Wednesday

22nd Feb 2017

Investigation

Arms deals and bribes: The downfall of Slovenia's former PM

  • Jansa (l) arriving at EU Council in his time as PM (Photo: consilium.europa.au)

Former Slovene prime minister Janez Jansa was sentenced on Monday (28 April) to two years in prison over a high-profile scandal involving defence contracts and bribery.

The decision by the Higher Court in Ljubljana, which upholds an earlier ruling by a district court, is expected to be followed within weeks by a call for Jansa to start his custodial sentence.

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  • Finnish journalist Magnus Berglund and Slovene journalist Blaz Zgaga broke the story (Photo: MelkiaD)

Jansa's lawyers have pledged to challenge and to "invalidate" the verdict.

It all started in 2005, during Jansa's first year in office, when the defence ministry began a purchase of 135 armoured modular vehicles. In December 2006 Finnish defence contractor Patria signed a €278 million deal. Rumours about corruption immediately started to spread.

In February 2007, Austrian police alerted colleagues in Slovenia, Finland, Thailand and Canada about possible irregularities concerning the deal. Slovenia's police overlooked the cable for 15 months though it subsequently came to light when the scandal broke.

But for the foreign press, Jansa, whose authoritarian style of rule included stifling the local press, might have contained the scandal.

On 1 September 2008, a few weeks before Slovene parliamentary elections, Finnish public television YLE aired an investigative documentary.

Its concluding words were: "J is Janez Jansa, prime minister of Slovenia. He was the chairman of the council of ministers of the European Union for the first half of 2008. The Prime Minister's party was also a beneficiary in the Patria deal. In other words: The Finnish state-owned Patria bribed the Prime Minister of Slovenia."

Slovene online media Vest.si simultaneously ran a similar story.

It became a major scandal in both countries. A few days later the Finnish documentary was aired by Slovenia's public broadcaster. An urgent session of the Slovene parliament was called and the Slovene foreign ministry issued two diplomatic cables to Finland threatening worsening of bilateral relations because of the investigative programme. At the end of the month Jansa's SDS party lost the elections by a tiny margin.

Finnish journalist Magnus Berglund and his Slovene colleague – the author of this story – revealed the whole bribery ring. On February 2007, €3.6 million was paid by Patria to its Austrian representative Hans Wolfgang Riedl.

He immediately forwarded €2.3 million to former F1 racing team owner Walter Wolf, who tried to send money to more countries. But Austrian anti-money laundering officials blocked the transactions and notified the police.

The Finnish police then took over the main burden of investigation.

It was confirmed later that Austrian middleman Hans Wolfgang Riedl was entitled by Patria to 7.5 percent of the value of the deal or €12.1 million, of which he was supposed to forward 4.2 percent or €6.7 million to Walter Wolf. He, in turn, was responsible for bringing money to Slovene businessman Joze Zagozen and his boss, Janez Jansa.

Early bribe payment request exposes scandal

Every payment was to have been made after delivery of each vehicle, but the corruption scheme was exposed in February 2007 when pre-payment of bribes specifically requested by the Slovene side triggered a police investigation.

Slovenes requested pre-payment to the tune of 30 percent of all agreed bribes to be paid in 30 days after contract signature. According to testimony by a Finnish manager, the Slovene SDS party needed money for an election campaign.

Additionally, Slovene actors established a second channel of bribes from the company Rotis, the Slovene representative for Patria.

After the scandal erupted, prompted by the Finnish TV documentary, pro-Jansa media in Slovenia started a smear campaign against Finnish journalist Magnus Berglund while his Slovene colleague received death threats.

Jansa sued Berglund, YLE and two interviewees – including the director of police who during the YLE documentary said the Jansa government exercised political pressure – for €1.5 million in damages for alleged defamation. The Slovene journalist was interrogated by a parliamentary inquiry led by the SDS party about his journalistic co-operation with the Finnish colleague.

In June 2013, the district court convicted Jansa to two years in prison; former military special forces commander brigadier Anton Krkovic received 22 months; and the owner of Rotis, Ivan Crnkovic, got 22 months in prison. Businessman Zagozen died before the verdict. Wolf moved to Canada and is beyond reach of the Slovene justice system.

In April 2014, Jansa lost the entire libel suit.

During the same month painter Jure Cekuta was convicted to four years and four months behind bars and former chief of army logistics brigadier Peter Zupan received two and a half years in the second Patria trial. Cekuta was responsible for the other channel of lobbying and received more than €400,000 from Patria.

All the Slovenes sentenced in relation to this scandal were involved in arms smuggling in the former Yugoslavia in the 1990s.

Austrian middleman Hans Wolfgang Riedl, a former Glock and Steyr employee, received three years in prison in Vienna in April 2013.

Five top Patria managers were acquitted by a Finnish court in January 2014. The Finnish prosecutor appealed to the higher court requesting the integration of the Slovene and Croatian Patria bribery cases into a single trial.

According to court files, Patria paid at least €3.9 million for the Slovene deal and €1.5 million for a Croatian deal before October 2007.

Former president of the Republic of Croatia, Stipe Mesic, is among those suspected of being involved. He has denied any wrongdoing.

The writer of this article collaborated with Finnish journalist Magnus Berglund on the Patria investigation

Slovenian government collapses

Slovenian leader Jansa has been ousted from office in a no-confidence vote on Wednesday amid economic gloom compounded by corruption allegations.

Analysis

Slovenia's convicted ex-PM: down but refusing to be out

Slovenia's ex-PM Janez Jansa is supposed to go to prison on 20 June. But he continues to be coy about his political future with the country's laws not ruling out that he can run in next month's elections.

How the EU cosied up to the defence lobby

The EU has allowed its defence and security policies to be shaped by powerful lobbyists, many of whom are linked to firms that win lucrative contracts, an investigation shows.

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