GENERAL DYNAMICS EUROPE

INDUSTRY

Aerospace / Defense / Security

CORPORATE HEADQUARTERS

Vienna, Austria

SUMMARY OF ALLEGATIONS

Nationality of Foreign Officials: Czech Republic

Summary of Allegations:

Marek Dalik, a lobbyist and adviser to former Czech Prime Minister Mirek Topolanek, allegedly asked for EUR 18 million (USD 26 million) in bribes linked to an army procurement deal of Austrian-made Pandur armored personnel carriers (APCs) manufactured by Steyr, the Austrian branch of General Dynamics. Based on testimony from Stephan Szcuecs, a former Steyr employee, who said Dalik asked him for a bribe, Dalik allegedly requested the bribe at a casual meeting at the U Maliru restaurant in Prague in November 2007 allegedly arranged by then deputy Martin Bartak. At the meeting Dalik allegedly feigned close ties with government officials and offered to influence the purchase of the APCs.

The procurement deal, worth CZK 20.8 billion (USD 1.1 billion), was originally approved by the left-wing government of Jiri Paroubek before the general elections in 2006. The government bought 199 APCs plus an option for an additional 35 APCs for CZK 20 billion. The left-wing government then lost the general election and the opposition, led by a center-right party called ODS, formed a new cabinet. By the end of 2007, the new government cancelled the deal, indicating that Steyr had violated the conditions of the purchase and withdrew from the deal. In 2008, the government renegotiated the deal with Steyr for 107 APC for CZK 14.4 billion. The price per unit thus went up 33% in CZK.


Approximate Alleged Payments to Foreign Officials: Unspecified

Business Advantage Allegedly Obtained: Contract for the supply of APCs to the Czech military

ENFORCEMENT RESULTS

Agencies: Austria: Vienna Prosecution Office
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

According to press reports, Austrian authorities are investigating the matter.



Agencies: Czech Republic: Anti-Corruption Police
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:

In February 2010, Czech authorities began an investigation into the allegations.  


The investigations are ongoing; however, the head of the Czech Police stated at the outset that he does not believe the investigation could be successful because the alleged improper payments occurred "so long ago."



Agencies: Czech Republic: Anti-Corruption Police
Results: Conviction, Prosecution of Public Officials
Year Resolved: 2016
Compliance Monitor:
Ongoing: No
Details:

In February 2010, Czech authorities began an investigation into the allegations.  

On 2 February 2016, Prague's Municipal Court ruled that that Marek Dalik asked for 18 million euros in bribes in November 2007 in connection with a CZK 14.4 billion (USD 580 million) army purchase of armored carriers made by Steyr.  Dalike was sentenced to five years in prison and fined CZK 5 million (approximately USD 204,829).  On the same day, Dalik appealed the ruling.



ENTITIES/INDIVIDUALS INVOLVED

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