Ulrich Grillo, head of the German Industry lobby, is now implicated in the Greek arms bribes

By Nikolas Leontopoulos

For years the investigations led separately in Greece and in Germany about arms deals between the two countries focused mostly on the recipients of the alleged bribes. That was normal given the fact that prosecutors were trying to follow the trail of the money, starting from its final destination: where did the money show up? And even when the investigations finally came through, they would only get the ‘small fish’, some middlemen in Greece or a handful of medium level executives in Germany directly involved in the channeling of the illicit payments.
It seems that time has come to focus on the real culprits of the corruption scheme. While Greek politicians are already on the spot (with Akis Tsohatzopoulos serving time and other former ministers being investigated or indicted), businessmen and top executives in Germany have until now been able to escape scrutiny. Even after Ferrostaal, a German firm, was proven guilty for kickbacks in the submarines case, the two executives (Haun and Muehlenbeck) that confessed handling the bribes were convicted but never imprisoned: They paid fines of €36,000 and €18,000 respectively, and were sentenced to a suspended sentence. The bribes amounted to dozens of millions.
Is this about to change? A Der Spiegel report (in German), published on Monday, focuses for the first time on the role played by Ulrich Grillo who led the Rheinmetall Group during the “suspicious” period. Grillo is no small fish; he is currently the boss of BDI, the powerful Federation of German Industries.

Mr Grillo joined Rheinmetall in 1993. He was later appointed deputy chairman of the executive board of the Rheinmetall DeTec in Ratingen and stayed with the group until 2001. Prosecutors in Athens and Bremen have already located suspicious payments linked to Atlas, a subsidiary of Rheinmetall, covering at least the period 1999-2001, when Grillo was leading the firm.

Could he have not known?
The question raised by Der Spiegel is whether Mr Grillo as well as the other heads of the German firms involved in the Greek corruption scandals bear any responsibility, legal or moral. Until 1998 bribes to foreign officials were permitted by German law but Grillo stayed at the helm of Rheinmetall until 2001.

A key name in the quest for more transparency is Panos Efstathiou, the 83-year-old Greek representative of Rheinmetall and Atlas. In total, according to judicial sources, Efstathiou channeled more than €40 million in bribes on behalf of the German firms he represented. According to Suddeutsche Zeitung six former executives of Rheinmetall, STN Atlas and Krauss-Maffei Wegmann (KMW), are among those under investigation. Grillo might well be one of them as Der Spiegel also speculates. One of the new elements brought to light by Efstathiou is that part of the kickbacks disbursed by the German firms went back to top executives of those same firms.

When the Der Spiegel reporters confronted Mr Grillo, he sounded “nervous”. He is quoted as saying: “I had no information that in our business in Greece there have been illicit payments”. Mr Grillo went on to argue that even if there had been such payments, he would not be aware of them, as, due to his high rank, he was “not involved in any business projects”.

Efstathiou, through his lawyer, says that he has met only once in person with Grillo, during a visit by the German businessman in Athens. He also claims they did not ever speak about bribes. He insists however that the top management of the company could not have ignored what was happening. He told Spiegel: “Any person who was aware of the amount of my commissions, must have known that they also included bribe payments”.

Mr Efstathiou’s claims are supported by more tangible evidence. According to Der Spiegel, in 1999, the top management at Atlas asked in writing the mother companies about the unusually high provisions paid to the Greek representative. Grillo maintains he moved to the top company a month after the alleged note.

Another key person for the prosecution is Antonis Kantas, the former No3 of the Greek ministry of Defense who has admitted “taking so many bribes that I’ve lost count of them”. In his testimony, seen by ThePressProject International, Kantas says that Efstathiou in 1999 offered him 600.000 euros on behalf of Atlas. At the time Grillo was already leading Rheinmetall, mother company of Atlas.

Some critics argue that Kantas was cautious not to name high rank politicians in Greece and businessmen in Germany. This is especially true when it comes to Atlas. Asked by the prosecutors, Kantas replied: “I am not aware of who Mr Efstathiou was cooperating with. I‘ve never met any Altas executives; nobody knew about the payments Efstathiou made to me.”

Bestechung (bribery) 101
Kantas shed more light on the other huge deal that is being investigated, the sale by German firm Kraus-Maffei Wegmann (KMW) of Leopard 2 tanks to Greece for an amount reaching 1.7 bn. Kantas testimony provides a very meticulous description of the way the system worked. Kantas speaks of three parallel layers of bribes depending on the position of the recipient. The representative of the German company would be giving bribes to the executives of the MoD while bribes to the minister were arranged by the German company itself.
Kantas testified that the Greek representative of Wegmann had promised him 0.5% from the total €150,000,000 of the deal. The middleman assured him that “higher levels had been taken care of by the firm.”

All German defense companies named by Kantas and Efstathiou have denied allegations. Atlas told Reuters it was carrying out an internal investigation and would then “decide on the steps to follow” while KMW said in a statement:”KMW has neither paid bribes nor made anyone pay bribes, and obliges its employees and business partners to strictly comply with the law”.

For decades, Greece has sustained one of the highest levels of defense expenditures as a percentage of GDP in the world. As the country could not afford such spending spree, most deals were made possible through lending by European banks. Der Spiegel comments: «In 2000 business [for Rheinmetall] was not going well, and the company needed urgently contracts of millions. Greece looked for the management of the company under Grillo as a lucrative market”.

Grillo took office as president of BDI, the German Federation of Industries, on January 1st 2013. In what now appears as a blatant expression of hubris, Mr Grillo in August 2013 in an interview with Westdeutsche Allgemeine Zeitung publicly called the Greek government to transfer all public assets to the European Stability Mechanism (ESM) to serve as collateral for the Greek bail-out. He was quoted as saying: “Greece has public assets of many hundreds of millions of euros – for instance companies in the sectors of energy, ports, airports and other properties”.

(Writing by Nikolas Leontopoulos; Edited by Dimitris Bounias)