told France’s Liberation in a recent interview.

“German companies have notoriously engaged in corrupt practices in Greece but such cases are only occasionally investigated,” the German Foreign Policy think-tank said in a recent report.

According to Transparency International and its 2014 corruption perception index, Greece’s public sector was regarded as one of the most corrupt in the European Union.

In 2011, at the height of the Greek economic crisis, a parliamentary inquiry estimated the damage to public coffers at two billion euros from inflated contract costs ultimately borne by taxpayers.

Lucrative military deals

Arms procurement has been another lucrative field for German companies, with Greece for years spending the most money proportionately on defence – 2.2 percent of gross domestic product (GDP) in 2014 — among EU members, Sahra Wangenknecht, a lawmaker of Germany’s leftist party Die Linke, told AFP.

“German companies have reaped considerable profit from Greece’s colossal arms purchases,” Wangenknecht said.

For automaker Daimler, Greek justice opened an investigation earlier this year on suspicion of bribery in the award of an 100-million-euro military vehicle contract.

>>Read: Germany’s Schäuble says ministers to discuss Greek credit line

Krauss Maffei Wegmann, the makers of the German Leopard tank, was also placed under investigation in Munich.

Meanwhile, fellow defence contractor Rheinmetall in 2012 was fined 37 million euros by a court in Bremen, Germany, over a bribery case involving the sale of its anti-aircraft defence system for 150 million euros.

And two former managers at industrial services provider Ferrostaal were also convicted in Munich of shady payments to clinch a Greek submarine order, with the company fined 140 million euros.

But observers note that the fines are usually nowhere near the value of the government contracts in question, effectively rendering them useless as a deterrent.