German Companies Allegedly Paid Millions to Win Greek Contracts

The German offices of Rheinmetall AG and Atlas Elektronik were raided last week as part of an investigation into allegations their employees bribed Greek officials to win contracts, according to published reports.

Unnamed employees of the companies are being investigated for alleged payments to Greek officials in order to win submarine equipment contracts between 1998 and 2011, a spokesman for the prosecutor's office in Bremen, Germany, told Bloomberg News in an interview. The prosecutor, Frank Passade, told Bloomberg that Atlas is being investigated for allegedly paying €8.5 million in bribes during that time period. Atlas Elektronik, which makes naval electronics, is a joint venture between ThyssenKrupp AG and European Aeronautic Defence and Space Co. (EADS)

Passade told Bloomberg that Rheinmetall, which makes armored cars, allegedly paid €9.1 million in bribes to Greek officials. Searches of the offices took place last week, but Passade did not reveal the names of the employees allegedly involved.

The searches were first reported in the German newspaper Sueddeutsche Zeitung. A Rheinmetall spokesman told that paper that the allegations were baseless. Officials from ThyssenKrupp and EADS confirmed the raids of their offices, and a ThyssenKrupp official told Reuters that its own compliance investigation discovered the matter and subsequently notified authorities.

The prosecutor, Passade, confirmed that information.

“Atlas informed us in 2010 about the matter, but at the time the facts indicated that we didn't have jurisdiction since everything happened abroad,” Passade was quoted by Bloomberg as saying. “Tax investigators inspecting Rheinmetall's books last year brought new aspects to light, prompting us to open a probe.”

It is not the first time submarine contracts have been surrounded by bribery allegations in Germany. Ferrostaal GmbH paid a €149 million settlement in 2011, stemming from charges that the company was involved in paying bribes to Greek and Portuguese officials to win submarine contracts.