November 27, 2012 / 4:28 PM / in 5 years

Austria says Magna got business from Eurofighter deal

VIENNA, Nov 27 (Reuters) - Industrialist turned politician Frank Stronach’s Magna International did 350 million euros ($454 million) in business related to a controversial Eurofighter deal, Austria’s economy minister said.

Austria decided in 2003 to buy EADS Eurofighter jets rather than competing planes from Lockheed Martin or Saab, and prosecutors are now investigating allegations that bribery influenced the decision.

As part of the agreement, EADS had to guarantee offset deals that would mean twice the deal value would flow back into the Austrian economy through related business such as supply agreements, infrastructure or education projects.

Such transactions were not in themselves illegal but it is suspected that many companies represented their normal business as offset deals to the Austrian economy ministry, which had to approve them, to help EADS meet its target.

In addition, prosecutors believe EADS paid tens of millions of euros in bribes to politicians and civil servants through a network of phantom companies.

Stronach, an Austro-Canadian billionaire who launched a new, eurosceptic Austrian political party this year, has previously denied profiting from the 1.7 billion euro Eurofighter deal.

Economy Minister Reinhold Mitterlehner said on Tuesday that Magna had submitted contracts via partners for approval as offset deals, and that the Magna employees responsible for them had confirmed this in writing.

“There are facts,” Mitterlehner told the Austria Press Agency, adding that the deals were worth 350 million euros.

A Magna spokeswoman said: “Magna does not dispute that offset deals took place and has not done so in recent days, but we would not like to comment on these in detail.”

This month Stronach quit the board of Magna, the automotive parts firm which grew out of a company he founded in 1957, saying he wanted to focus on his political activities.

EADS this month launched an external review of its anti-corruption rules, and Austria’s defence minister has said Austria may seek to cancel the contract if bribery was found to have played a part.

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