TBR News October 9, 2017

Oct 09 2017

The Voice of the White House

Washington, D.C., October 9, 2017: “ From one of my more erudite readers I have received this comment:

‘I think you’re a little off the mark with the assertion that dwarves are behind many of the nefarious deeds committed in the world. Some of these acts are actually attributable to gnomes. The average garden gnome has a built-in mind control transmitter that can move ordinary people to do bizarre things. Many of these transmissions are sent by the shadowy academic gnomish leader, Gnome Chomsky. I read this somewhere so it must be true.’

To this I replied:

If I were to publish this at once I would be flooded with all manner of comments about who actually are behind the garden gnome plot.

The government would have its minions claim that Russia was the culprit, others would claim it was a Zionist plot while more esoteric-minded contributors would point to Scientologists or the Mormons.

And we learn that many children’s dolls that have electronic devices embedded in them can be used for surveillance purposes.

Facebook and Internet II were instigated by the government to allow them to gather information on people without having to wear out shoe leather.

And this is not a joke, believe me. I had an FBI agent tasked with surveillance explain this to me in detail once.”


Table of Contents

  • Trump: Rhetoric vs. Reality
  • US-Turkey row escalates with tit-for-tat travel and visa restrictions
  • Turkey urges U.S. to review visa suspension as lira, stocks tumble
  • Exploring the ‘Bullshit Castle’: Airbus Corruption Scandal May Lead Straight to the Top
  • Conspiracy versus Reality


Trump: Rhetoric vs. Reality

Don’t mistake the bluster for policy

October 9, 2017

by Justin Raimondo


With Donald Trump in the White House, merrily tweeting whatever disruptive and disturbing sentiments erupt from his consciousness in the early morning hours, hysteria has become the default condition of our pundit class. Trump tweets that “only one thing” can stop Korean despot Kim Jong-un’s nuclear pyrotechnics, and the editorialists swing into action, while the Democrats point gleefully to the prospect of World War III: “See? We told you he’s nuts!”

Add to this the widespread belief that Kim Jong-un is a “madman,” and the hysteria of the chattering classes reaches fever pitch: we’ve got no less than two crazy people with nuclear weapons, and they’re about to blow up the world! Oh no!

The problem with this scenario is that it has nothing to do with reality: it’s a rhetorical construct, based on the verbal extravagances of actors whose entire modus operandi depends on a constant stream of bluster, bluff, and unmitigated bullshit.

For Kim and the North Koreans, this strategy has served them well: long after the fall of communism, the withdrawal of Soviet protection, and their alienation from Beijing, the last bastion of old-style Stalinism continues to defy the West. It has taken a monomaniacal focus on a single goal – the complete militarization of their society, resulting in the utter impoverishment of the populace – but the North Koreans have managed to do it: while their little Sparta would ultimately lose a war with the United States, the price they would make us pay is far too high for the preventive war so many fear to be “on the table,” as our rulers routinely put it. North Korean artillery perched on hillsides within range of Seoul – South Korea’s bustling capital, with a population of some ten million – would wreak devastation on a scale not seen since Hiroshima, Nagasaki, and Dresden. North Korea’s one-milion-plus Army would pour over the border and smash through both the South Korean defense forces and the 30,000 or so US military personnel currently (and foolishly) stationed on the peninsula.

Millions would die, on both sides of the demilitarized zone.

For this reason, the US – despite Trump’s tweets – is not going to launch an attack on North Korea. And Kim Jong-un, whose dynasty has been in power for 70 years, is not going to make the first move either: a stalemate has preserved the regime thus far, and there’s no reason to believe that Kim wants to commit suicide.

As for Trump, the idea that he’s some kind of uncontrollable maniac about to plunge the world into a fiery fulcrum of nuclear destruction is yet another symptom of Trump Derangement Syndrome. The annihilation of South Korea, not to mention Japan – and the probable tens of thousands of American military casualties – is not something he wants on his record. Nothing is to be gained by a US military assault on the North: therefore, it isn’t going to happen, no matter what the President tweets.

In a similar vein, the anticipated decertification of Iran as being out of compliance with the JCPOA is being seized on by Trump critics as yet more evidence that he’s a madman intent on starting a war. Yet “decertification” doesn’t mean the US is going to pull out of the deal: it merely means that Trump, while posturing as Mr. Tough Guy, is going to let Congress deal with the issue while he plays to his base – just as he’s doing with the Korean “crisis.”

As Eli Lake points out, under the terms of the Iran Nuclear Agreement Review Act, Trump doesn’t have to wait for Congress to reimpose sanctions on Tehran: he has the authority to do so right now, and he hasn’t acted. Furthermore, as Lake reports, the deal’s biggest critics in Congress are not going to push for more sanctions – a move that doesn’t have the votes to pass the Senate anyway.

The vague hope of the anti-deal faction is that Congress will “reform” the Iran Nuclear Agreement Review Act to include restrictions on Tehran’s testing of ballistic missiles and support for groups like Hezbollah. Yet this is fated to end as a purely propagandistic exercise for the simple reason that the rest of the signers of the JCPOA aren’t going to go along with it.

When it comes to Korea and the Iran deal, Trump is reveling in his role as the belligerent bombastic upholder of America’s role as global bully while pursuing a policy that is nearly indistinguishable from that of his predecessors. He gets to engage in rhetorical pyrotechnics and score political points with certain constituencies while maintaining the status quo: in short, he gets to engage in what is essentially a theatrical performance entirely unrelated to what is actually occurring on the ground. His enemies, mistaking rhetoric for reality, have risen to the bait.

For all the wild predictions that Trump would have us in a major new war fairly shortly, nearly nine months into his presidency we see no signs of it: we simply have the ongoing military conflicts he inherited from his predecessors. And while that may not comport with the NeverTrumper characterization of the President as a moral monster who is quite possibly deranged, it is the reality beyond the rhetoric that the hysterics of the Twitterverse refuse to see.

As usual, these people are merely projecting their own emotional responses and political biases onto the screen of US foreign policy, a method that tells us much more about them than it does about Washington’s intentions.


US-Turkey row escalates with tit-for-tat travel and visa restrictions

US restrictions appear to be linked to arrest of consulate employee in Istanbul over alleged links to Gülen movement

October 9, 2017

by Kareem Shaheen in Istanbul

The Guardian

The US and Turkey have imposed travel restrictions on each other’s citizens in an escalating diplomatic spat that highlights worsening relations between Ankara and its western allies.

Washington said late on Sunday it was suspending the processing of all non-immigrant visas in Turkey due to “recent events” that “have forced the United States government to reassess the commitment of the government of Turkey to the security of US mission facilities and personnel”.

Ankara responded in the early hours of Monday with an identical statement, imposing tit-for-tat measures and suspending the processing of visas in its embassy and consulate in the US. It also shut down its online visa system for US citizens.

The Turkish president, Recep Tayyip Erdoğan, described the US decision to suspend visa services as upsetting. “For the embassy in Ankara to take such a decision and implement, it is upsetting,” he told a news conference during a visit to Ukraine.

The Turkish move has effectively closed its borders to American visitors residing in the US or elsewhere, unless they can obtain visas from diplomatic missions outside their home country.

A rift between Turkey and the west has broadened in the aftermath of last year’s coup attempt, divergence over the war in Syria, and a crackdown against alleged putsch collaborators.

The US government’s restrictions appeared to be linked to the arrest last week of a local consulate employee in Istanbul over alleged links to the movement of Fethullah Gülen. Gülen, an exiled preacher based in Pennsylvania, is widely believed in Turkey to have orchestrated last year’s coup attempt. Ankara has long demanded the cleric’s extradition.

The US embassy said it was “deeply disturbed” by the arrest, and said the allegations were “wholly without merit”.

Later on Monday, in another escalation, the Turkish foreign ministry said it had summoned the American charges d’affaires, and the Istanbul prosecutor’s office said it had ordered the questioning of another US consulate official as a suspect in an unidentified case.

The prosecutor’s office said it had detained the man’s wife and child.

The state-run Anadolu agency said foreign ministry officials had urged the diplomat to have the embassy reverse its decision to halt visa processing, saying it could lead to an “unnecessary escalation” of tensions.

The national carrier Turkish Airlines said it would offer refunds to passengers travelling between the US and Turkey until the end of October.

Washington once saw Turkey as key to battling Islamic State militants and other terror groups in Syria and Iraq, but relations between the two allies declined under Barack Obama.

Ankara objected to the former president’s lack of willingness to intervene forcefully in the war in Syria against the forces of Bashar al-Assad, as well as Washington’s support for Kurdish militias fighting against Isis in Syria. Turkey considers the People’s Protection Units (YPG) an affiliate of the Kurdistan Workers party (PKK), a separatist insurgency and designated terrorist group.

Turkey was also angered by how slow the US was to condemn last year’s coup attempt and unwillingness to extradite Gülen. Turkish security personnel were indicted this year for attacking demonstrators during a visit by Erdoğan to the US.

Observers had expected relations to improve under the administration of Donald Trump, who has long expressed admiration for Erdoğan, a strongman leader with a reputation in the west for not tolerating critics. However, a US initiative to directly arm the Kurdish militias fighting in Syria caused diplomatic relations to deteriorate further.

The Turkish lira plummeted to its lowest value in months over the latest crisis, which will limit the influx of tourists to the country after a slow recovery.

 Turkey urges U.S. to review visa suspension as lira, stocks tumble

October 8, 2017

by Tuvan Gumrukcu and Daren Butler


ANKARA (Reuters) – Turkey urged the United States on Monday to review its suspension of visa services after the arrest of a U.S. consulate employee sharply escalated tensions between the two NATO allies and drove Turkey’s currency and stocks lower.

Relations between Ankara and Washington have been plagued by disputes over U.S. support for Kurdish fighters in Syria, Turkey’s calls for the extradition of a U.S.-based cleric and the indictment of a Turkish former minister in a U.S. court.

But last week’s arrest of a Turkish employee of the U.S. consulate in Istanbul marked a fresh low. Turkey said the employee had links to U.S.-based Muslim cleric Fethullah Gulen, blamed by Ankara for a failed military coup in July 2016.

The U.S. embassy in Ankara condemned those charges as baseless and announced on Sunday night it was halting all non-immigrant visa services in Turkey while it reassessed Turkey’s commitment to the security of its missions and staff.

Within hours, Ankara announced it was taking the same measures against U.S. citizens seeking visas for Turkey.

On Monday the Turkish foreign ministry summoned a U.S. diplomat to urge the United States to lift the visa suspension, saying it was causing “unnecessary tensions”.

Justice Minister Abdulhamit Gul said that if Washington had serious security concerns about its missions in Turkey, steps would be taken to address them.

“But if it’s an issue regarding the arrest of the consulate employee, then this is a decision the Turkish judiciary has made,” Gul told A Haber television. “Trying a Turkish citizen for a crime committed in Turkey is our right.”

State-run Anadolu news agency said another U.S. consulate worker had been summoned to testify over his wife and daughter’s suspected links to Gulen – which it said had emerged during the questioning of Metin Topuz, the employee arrested last week.


The diplomatic spat spooked investors. The lira dropped 3.4 percent and stood at 3.7385 against the dollar after being quoted overnight as touching a level of 3.9223.

The main BIST 100 stock index fell as much as 4.7 percent, closing the day down 2.73 percent at 101,298 points.

Airline shares were particularly hard hit, with flag carrier Turkish Airlines falling 9 percent.

The central bank said it was following developments closely.

This looks like a really serious situation,” said Blue Bay Asset Management strategist Timothy Ash, adding that the central bank would need to move quickly to calm market nerves and possibly hike interest rates – something President Tayyip Erdogan has resisted.

Turkey’s leading business association, TUSIAD, warned that the dispute would harm bilateral economic, social and cultural ties, and called for disagreements to be settled calmly.

The dispute with the United States coincides with deep strains in Turkey’s relations with Germany, another key ally, and with Turkish military activity at the Syrian and Iraqi borders, though their market impact has so far been limited.

U.S.-Turkish tensions have risen in recent months over U.S. military support for Kurdish YPG fighters in Syria, considered by Ankara to be an extension of the banned PKK which has waged an insurgency for three decades in southeast Turkey.

Turkey has also pressed, so far in vain, for the United States to extradite Muslim cleric Fethullah Gulen, viewed in Ankara as the mastermind behind the failed coup in which more than 240 people were killed. Gulen denies any involvement.

Friction with the United States has also arisen from the indictment last month by a U.S. court of Turkey’s former economy minister Zafer Caglayan, charged with conspiring to violate U.S. sanctions on Iran.

Sinan Ulgen, an analyst and former Turkish diplomat, said those underlying disputes had created a crisis of confidence which made this latest fallout particularly bitter.

“This harshness is a result of a build-up,” he said. “We should not consider this as solely a reaction to the detentions of consulate employees”.

Additional reporting by Can Sezer in Istanbul and Gulsen Solaker in Ankara; Writing by Dominic Evans; Editing by Daren Butler and Gareth Jones


Exploring the ‘Bullshit Castle’: Airbus Corruption Scandal May Lead Straight to the Top

A potentially vast corruption scandal threatens to overrun Airbus, with a Paris-based sales group suspected of having paid bribes around the world. German CEO Tom Enders is leading the clean-up effort, but documents reveal that he might not be as spotless as he claims.

October 9, 2017


This is a story of a global company. About its secrets. It is the story of a corrupt corporation.

The company is called Airbus.

It is a story that begins with the word “shit,” with a Dacia Duster and with a tiny company that could cost the CEO of Airbus his job. Because he, too, apparently has a bit of a skeleton in his closet.

But first things first.

First, the word “shit”: It is June and top company managers have gathered for a meeting in Toulouse, France. CEO Tom Enders is standing on the stage. He has been with the company for 17 years, but his English is still less than fluent and he speaks with a heavy accent. But the message to his top managers is nevertheless crystal clear. “If there are still people in this room, that believe we should put the shit under the rug — then I would have to say, I give up on these people.”

Enders, 58, speaks of a past that Airbus has long sought to deny, years in which the company partly relied on bribes as it rose to become the world’s second-largest airplane manufacturer, after Boeing. And Enders speaks of a present in which all of that is beginning to come out — a situation that poses grave dangers to the company he runs.

At issue are potential multibillion-euro fines and multibillion-euro losses. Indeed, the very survival of Airbus, with its 134,000 employees and its annual turnover of 67 billion euros ($78.6 billion), could be at stake. Hence, the message from Enders to all those who haven’t yet got the message, to those who think they can just carry on as before, including the bribery: “Leave this company rather than make us take you out of the company. Because we’re in a dead serious situation, dear colleagues.”

Which brings us to the Dacia Duster. At the end of May 2017, in the Romanian city of Bacau, a man was finally able to fulfill his dream of buying a new car, having managed to save up enough money for a diesel vehicle from the affordable Dacia brand: a special edition Black Shadow Duster. To make the purchase, though, Constantin Ster had to take out a loan — and a quick glance in the commercial registry provides a clue as to why: Last year, his company only had 1,300 euros in turnover, and the company before that went belly up.

Straw Man

Ster is bankrupt and not exactly a big fish. Yet he is thought to have pocketed more than 5 million euros from the airplane manufacturer, which was still called EADS at the time. The money was allegedly in exchange for the procurement of orders. But Ster seemed bewildered when he was faced with such accusations from investigators. If he hadn’t received the money, then where did it end up, they asked? What role was played by Ster, owner of a 15,000-euro car bought on credit, the straw man of the corporation?

And now, to the small company: State prosecutors from Munich interrogated the Romanian man all the way back at the end of 2015 and they have interviewed many other witnesses since. The Bavarian investigators have been on the case for five years and are likely to hand down indictments in the coming months — against a whole list of former EADS executives and their henchmen.

They are suspected of having constructed a vast empire of corruption for the company — and in the center of it all stands Vector Aerospace in London, a two-person company that received 114 million euros from EADS. What did Vector do for all that money? Investigators have only been able to find records pertaining to 9 million euros. The rest was distributed to shell companies in places like Hong Kong, Singapore and the British Virgin Islands. It would seem to have disappeared.

Until recently, it had looked as though that network of shell companies only pertained to the sale of 18 Eurofighters to Austria, built by a consortium led by EADS. State prosecutors based in Munich wrote in a supporting document from December 2016 that “significant sums of money” from the Vector kitty were “to be used for bribery payments to decisionmakers … in Austria.” The bribes were to ensure that Vienna placed its warplane order with the Eurofighter consortium.

But apparently, that wasn’t all. Now, there are indications that the millions of euros that came from Vector and flowed via the Romanian man actually ended up in the passenger jet business. And that has led to suspicions that Vector actually served the entire company as a source of bribes. Vector, the Munich prosecutors wrote, was also responsible for “keeping concealed money available for future corruption needs” and to keep those funds “separate from EADS assets.” In other words, a slush fund “created intentionally by those involved,” and not just for the fighter plane order from Austria. It seems likely that the suspicions will end up in the formal indictment before long.

If all of the above is confirmed — and Airbus denies the accusations in this case — that would be bad enough for Tom Enders. It would, in fact, be “shit.” But even before the dubious company Vector was founded in London in 2004, there had been another company in Cyprus. It, too, is thought to have received a significant amount of money from EADS, apparently also to drum up business to boost the Austrian economy. That was the promise EADS made to Vienna in exchange for the Eurofighter order. And the predecessor company in Cyprus was also dubious. And who approved its founding according to the minutes of the relevant meeting? Tom Enders. And who received a long memo when Vector took over? Enders again. The same man who is currently posing as the anti-corruption superhero.

Parallels with Siemens

All of this adds up to a potential Siemens sequel for the German economy, one which has gone virtually unnoticed by the public at large. A new global bribery scandal, similar to the earthquake of corruption that rocked the Munich-based industrial giant in 2006, and continued for years afterward. In Britain and France, anti-corruption agencies are currently investigating Airbus, while Munich-based public prosecutors are doing the same in Germany together with their counterparts in Vienna. Airbus has submitted a voluntary disclosure in the UK. And suspicious cases have begun popping up around the world, including in Sri Lanka, Indonesia, China, Tunisia, Kazakhstan and Mali.

The parallels to the Siemens scandal are difficult to ignore. Both companies do business around the world, including in countries thought to be particularly corrupt, and both did business with fly-by-night companies and employed slippery consultants who received millions of dollars to set up business deals, likely by way of bribing politicians and officials. Both corporations likewise developed a company culture of acceptance for the practice, an understanding that things had always been done that way, that everyone else does it too, and that it is, in fact, the only way such a business can be run.

In one respect, though, the case of Airbus is even more explosive. After all, much of the company remains state-owned, with Germany and France together owning a 22 percent stake. That makes the case a political one — and one that could affect the relationship between the two countries. The government in Berlin is eyeing Airbus nervously as the German and French executives in the company attack one another and hate, anger and distrust run rampant. Who knew what, when? Who cast blame at who? Who must now pay? Who will have power in the company when it’s all over? The Germans? The French? The battle for truth has become a battle between two countries.

Internal investigators have discovered the possible payment of well over 100 bribes. And that is just the beginning. “The dimensions of the affair aren’t yet clear, but it is certainly vast,” says one insider. The “cancerous tumor” of which he speaks appears to have infected all of the company’s divisions. It’s not just about warplanes and passenger jets. “Unfortunately, we have found similar problems in the other divisions,” said John Harrison, the company’s group general counsel, at the meeting of top executives in Toulouse. There are good reasons to believe, he went on, “that the investigation goes wider to the other divisions, because we have business partners who worked for all the divisions.”

Enders has been left with little choice other than to make a clean break: He has frozen all suspicious contracts with external consultants who helped fill the order books for Airbus. He has sought the dissolution of a Paris-based sales division — which he refers to as a “Bullshit Castle” due to his belief that it is responsible for many of the dirty deals made with the help of such consultants. And he has fired people and brought in a law firm to look through files and hard drives. He even gave the lawyers his own laptop.

Recently, he also brought in Theo Waigel, the former German finance minister, as a consultant, a move to indicate how serious he is about getting to the bottom of the situation. Most of all, though, it was Enders’ voluntary disclosure in Britain that served as an invitation to state investigators. He is now posing as the kind of radical house cleaner that investigators like to see — as the one that has to remain standing even as others must be sacrificed to show the company’s determination.

The Ire of the French

Enders is playing the role of the disconcerted senior executive and claims he only realized what was going on in 2014 — and that he has been ruthlessly seeking to clean things up ever since. Doing so, however, doesn’t just risk the ire of the French, who view the step to strip power from the Paris sales division as a German attack on French interests.

More than anything, Enders is risking his job. Indeed, it is now coming out that the executive, known for his toughness (his nickname is “Major Tom”), apparently wasn’t interested in uncovering corruption at all for many years. Rather, he played down the problem. And he may even have been an accessory. That, at least, is one reading of the Munich investigation files that DER SPIEGEL and its French partner, the online magazine Mediapart, have obtained.

Back to the year 2000: When Germany, France and Spain created the EADS corporation to break the Americans’ air superiority, particularly that of Boeing, the French didn’t just contribute its defense giant Aérospatiale-Matra. A sales team was also part of the deal — a conspiratorial group that had learned a lesson that comes with selling warplanes: It doesn’t necessarily matter who builds the best planes.

The ‘Bullshit Castle’

In places where fighter jets are symbols of power, particularly in tin-pot dictatorships and banana republics, other rules apply. In those types of places, top military officers want their cut, as do the ministers and government officials involved in such purchases — people who feel their honor has been slighted if nobody tries to bribe them, because it means that they weren’t important enough.

EADS International, the sales division in Paris, whose name later changed to SMO, dealt with such customers. It was the “Bullshit Castle” that Enders talks about today. Most of those working there were the product of the French defense company Matra, but two Germans also belonged to the team: Klaus-Dieter Bergner, the former head of the East German airline Interflug, and Manfred Wolff, who worked for AEG in Asia before his division was bought by EADS. In describing what the business climate at EADS International does to newcomers, a person with knowledge of the company says: “If you put Mother Teresa in a neighborhood with rampant drug use, she wouldn’t remain a saint for long, either.”

Investigators in Munich and Vienna have become convinced that temptation and sin were everywhere to be found in EADS. They took a close look at the 2 billion-euro Eurofighter deal in Austria, the 2003 order for 18 fighter jets. For a long time, it looked as though the Eurofighter, built by a consortium led by EADS, didn’t have a chance against the Saab Gripen, a fighter jet built in Sweden. But EADS emerged victorious, nonetheless — against all odds and, as they say in Austria today, against all logic. In February, Austrian Defense Minister Hans Peter Doskozil finally took the step of filing suit against Airbus, accusing the company of willful deception and fraud. It was a suit that infuriated the company.

The extras that the Eurofighter consortium used to sweeten the deal for Austria came in the form of so-called “offset deals.” To get the contract, Eurofighter had to guarantee that it would ensure 4 billion euros worth of business for Austrian companies — deals that didn’t necessarily have to do with airplanes. The main thing is that they were good for the Austrian economy. If Eurofighter failed to live up to its end of the bargain, it was liable for a 200-million-euro penalty.

That’s where things got weird. At the end of 2004, EADS Germany, under the leadership of Tom Enders, took this risk off Eurofighter’s hands. In exchange, however, Eurofighter had to pay EADS Germany 183 million euros. Investigators, though, find it odd that, by the time the payment was made, offset deals worth 1.8 billion euros were already in the works, leading internal analysts to assume that the penalty in the Austrian deal would be 35 million euros at the most. That assumption is documented in EADS records that investigators presented to one of the defendants in the case. If that is true, they want to know, why would EADS take 183 million out of the Eurofighter consortium?

The answer leads to Paris — to the notorious sales division EADS International. The French division was initially supposed to keep out of the Eurofighter deal with Austria, but the Germans asked for its help — and Paris didn’t leave them hanging. Klaus-Dieter Bergner and Manfred Wolff became involved to help with the offset deals in Austria, two Germans who had learned how to do things the French way

It was Wolff who ultimately negotiated with the Eurofighter consortium on behalf of EADS Germany to take over responsibility for the offset deals. Bergner, meanwhile, took care of the deals themselves. To do so, he established a company in Vienna called Euro Business Development (EBD). And it was, in fact, able to generate contracts for Austrian companies – just as the Eurofighter consortium had done before responsibility for the offset deals was transferred to EADS Germany. So far, so good.

Payment of Bribes

But Bergner and his Paris-based team didn’t just come up with the idea of establishing EBD in Austria. They also decided to set up a second company, the dubious London-based firm known as Vector. EADS Germany had hardly taken over the offset deals and received the 183-million-euro payment before it transferred the task — and the vast majority of the money — on to Vector. The company claims that it secured deals for Austria and was paid a commission of 114 million euros from EADS for doing so. But state prosecutors believe that Vector had almost nothing to do with the offset deals and that the money was needed for something else, including the payment of bribes.

Airbus has a different version of events, and as much as CEO Enders complains about the “shit” in general that should no longer be swept under the rug, he doesn’t see anything wrong with Vector at all. “Neither the years of investigations by public prosecutors in Munich and Vienna nor our own extensive investigations have produced indications of bribery in connection with the sale of Eurofighter planes to Austria,” reads a statement provided by the company to DER SPIEGEL. The same applies to slush funds, the statement makes clear. Nothing, it is alleged, has been proven and Vector did what it was founded to do: which is to produce offset deals. And Enders definitely didn’t know about any potentially illegal activities. The company speaks of “character assassination.”

But the founding of Vector is well documented, it is an episode that continues to bedevil Enders to the present day. Furthermore, it has been alleged that Vector wasn’t the first dubious company charged with producing offset deals. In early 2004, a company for the purpose, called Omesco, was established in Cyprus. It was owned by Manfred Wolff, the German sales expert who was to exchange his job with EADS for a job at Omesco. The idea for this Cyprus-based company came from the “Bullshit Castle” in Paris.

But if the Eurofighter consortium had been successful in producing offset deals, what was the purpose of setting up the company? Why Cyprus? Externally, the company was supposed to look like an independent entity, but in truth, EADS Germany ensured that it would always have the last word.

It stank. Other Eurofighter partners, like the Italians and the British, were against it because it gave the Germans too much influence. But it didn’t stink to Tom Enders. He was supportive of the Cyprus model. In fact, he was the one who pushed it through. In a May 2004 meeting about Omesco, a senior EADS executive said: “Dr. Enders again approves” of commissioning Omesco with setting up offset deals. The exchange is documented in minutes from the meeting.

A short time later, the company dropped the Cyprus idea. But instead, the company founded Vector in London. The name was different, but the pattern was the same — only with an Italian at the helm instead of Wolff.

‘Appropriate Financial Means’

Airbus CEO Tom Enders also knew of Vector. In December 2004, he received a “strictly confidential” memo directly from the “Bullshit Castle” in Paris. Officially, the office may have had nothing to do with the Austrian deal, but at the Germans’ request, the French did review the Vector construct. After all, people were always happy to help. The memo to Enders states that EADS International recommends that offset deals be transferred to third parties “including Vector.” EADS Germany, the memo recommended, should provide Vector with the “appropriate financial means.”

But was that really all that Enders knew? Did he not also know that money at Vector would be disappear — possibly as part of long-laid plans — in the form of bribes paid around the world.

If not, then he at least should have recognized how much “bullshit” could be found in this model. At the time, London was considered something of an insider tip, a place where investigators didn’t tend to scratch too far beneath the surface. At one point, the memo notes that Vector had been set up in London for “reasons of confidentiality” in order to protect the “name of Vector’s ultimate beneficiaries,” two weapons dealers in Austria. Today, Airbus claims that “Vector wasn’t headquartered in London for confidentiality, but rather for tax reasons.”

In one part of the Paris memo, it states that although EADS Germany did receive 183 million euros from the Eurofighter consortium, that sum may not be sufficient. Sufficient for what, though? It was surely enough to cover the offset deals in Austria; at the time, the presumed penalty was far lower. Was it for other debts the company had to pay? For bribes? Airbus claims nothing has been proven. The Paris-based sales division may have developed all manner of constructs for the payment of bribes, but Vector, the company insists, wasn’t one of them.

The path back to Romania, to Bacau and Constantin Ster, leads through a four-story apartment block with graffiti on the door. The walls used to be yellow. Two-and-a-half years ago, Ster purchased an apartment here for 30,000 euros that was partly financed through a government loan program for first-time homebuyers. A train depot is located in the industrial area next door. It’s not the kind of place where people with money tend to live.

Ster is a bookkeeper at a high school. “I’m an honest, friendly man with a big heart. I like talking with people from all over the world,” he wrote of himself on the internet. But when you get him on the phone, he quickly loses interest. He says he has already told public prosecutors everything and he’d rather not talk to journalists. But there is a lot that he could talk about. The time he spent in the United Arab Emirates, for example, and about Manfred Wolff, the German man he got to know there.

From 1997 to 2009, Ster lived in the Gulf region. He worked at a school and became acquainted with a nephew of the leader ultimately growing close to the family, he told investigators. That apparently made him a person of interest for the man from the EADS sales team. At the time, Ster says, the sales team member had wanted to sell Airbus passenger jets in the emirate. “So far as I understood it, Airbus was in competition with Boeing and he was interested in closing the contract.” The Romanian says he brought Wolff together with the decision-makers on the order. In exchange, Ster says he received $40,000 from Wolff — a claim that Wolff denied in his own questioning. He also disputed the claim that he ever even wanted to sell passenger jets.

Purely a Façade

The documents that investigators have in their possession feature much larger figures. And they focus on Vector, which had only recently been established at the time. On April 18, 2005, Vector wired 2 million euros to Ster in Abu Dhabi, part of a sum that would ultimately swell to 5 million — ostensibly because Ster had attracted several offset deals for the Eurofighter deal in faraway Austria. But it was nonsense. The deals existed, but Ster had nothing to do with them — and neither did Vector. The whole thing was purely a façade obscuring something altogether different behind it.

Before the remaining millions got to Ster, someone at either Vector or EADS suddenly had worries that wiring the money directly to the Romanian might prove too risky. So, the money went back to Vector and a new invoice was created a few days later. Now everything had been well-camouflaged. The invoice was no longer sent to Vector, but rather to the Isle of Man, a tax haven, addressed to an offshore company called Columbus. That company then paid 5 million to a company belonging to the Romanian and got its money back from Vector. Manfred Wolff had orchestrated the deal.

Ster claims no knowledge of any of this. And Columbus? He says he has also never heard of it. Five million to one of his company accounts? Never happened.

Considering the documents, it sounds like an excuse. But it doesn’t necessarily have to be one. In England, recently, a tax consultant was left scratching his head over something that had his name on it, but that he guarantees he never signed. His name is even wrong in the paper alleged to have originated from him. And in another, the English was so bad that it made the Brit shudder. The phrase “heavy discussions” appears — a locution that couldn’t have come from him, the man said in questioning.

He said he had innocently set up an offshore firm for a customer and had signed a contract in Paris with EADS a short time later. Wolff and Bergner were present. Later, a million euros flowed from EADS via the offshore company to the client, who had good connections in Austria.

Both cases, the one in Romania and the one in England, seem to suggest that Manfred Wolff and co-workers in the Paris sales office may have stolen identities in order to make bribe payments — for the Eurofighter fighter jets in Austria and for the sales of Airbus aircraft in the Emirates. Citing the ongoing investigation, Wolff refused to answer questions from DER SPIEGEL as did Bergner.

It’s possible that things could have continued at Vector were it not for the fact that EADS had some bad luck. The Italian at the head of the company, Gianfranco Lande, also conducted a few other deals on the side as a financial adviser to the higher echelons of Romanian society and to other honorable company, such as the ‘Ndrangheta in Calabria. Lande speculated, constructed a pyramid scheme, burned through just under a quarter-million euro and landed in jail in 2011. In prison, he preferred not to say anything about the mafia, but he was prepared to talk about EADS. He said he had run Vector for Bergner and Wolff. For EADS. To take care of dirty deals. That is, until 2008, when he got sacked.

An Epic Battle

EADS could have started cleaning things up at the point that Lande began talking. But it instead reverted to the kind of typical response that the public has come to expect: a gentle investigative report by a law firm that reads just as it was ordered. There were also calming words from Tom Enders, who in 2013 complained to the German financial daily Handelsblatt of a “criminalization and prejudgment” of his company. It was the usual, as previously seen at Siemens — talk everything down, just don’t do anything to jeopardize business.

The line taken by EADS in its effort to exonerate itself was that people like Lande, a fraud who had in fact embezzled 34 million from Vector, had stolen from the company. That is where the money had gone, into the pockets of corrupt executives. The company itself, EADS claimed, was clean — the victim rather than the perpetrator.

As had been the case in the Siemens scandal, it was likely the government investigators who finally got things moving at Airbus.

The Airbus version of the story is a very different one. It is featured in an internal paper in which Enders is depicted as some sort of titan in an epic battle. On his side are Chief Financial Officer Harald Wilhelm and General Counsel John Harrison. They are pitted against the dark powers of EADS International in Paris, central sales, which was renamed to SMO in 2007.

As early as the beginning of 2014, after the renaming of the company from EADS to Airbus Group, CFO Wilhelm began wondering about some odd payments. He looked into it, which prompted some squirming in the Paris division. He says he wanted to conduct stricter monitoring of deals, and that the Paris division began circumventing him. He also says that alleged Airbus consultants suddenly turned up and began demanding millions. That is why, he says, Enders then took the tough measures of freezing payments to consultants, stripping SMO of responsibility for all foreign business deals and dissolving the division in 2016. Ultimately, he says, they discovered that SMO had provided false data about consultants and their fees in export documents. This realization was followed by a notification to British export authorities and then the voluntary disclosure to corruption investigators at Britain’s Serious Fraud Office. German and French offices for state export guarantees also received mail from Airbus — an admission that not all of the data that had been provided previously was correct.

But in this heroic story, Enders’ staff seems to have forgotten the role that the boss himself appears to have played at Vector. And they appear to have forgotten one of the primary motivators for the anti-corruption push: outside pressure in the form of external investigations. Even if Airbus itself claims that it would have ultimately cleaned things up even without the authorities breathing down their necks.

The Airbus people had already been in the Serious Fraud Office’s crosshairs in a separate case. In 2012, the agency had gone after Britain’s Rolls-Royce, which also supplies engines for Airbus aircraft. It ultimately wound up being the biggest corruption case in the agency’s history. Investigators presented a report that listed all the bribe payments that had been made in more than a dozen countries since 1989. Rolls-Royce was ordered to pay an $800-million fine.

The Same Intermediary

And what did Airbus have to do with it? In Indonesia, Rolls-Royce is alleged years ago to have paid millions via an intermediary to a company for whom a relative of the country’s then-president worked. Airbus used the same intermediary. If bribes had to be paid for the engines acquired by national airline Garuda, then it seems reasonable to suspect that things weren’t any different when it came to aircraft. The Indonesian case is thought to be at the center of the voluntary disclosure made by Airbus to the British, who have been investigating fraud, bribery and corruption allegations since 2016.

The way Enders is now pushing everything forward — possibly even to the point of his own downfall — is less of an epic tale than a race report: Who will get to the bottom of things faster? Government prosecutors or the company itself? Enders will gain points with everything that he uncovers himself. Everything the investigators dig up first and accuse him of, however, will count against him.

It’s a race that leads around the world. To places like Sri Lanka, where an investigation is currently being conducted into executives at the national airline SriLankan. The country’s prime minister believes there were massive irregularities surrounding the purchase of 10 Airbus aircraft in 2013. Or in Mauritius, which bought six passenger jets. Here, the former head of government is believed to have been bribed. Or Tunisia, which bought 16 jets. It’s suspected that 70 million euros went to a son-in-law of former President Ben Ali. Public prosecutors in France and Tunisia are investigating. Or in Kazakhstan, where there were apparently bribes in the sale of 45 helicopters. Or China: In 2013, an earlier agent for the company in China, a Turk, demanded a 700-million-euro commission for the sales of 160 Airbus aircraft worth $10 billion. The sum, 700 million, was so enormous that Airbus allowed the dispute to escalate, but the company ultimately had to conclude that the Paris sales division had made previously unknown commitments to the man. The company has since settled with the Turkish national. But it remains unclear whether everything was on the up-and-up. In Mali, the company even purchased shares in a goldmine. With the exception of the cases involving Vector and Austria, Airbus would not comment on any ongoing proceedings.

General Counsel Harrison is now the most important person in CEO Enders’ sphere. Head of both his defense and offense, all in one person. Harrison will have to defend the company against investigators, but he will also have to go on the attack inside Airbus, going after the old clans and old boy networks and the culture of unscrupulousness.

“I call it the red-face-test,” he said in Toulouse during the meeting of top executives. “If a structure or something you’re doing is on the front page of the Financial Times tomorrow morning, would you have a red face? It’s got to be in your DNA, to want to do that test.” The applause test at the end of his speech in the auditorium is indicative of how it was received: a tepid three seconds, no more.

Harrison is an Englishman. The voluntary disclosure he made was essentially a formal invitation to the investigators, and now he is hoping for a settlement. The idea is to put everything on the table and to then reach a deal with the authorities, as is customary in Anglo-American legal culture. But if Airbus engages in deals that fall “into the gray zone” before that settlement is reached, he has warned, then “we’re dead.”

A French insider with detailed knowledge of the situation believes that Enders and Harrison have badly miscalculated and have lost control of the situation since the voluntary disclosure. Because of the false data provided in export documents, Airbus is no longer able to obtain export guarantees in Britain, France or Germany. Airbus could also be placed on blacklists in many countries, meaning the company would no longer be able to bid on public tenders there. This could potentially result in billions in lost revenues. Archrival Boeing is waiting in the wings to fill the void left by Airbus, especially in the United States.

Lurking in the Books

The insider says the settlement that will ultimately be demanded by European authorities remains entirely incalculable. Even Enders’ own team is nowhere close to being able to determine everything that happened in the past and what shady deals might still be lurking in the books.

If one believes the French insider, who does not want to be cited by name, the risks for Enders himself are also no longer calculable. Because the situation wasn’t black and white, good or bad, or even German against French. “There was no state within a state here,” the former senior executive from Paris said. When it came to bribes, the former executive said, the Germans and the French worked well together. The source said that a dual-control principle had applied evenly to all the dubious contracts, and that these controls allegedly included the colleagues in the EADS finance department in Ottobrunn, Germany — even after current CFO Wilhelm took charge. But one source close to Enders disputes this account, saying that SMO in France had its own financial experts. The Paris division, he says, was impenetrable to EADS Germany.

Yet it was Enders himself who allowed the consultant contracts for the passenger aircraft division he had just taken over to be issued through SMO. By doing so, it would seem that he had strengthened the dubious unit at the time.

But those close to Enders say that he hadn’t yet been aware of what was happening in Paris.

However, one of the French sources who knew the Paris unit well, disputes those accounts, saying that Enders had been informed of all major deals. Of course, there had always been countries where bribe money was necessary for deals to proceed. That had been clear to everyone, the source said. From the perspective of the French insider, the biggest sin committed by the Paris-based SMO was that it was located in France and that most staff were French. The source claims the Germans close to Enders are now merely seeking to cast blame on the French.

Regardless which account is correct, the atmosphere is so volatile that Enders has already forewarned the German Economics Ministry. Officials at the ministry did not provide a statement in response to a DER SPIEGEL query. Nobody, it seems, is willing to provide anything that could spark an explosion.

‘Kangaroo Court’

Those sparks, however, could now come from the old Vector story. After all, it was chief company investigator Harrison who insisted in 2007 that Airbus advisers adhere strictly to their nondisclosure agreements with the company in order to prevent them from being able to testify before an investigative committee in the Austrian parliament, one that he disparaged as a “kangaroo court.”

“It is risky to have our consultants confronted with detailed questions that may be used later against us in court proceedings,” he said.

And Enders? At the time he was the boss who either knew too much about Vector and its predecessor firm Omesco — or didn’t dig deep enough to find out more. A boss who was either privy to what was happening — or completely clueless. If he was the latter, though, then he didn’t have the company he ran under control.

The blueprint for Vector came from France. If Enders were to now fall as a result of Vector, it would be the perfect revenge for the angry French.

By Rafael Buschmann, Jürgen Dahlkamp, Dinah Deckstein, Gunther Latsch, Catalin Prisacariu, Jörg Schmitt and Gerald Traufetter


Conspiracy versus Reality

October 9, 2017

by Christian Jürs

On July 17, 1996, TWA Flight 800, a Boeing 747-131 registered as N93119, took off from John F. Kennedy International Airport (New York) enroute to Charles De Gaulle International Airport (Paris).

The aircraft was flying more than eight miles off the cost of East Moriches, New York (part of Long Island) when the fuel tank exploded. The aircraft banked and the front part of the aircraft broke off. The wind pushed the aircraft into a climb. Then, the aircraft went into a dive, causing the wings to break off the aircraft. Pieces of the aircraft plummeted down into the Atlantic Ocean, killing all 230 passengers on board.

After what has been billed as the longest and most expensive accident investigation in American aviation history, the U.S. National Transportation Safety Board  (NTSB) investigation found that the flammable fuel/air mixture of the center wing fuel tank probably ignited due to electrical failure in the center fuel tank, causing the plane to explode in flight. The FBI agreed that there had been no criminal act after examining all the plane’s wreckage that had been recovered. In May of 1997, mechanics discovered a fuel leak in a Boeing 737-200 that they believed was caused by the kind of electrical arcing suspected of causing the TWA Flight 800 fatal explosion. NTSB investigators believed that the same kind of arcing from the wiring in the center fuel tank of TWA Flight 800 sparked the explosion that brought the plane down. As a result of extensive and very through testing, the NTSB issued an “airworthiness directive” requiring the immediate inspection of the wiring of older 747s. In April, it recommended further inspections and design changes in the wiring of 747s and in Boeing 707s and C-130 transport planes, as well.

Eight years after the crash, in February 2004, the FAA indicated that it would start the process of ordering airlines to install a fuel tank inerting system in most of their aircraft. It was stated that the order would probably actually be issued within two years, and then the airlines would be required to install the devices over the subsequent seven years. The FAA stated that, including the TWA Flight 800 crash, there had been three fuel tank explosions in airliners over the previous 14 years (the two others having occurred on the ground),

Various groups and individuals continue to maintain that the plane was downed by a bomb or missile, and that there was a subsequent cover-up to disguise the real cause of the crash.

The “terrorist theory” was, as usual, one of the first to be mentioned, especially due to the fact that the accident happened during the Summer Olympic Games in Atlanta, where a bomb exploded ten days later. In the aftermath of the September 11, 2001 Terrorist Attacks, these alternate explanations have been revisited, as some officials and commentators have mentioned this disaster among lists of terrorist attacks. Cmdr. William S. Donaldson, a retired Naval officer who conducted an independent investigation, disagrees with the official theory. According to Commander Donaldson, “jet airliners built by the American aerospace industry have logged at least 150 thousand years of flight time. Not once has there ever been a spontaneous fuel tank explosion on any fuel tank while airborne” (Letter to NTSB 11-14-97).

Donaldson concluded that the airplane was “shot down by missiles.” He interviewed hundreds of witnesses and said he reconstructed the flight paths of these missiles by triangulating the eyewitness accounts. Soon after, a photo that a passenger of a North American Airlines plane arriving at JFK supposedly took, seemed to support the missile theory because the “photo” showed a “missile” missing the NA Airlines jet narrowly.

Pierre Salinger, a former White House press secretary to President John F. Kennedy and ABC News journalist, prominently and repeatedly claimed he had proof that the flight was downed by a missile from a U.S. Navy ship. The documents on which he relied were later found to be vague rumors that had been distributed over Usenet, with attributions only to many “unnamed experts”. Some people briefly gave the name of Pierre Salinger Syndrome to the tendency to believe things that one reads on the bloggers of the Internet.



From the FAS Project on Government Secrecy

Volume 2017, Issue No. 71

October 9, 2017


Other nations, including current and potential adversaries, possess military capabilities that now match or exceed those of the United States, according to a new US Army doctrinal publication.

“Today’s operational environment presents threats to the Army and joint force that are significantly more dangerous in terms of capability and magnitude than those we faced in Iraq and Afghanistan. Major regional powers like Russia, China, Iran, and North Korea are actively seeking to gain strategic positional advantage. These nations, and other adversaries, are fielding capabilities to deny long-held U.S. freedom of action in the air, land, maritime, space, and cyberspace domains and reduce U.S. influence in critical areas of the world.”

“In some contexts they already have overmatch or parity, a challenge the joint force has not faced in twenty-five years.”

That assessment appears in the Foreword to the newly updated US Army Field Manual 3.0 on Operations that was officially released today.

The Field Manual describes the conduct of operations in the new environment, with notably new material on the cyber and space domains.

“Threat operations [by adversaries] in cyberspace are often less encumbered by treaty, law, and policy restrictions than those imposed on U.S. forces, which may allow adversaries or enemies an initial advantage,” the manual states.

The unclassified field manual was released along with two supporting volumes:

ADP 3-0. Operations, Army Doctrine Publication, October 2017, and

ADRP 3-0. Operations, Army Doctrine Reference Publication, October 2017

Last week, Secretary of Defense James Mattis issued a memorandum to all military personnel and DoD employees warning against leaks of classified or otherwise restricted defense information.

“It is a violation of our oath to divulge, in any fashion, non-public DoD information, classified or unclassified, to anyone without the required security clearance as well as a specific need to know in performance of their duties,” he wrote. A copy of the memo was obtained by Military Times. (A security clearance is not required for unclassified information.)

Yet also last week, Secretary Mattis himself disclosed new information that about US rules of engagement that is normally not published, the New York Times reported. A Pentagon spokesman denied that the disclosure would place US forces at risk, or help the enemy. See “Mattis Discloses Part of Afghanistan Battle Plan, but It Hasn’t Yet Been Carried Out” by Thomas Gibbons-Neff, October 6.


New and updated reports from the Congressional Research Service include the following.

President Trump’s Proclamation on Enhanced Vetting of Foreign Nationals from Designated Countries, CRS Insight, September 29, 2017

Diversity, Inclusion, and Equal Opportunity in the Armed Services: Background and Issues for Congress, updated October 4, 2017

Navy Irregular Warfare and Counterterrorism Operations: Background and Issues for Congress, updated October 2, 2017

Iran: Politics, Human Rights, and U.S. Policy, updated October 3, 2017

Bahrain: Reform, Security, and U.S. Policy, updated September 29, 2017

Department of State, Foreign Operations, and Related Programs: FY2018 Budget and Appropriations, updated October 3, 2017

U.S. Role in the World: Background and Issues for Congress, updated October 3, 2017

The United Nations Human Rights Council: Issues for Congress, updated September 27, 2017

Libya: Transition and U.S. Policy, updated October 2, 2017

Navy Virginia (SSN-774) Class Attack Submarine Procurement: Background and Issues for Congress, updated October 4, 2017

Navy Columbia (SSBN-826) Class Ballistic Missile Submarine Program: Background and Issues for Congress, updated October 4, 2017

Navy DDG-51 and DDG-1000 Destroyer Programs: Background and Issues for Congress, updated October 3, 2017

Navy Littoral Combat Ship (LCS) Program: Background and Issues for Congress, updated October 3, 2017

The Blue Slip Process for U.S. Circuit and District Court Nominations: Frequently Asked Questions, October 2, 2017

U.S. Farm Income Outlook for 2017, October 4, 2017

Department of the Interior Secretarial Order 3356, CRS Insight, October 4, 2017

Abortion: Judicial History and Legislative Response, updated September 29, 2017

Economic Impact of Hurricanes Harvey and Irma, CRS Insight, October 2, 2017

Ethics Pledges and Other Executive Branch Appointee Restrictions Since 1993: Historical Perspective, Current Practices, and Options for Change, September 29, 2017




No responses yet

Leave a Reply