Economist: Aircraft & bribery - Airbus's secret past
 

Interesting (and detailed) article at Economist.com. The headline reads:

"On the eve of the Paris Air Show, we explore the corrupt and allegedly corrupt methods that have boosted past sales."

I raise this topic since I have a high regard for the accuracy of reporting in The Economist, but I expect I will just start another "Airbus bad - Boeing good" slanging match!

looks like t'Baron was up to similar tricks - allegedly
 

Daily Telegraph

BAe denies Czech bribery claim
By Askold Krushelnycky in Prague
(Filed: 13/06/2003)

Britain's largest weapons manufacturer, BAe Systems, denied yesterday that it had offered bribes to senior Czech politicians as they prepared to vote on a £1 billion fighter jet contract.

[Article refers to JAS39 Gripens]

Interesting. I'm just reading a book now which talks about the bribery-fest between all the major US manufacturers when they were all trying to backstab each other (remember the ANA Tristar/DC10 deal?) and keep Airbus out of the market.

It says that in 1982 Boeing finally admitted, after years of denials, to withholding information on payments to foreign officials and pleaded guilty to paying irregular commissions to agents - mainly to Spain and Lebanon but also to individuals in Honduras and the Dominican Republic.

It seems like a well researched article, with some balance.

To me the issue is, if you looked deeply into, say, 100 big aircraft deals how many more stories like this would you be able to write? Not too mention looking into big civil engineering projects, construction contracts, etc etc.

With deals like these and such massive amounts of money someone somewhere is always getting paid off.

"Shocking, simply shocking, gambling here at Rick's." "Round up all the usual suspects."

With the amount of cash on the table it is not suprising that some is used to sweeten or assure the deal. And see how the FCPA has helped Boeing into a just over 50% share of the world jetliner market? Hard to compete when you have to play by one set of rules (or be seen to be) and others don't.

Interesting article, and I have no information on how accurate it is, but one thing struck me as slightly odd. The suspicion around the Sabena Airbus deal was that they ordered up to 34 aircraft that they allegedly didn't need - surely they had a similar number of Boeing 737s (200/300/400/500s) at the time which were getting long in the tooth (certainly the 200s) so replacing them doesn't seem so odd.

AC
 

there was also suspicion in Air Canada's purchase of airbuses.

Grouchy

yes, RCMP's hatchet job on Mulroney and so on... since BM was doing a good enough number on himself it is puzzling as to why they felt the need to push harder :D

Nothing proved though, and very embarrassing to the Mounties when they dropped the case a couple of weeks ago.

Pax,

"I raise this topic since I have a high regard for the accuracy of reporting in The Economist, but I expect I will just start another "Airbus bad - Boeing good" slanging match!"

What --here on Pprune? Naw, not here. Even minded bunch us Ppruners.

SYSOP: Danny, you don't allow any but those with open minds on the boards do you?

Thought so....


PT
:ok:

The Economist article is it's usual well researched standard.

If there has not been corruption in the aircraft industry (all manufacturers) then it will be the first industry in the world to be so.

After 23 years of commercial experience in a wide range of public and private companies, as well as government, I see ever more 'snail-trails' of corruption and opportunites for same.

I hear stories from folks telling me how they bribed people in the 1960s and 70s. I see companies getting cosy with each other for five years and then suddenly finding a new best friend. In due course, the person who negotiated that deal gets promoted. The new man (it usually is a man) then negotiates a fresh supply deal with another company. :rolleyes: This means changing all sorts of interfaces and relationships with the supplier. Five years later and it's all change, as they find that a new supplier can actually do everything better than the last one. Meanwhile, the folks inside the company just shrug their shoulders and watch the boss drive his new car into the reserved parking bay.

If I had have taken the bribes oferred to me when I was purchasing goods and services, would I have been found out? Who knows. I was not buying aircraft and the largest deal where I was oferred a bribe was only half a million pounds Stirling. Imagine the temptation when you are buying aircraft? The temptation is on both sides and is called human nature. We can only hope that we pick up a majority of it.

Another Corrupt deal
 

HI folks, want to tell u about another corrupt Airbus deal which took place in a Far eastern Country in 1994-or 1995
after Emirates took over Srilankan airlines, they very popluer Aibus Fiasco signed by the then Government was the most corrupt deals, its a public secret that the President of the Srilanka directly involved in this matter and there werer rumours that she was given a house in Egypt and Emirates paid tution fees of her Two children who are studiyng in UK, etc etc, mailnt because she singed the Airbus deal,

JAMUP

Sorry jamup, I honestly tried to decipher your post....couldn't make head or tail of it!:rolleyes:

Well in the UK the government helps out in spreading bribes around to secure contracts.

http://www.guardian.co.uk/uk_news/st...977385,00.html

Corruption is the accepted way of doing things.
 

If you live in or you do business in Moslem country bribery is a way of life. It is called Baksheesh (spelling). It could be in the millions or it could be a measly $25,000 US. In Iran the Shah got 2% of everything whether from legitimate businesses or from Baksheesh. Bell Helicopter had to pay $25,000 to a local customs agent to allow entry of frozen turkeys, canned hams and Doritos and peanut butter for the Thanksgiving holidays and the same for Christmas. Lockheed had to pay $75,000 to a customs collector to allow entry of a GE gas turbine for one of the Iranian Air Forces’ own Phantoms. This was written off as a cost of doing business and the US DOD picked up the tab.

Regarding bribery on defense programs I personally have seen a lot of it.

:hmm:

Welcome to the real world...this happens in every sphere of business the world over,not just aviation;

Anyone around Blagnac or Seattle can tell you about this over the last 20 years and more...

In my time have come across numerous 'cash backs' including cost of 'introduction to service'...several million in cash returned to a client airline for 'reprinting commercial material', deals financed 100% by banks and guaranteed by EXIMBANK, COFACE HERMES etc.

All parties seem to have very 'creative' terms from what I have seen offered in Eastern Europe and NIS...

Original Virgin A340's are an interesting case in point if the rumours of $4 million back in cash are true...

This is not unique to aviation but widespread across all business whether liked or not.

One could mention the long running Boeing appointed 'agent' in Russia who was ex dept. head of GSGA (Russian CAA) and belived to be mother of boss of Transaero...who suddenly became a Boeing operator!

It's not just Airbus, they are all at it!!

I always found it strange that following the order of 100 or so MD F-15s, the Saudi Royal fleet ended up flying the only two VIP MD-11's in the world............. :):):)

Don't just point your finger at Airbus, they certainly arent the only ones playing that game..........

Mutt.

Re: Canadian Airbus deal
The reason the Mounties pushed to get Mulroney was because it was obvious to everyone that Brian's hands weren't clean and the police were loosing face with their inaction. The fact that they found nothing amiss (big surprise!) means nothing other than how well connected BM still is. In Canada, we have a very poor history of enforcing laws when it comes to elected officials (almost Third World). This is due largely to the fact all senior officers in the RCMP are appointed by the aforementioned officials. As a result, the cops that don't want their careers capped short of their goals don't mess with those that make the appointments. Hardly independent investigators, eh? This is well documented in books like 'On the take' by Stevie Cameron and 'Above the law' by Rod Stamler (one damn fine cop!). I realise this is off topic, but I don't want people to assume that no conviction = innocence in the case of the AC/Airbus deal. Brian can try to sue me for saying so, but that deal was shady. I really don't have to worry about paying him a one million payout though- I'm a flight instructor so I don't have a pot to piss in!:p