Revealed: How Paying Double For German Subs Helped to Sink Greece

By John Ward

“We paid double for three submarines from Germany,” says an Athenian source who has lodged several incriminating documents with The Slog. Most of this, once again, seems to involve the near-ubiquitous role in German engineering and arms supplies of the multiply corrupt company Ferrostaal. Looking at the numbers, some of this appears to have been German profiteering connected to payoffs: “we give you 3 million euros, you lets us stuff the invoice with another 20 million” and so forth. And always in this farrago of filled pockets lurks the presence of numerous company acronyms MFI, MIE (Marine International), PDM, Zelan etc….all odd joint ventures and often registered in Liberia or Cyprus. All of them have obvious attachments to Greek elite members, and most of them in turn have connections to civil service procurement officers and/or senior politicians.

Several names crop up with menacing regularity….especially those of Yannis Beltsios, Michel Filipidis, Michael Matantos, Tony Georgiades, and his now retired father in law on the Board of Bank of Greece (a major participator in the recent default bond swap conducted by Athens) George Lanaras.

Using the quaint terms ‘related offset transactions and obligations’, MIE’s books for instance (supported by an independent legal investigation pointed out to The Slog) show that Michael Matantos of MIE alone handed on a grand total of 55.1 million euros during the period 2000-2004. Most of this was to oil the wheels (aka grease the palms) in relation to the supply of four submarines from Kiel dockyard.

The individual payments noted in that exhaustive report are horrifying, but relatively small-fry:

Between 2002-04, Ferrostaal paid 7.5m euros to PDM and Zelan. No activity of any substance can be traced to this Cypriot-based duo, and all the record of directors have vapourised. But their job was to ‘facilitate contract awards’ by Greek ministries. ‘The complete lack of any documentation supporting performance by these companies raises serious concerns’, says a confidential German report. In 2004, Dusseldorf prosecutors fingered Sotiris Emmanouil, the head of Hellenic Shipyards, as the recipient of illegal bribes running into millions of euros by yet another intermediary – HDW – and a later report showed he had indeed received 2.2 million euros via an affiliate in October of that year. Again, no evidence of services supplied exists. In July 2007, 11 million euros were handed to shady ‘facilitators’ Dolmarton. No back-up of tasks performed.

But when it comes to the Greek government’s purchase of four 214 Class submarines from Germany after 2000, you have to see the amounts syphoned off to believe them. Says the legal investigation referred to earlier:

‘The Project Archimedes [submarine supply] contract was signed in 2000. It was in the volume of 1.14bn euros…..the [German supplier] consortium incurredadditional offset obligations of 1.53 billion euros.’

So the price to the Greek taxpayer doubled….entirely due to corrupt payments made to the Greek governing elite.

A fourth submarine supply contract was signed May 2002. The audit investigation quoted above states that it ‘had a volume of approximately 464.9m euros….and offset obligations of 563 million…’

Again, backhanders doubled the price. And, say several Greek sources, even the ‘real’ price had been stuffed with additional items that represented profiteering by Ferrostaal and its associates.

This is hardly surprising when you consider Ferrostaal’s onerous expenses: between 2000 and 2003, the German supplier paid MIE a staggering 84 million euros, of which over 50 million went on bribing the necessary signees in the never-ending line of outstretched hands called the Greek Elite.

But it is the now even more heavily burdened taxpayers of Greece who are paying the price for this crude rip-off. Most of the perpetrators are doing very nicely thank you. For example, Ferrostaal worked with Yannis Beltsios and paid him €1 million because Greek Defence Minister Akis Tsohatzopolous instructed them to. In April 2011, Parliament voted to prosecute Tsohatzopoulos for corruption….but in August, Greece’s Supreme Court ruled against pursuing the bribery charge because the charge of accepting bribes has been barred by the 2005 immunity law.

That law was authored and pushed through by….Evangelo Venizelos. And naturally, Akis and Evangelo have been colleagues together in PASOK for nearly two decades.

Ever more outward go the tentacles of Greek elite squids, these gigantic deep-bribed calamares. George Lanaras’s ex-wife, following years of corrupt sales to South Africa, married F W de Klerk. Lanaras’s son in law Tony Georgiades is a billionaire shipping magnate, and alleged key sanctions-buster under apartheid. He reportedly had the ear of South African President Thabo Mbeki while acting as a lobbyist for  Ferrostaal, which led the German submarine global marketing consortium. No matter who’s in power – black or white – these eminences grisesare always there in the shadows.

Michel Filipidis is a lawyer who moved to France, where he owns and runs Syspertec, a software information specialist ‘serving large companies, banks, and financial institutions’ as the website puts it. Syspertec is being modest. It’s clients include the French Central Bank, the French Tresor Publique, BNP Paribas, Credit Agricole….and many other institutions hugely exposed to Greek debt and fearful of a Hellenic default. Well well well.

And Michael Matantos is a director of three  companies, Unimog Investments, Kassos Steam Navigation, and Sunbeam Maritime. It is remarkable how many of the intermediaries in this tale have names including ‘maritime’ or similar. Like Marine and Industrial Enterprises (MIE) of which we learned so much in yesterday’s Slogpost. Matantos’s partner in Sunbeam is Constantine Kyrkilis…who used to be an Executive Vice-President at MIE.

Nothing changes, and nothing ever will as long as these leeches are on Greece’s back. And they are, in essence and influence, the reason why the Greek elite didn’t tell the Troika to go jump in the lake months ago. For these people are part of a vast network of sales, graft, survival and prosperity which would largely cease to exist were Greece to be ejected from the EU.

The Greek nation is facing default for all kinds of reasons that range from insane lending policies by French and German banks to clever schemes worked out by Goldman Sachs to help the Greek Establishment lie to Brussels. But is is also in the mire because of many such cases of official greed and German profiteers. Perhaps, the next time German tabloids start shrieking about ‘lazy Greeks’, they should bear this in mind.

I am grateful to many brave Athenians for their help in compiling this series, but special thanks must go to the folks

Related: Arms bribery and the overflowing bank account of Evangelo Venizelos

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