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The Patria case has been the political controversy surrounding claims by prosecutors in Slovenia and Austria of bribery of Slovenian officials by the Finnish company Patria to help clinch an armoured personnel carrier order. There is currently a criminal investigation underway, and two employees of Patria have been arrested on charges of bribery. The CEO stepped down from his position as a result of the affair and is being investigated by the Finnish police on charges of bribery. In early September 2008, just three weeks before the Slovenian parliamentary elections on 21 September 2008, the Finnish broadcasting company YLE published an investigation implicating the corruption of the Slovenian Prime Minister Janez Janša.
Janša, who ignored and attacked also the other report about him published in 2013 by the official Commission for the Prevention of Corruption of the Republic of Slovenia, rejected all accusations and called for the journalists to advance some proof for their claims or to withdraw the accusations. On 11 September 2011, the Slovenian national broadcaster RTV Slovenia published a document disproving the claim about Janez Janša being implicated in the corruption and implicating Bartol Jerković, the director of the Croatian heavy industrial company Đuro Đaković Specijalna vozila.
- 1 Background
- 2 Alleged scheme
- 3 Response from Janša and the Slovenian government
- 4 Finnish government position
- 5 Police investigation and Trial
- 6 European Union Art. 346 and Arms Trade
- 7 See also
- 8 References
- 9 External links
The Patria case has a European and NATO horizon, and it cannot be understood outside this horizon. First, the rush to modernize the infantry armored vehicles for most Western armies since 2002. Second, the consolidation of the European armored vehicles suppliers through General Dynamics acquisitions. Third, the commercial war between General Dynamics and Patria in this field. Last, the peculiar status of arms deals that implies state secret protection on arms trade and on their collateral agreements. However, the abuse of secrecy to conceal unlawful practices such as fake offset agreement, (equivalent to bribery) is not a Slovenian issue, but a real European problem. The Patria case is a chance to look at what happens in the most politically sensitive and covered areas of Western democracies: arms and state security.
Modernization of infantry vehicles
The historic decision of the U.S. Administration to move the conflict against terrorisms outside United States at the end of 2001 led to the invasion of Afghanistan and Iraq. It is a radical change: U.S. had not deployed large infantry on hostile grounds since 1983. The decision had implications for U.S. allies. Ground troops need modern types of equipment to fight new infantry wars. Modern armored vehicles become a priority: more protected, faster, easily deployable, interconnected with the new digital wars. New vehicles must be capable to inter-operate at several communication levels.
Air superiority was no longer the decisive issue. The capability to control the ground became paramount. The human cost of the new occupation wars is mainly due to infantry lack of adequate protection. More than half of the deaths of U.S. and allies is caused by inadequate armoured protection.
Industry consolidation: Light Armored Vehicles
General Dynamics is the U.S leader in infantry vehicles, for the so-called mechanized infantry. General Dynamics quickly detected a growth opportunity in the NATO and European Armored Vehicles market. After 2002 General Dynamics planned a profitable campaign of acquisitions of smaller European defense companies. Between 2002 and 2003 General Dynamics bought everything it could. MOWAG in Switzerland, Steyer-Daimler-Puch Speazialfahrung in Austria, Santa Barbara in Spain. Then General Dynamics tried also a big shot: in 2004 launched a hostile takeover of U.K Alvis plc, but BAE reacted, and kept Alvis under British control, later renamed BAE Systems Land and Armaments.
In just five years General Dynamics shares grew from about $30 to $90. The turnover of the company climbed from $13 billion in 2002 to $32 billions in 2009.
European war between General Dynamics and Patria
Major European nations such as France, the UK, Germany, Italy initiated own domestic programs replacing old generation APCs with modern Armored Vehicles. Smaller nations on the other hand initiated process of international tender and procurement for new advanced armored personal carriers. Portugal, initiated the procurement process right away.¨.
Patria and General Dynamics engaged in a competition to win over new defence contracts, notably Belgium, Portugal, where Patria was overpowered by General Dynamics persuasive influence. Patria was astonished when it was excluded from the final round in Portugal and Belgium. Patria is a small national company that produces one of the most competitive Armored Vehicles on the market. Patria's turnover in 2005 was about 300 million Euros and in 2009 reached 500 million Euro. The commercial between Patria and General Dynamics would be akin to fight between David vs. Goliath, as the later is 40 times the size of Finnish Patria.
In 2003 Patria and General Dynamics are competitors for the new Portuguese armoured vehicles. General Dynamics won the contract with the Pandur, in competition with itself, that is General Dynamics Piranha; Patria, the third competitor, was disqualified on technical reasons at the end of 2004. Patria naively appealed against the decision, and Lisbon court dismissed Patria appeal in less than 40 days (by February 2005), so Portugal could pay 365 million Euro in exchange for 260 Pandurs and 516 million (150% of the contract value) of General Dynamics offset.
Then in the Belgian tender in 2006 the finalists are: GD-Steyr Pandur, GD-MOWAG Piranha, Iveco Centauro, and Patria AMV. Patria lost, and General Dynamicswon: about 700 million Euro for 242 General Dynamics Piranha and 700 million of GD offset, accurately divided between Flanders and Walloonia (delivery between 2007-2012).
Then Czech Republic. Defense Daily writes in Dec 2005: "As fate would have it, Steyr’s Pandur II (General Dynamics) and Patria’s AMV were the final two contenders for the Czech Republic’s $1 billion wheeled APC contract." Patria won, then the contract goes back to General Dynamics, Pandur.
Similar stories for Romania, Ireland, Denmark, Lithuania, Sweden, Spain etc. But General Dynamics has its most conspicuous sales outside of Europe: about $ 6 billions of Light Armored Vehicles to Saudi Arabia National Guard, via Foreign Military Sales.
Patria had some victories against the U.S. giant: Croatia, Slovenia, Poland, Estonia. And most notably, United Arab Emirates. In 2009 Sweden canceled a contract award to Patria of $338 million for 113 Patria AMV, but restarted the contract in 2010.
Purchase of Patria AMV
In December 2006 Slovenia purchased 135 Patria AMV infantry fighting vehicles. It is the largest defense acquisition in Slovenian history of military procurement. Participants to the bid included Patria with Patria AMV and a Slovenian subsidiary of General Dynamics, Sistemska Tehnika with Valuk. The government chose the former.
On 1 September 2008, the YLE's investigative program MOT stated that Patria paid 21 million euros in bribes for deals for Patria AMV IFVs for the Slovenian military. The money was said to be channelled to officials in the country's Ministry of Defence, as well as the Prime Minister Janez Janša. The program covered the ongoing criminal investigation of bribery and gross bribery by Patria officers in Egypt, Slovenia and Croatia. The accusations were said to be based on undisclosed documents which mention the initial letter J., interpreted to mean the premier Janez Janša. According to MOT, the documents were verified from multiple reliable sources. These documents were said to be published when the police investigation is completed and the case is presented to the district court. The police estimates that the investigation should be completed by the end of 2008. Furthermore, former president of the Commission for the Prevention of Corruption of the Republic of Slovenia, described the bribery as "very hard to deny" in the MOT program and stated people from the government were implicated. Later he said he was only making logical conclusions and has no proof for his claims.
According to MOT, 21 million euros, out of the 278 million total in the deal, was paid in bribes. The transfer was concealed by delivering fewer vehicles and less expensive armaments and extensions than officially announced. Money was channeled to a company held by Patria's Austrian agent, Wolfgang Riedl. Riedl would then forward the money to agents, each distributing the bribes to different groups. Businessman Walter Wolf would interact with Slovenian politicians and painter Jure Cekuta with officials at the Slovenian Ministry of Defence. Riedl transferred 2.8 million to businessman Walter Wolf, but Wolf's attempt to forward the money was stopped by his bank, which informed the Austrian money laundering unit.
Response from Janša and the Slovenian government
Janša rejected all accusations, and called for the journalists to advance some proof for their claims or to withdraw the accusations. In the case they would do neither, insisting on the accusations without showing the proof, he announced to bring legal action against the journalists. The following day, the Slovenian Government decided to sue the journalists and the broadcasting company for false accusation. The Ministry of Foreign Affairs left two diplomatic notes to the Finnish Government, calling the country enable the disclosure of the documents relative to the investigation in order to bring light in the issue. On September 6 Slovenian Government communication office asked YLE director Mikael Jungner to air a "second part" of the broadcast, including the viewpoints from other people involved and effectively negating the claims made in the program. This request was declined. In a parliamentary hearing on 9 September 2008, Janša urged the members of parliament to forget the issue for now and bring it back to discussion once some proof has been advanced.
There is a clause in the deal that allows its cancellation in the case of corruption. On 5 August 2008, Patria provided the Slovenian government with an account of the criminal investigation, where Patria declared in writing that no unlawfulness has occurred in the Slovenian deal. The Slovenian government accepted the declaration and decided not to cancel the deal.
In January 2010 Janez Janša sued Magnus Berglund for 1.5 million euro for defamation in a Slovenian civil court (Novo Mesto) and Ljubljana prosecutors requested 6 months of imprisonment for Berglund.
Finnish government position
So far, the Finnish government has kept a neutral stance. The state of Finland owns a majority share in Patria. The minister responsible for administration of Patria stock, Jan Vapaavuori, said that the Finnish government does not intend to issue any statements, particularly during the election period, as that would intervene in the internal affairs of Slovenia. The first diplomatic note was answered by Minister of Foreign Affairs Alexander Stubb, who stated that the government will not intervene against the journalists, in respect of the freedom of the press. Furthermore, Yle is a non-departmental body directly responsible to a parliamentary committee, not the Finnish Council of State. The second note was answered on similarly neutral terms: the Finnish Council of State will not and cannot interfere in an ongoing police investigation.
Police investigation and Trial
The Finnish police agency investigating the case is National Bureau of Investigation (NBI), and the case will be heard at Helsinki district court. Two employees of Patria have been arrested for questioning, of which one has been officially imprisoned by the Helsinki district court and one has been released. The CEO, Jorma Wiitakorpi, is still considered a suspect, charged with bribery and industrial espionage, although Patria's own investigations found no evidence. Furthermore, Helsinki district court imprisoned an Austrian and a Slovenian businessman in absentia, and their hearings are being prepared in co-operation with Austrian and Slovenian officials.
The Finnish NBI criticized the actions of their Slovenian counterparts. According to NBI, the Slovenian police has not provided the information requested for the investigation. On the other hand, when NBI sent a classified list of individuals that the Slovenian police should interview, no interviews were arranged, but the secret list was leaked to the public. According to the officer in charge of the investigation, despite Slovenian police being able and willing to co-operate, the difficulties in the co-operation between the officials are already hindering the investigation.
Two Patria executives were found guilty of bribing Croatian officials between 2005 and 2008 by a Finnish District Court. The executives were given conditional sentences and the company was fined 300,000 euros.
The Austrian police suspected money laundering and other offenses, when Wolf’s bank warned them about the suspicious transactions and blocked his account. The Austrian Interpol notified the Slovenian police about this but the Slovenian police ignored the notification. It replied only after more than a year, when the news about this was published in the Slovenian daily Dnevnik.
The Slovenian police investigation has been practically stalled, according to MOT. The Slovenian police rejected the accusations of having leaked the secret list. It also started the internal investigation of why the Interpol notification has not been answered to.
The Slovenia Times wrote on the U.S. Embassy cables:
While the antagonists in the ongoing Patria scandal wage their media war on whether Janša’s SDS was a bribe-taker or a victim of conspiracy, the cables make the US’ understanding of the matter quite clear. The May 2007 cable has Ambassador Robertson quoting a “clandestine source” that “PM Janez Janša’s SDS received more than EUR 2.8m ‘under the table’ from Patria.” Moreover another cable on a meeting with Janša reports that the politician’s “ignorance” about the details of the APCs tender “was a bit disingenuous, especially since we know that as Slovenia’s former defence minister he follows these issues”. The views of the ambassador, who adds in the same cable that “the entire Patria deal has smelled fishy from the get-go”, were explained away by SDS.
— Nothing Shocking, The Slovenia Times, 10/10/11
Slovenian prosecutors filed charges for corruption against Janez Janša on Aug 6, 2010, though Janša affirmed that he did not receive any notification. Janša denied having "requested or received any rewards or payments related to the Patria deal" in a statement on Aug 27, 2010.
Bribery trial in Slovenia (2011)
In September 2011 a bribery trial has begun in Ljubljana Court following to criminal investigations and indictments for bribery or complicity in bribery connected with the 2006 purchase of 135 Patria APC. The five defendants in the trial are: Jože Zagožen, Tone Krkovič, Janez Janša, Walter Wolf, Ivan Črnkovič.
On June 5, 2013 Liubljana District Court sentenced former Prime Minister Janez Janša to 2 years of prison for receiving bribes from Patria Oy. The co-defendants, Brigadier Tone Krkovič and Ivan Črnkovič, were sentenced to 1 year and 10 months in prison. 
European Union Art. 346 and Arms Trade
||This section possibly contains original research. (May 2012)|
The freedom of the press is protected as constitutional right in democratic countries. Finland takes it seriously and, in the Patria case, taught a lesson of democracy, of rule of law, and of business ethics to the world. Whether MOT's charges of bribery are true or not, Finland protected the freedom of speech better than United States, and against its own national interest. MOT report is of enormous value for the European Union and its attempt to put some democratic transparency in the European Defense procurement. Arms trade enjoys a particular status in EU, due to its essential connection with national state security, as per Art. 346 of the Lisbon Treaty:
The provisions of this Treaty shall not preclude the application of the following rules:
….(b) any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material; such measures shall not adversely affect the conditions of competition in the common market regarding products which are not intended for specifically military purposes.
Art. 346, while granting member states the right to classify national information on the subject, i.e., to apply the State secret to arms production and trade of member states, explicitly prohibits the use of civilian (indirect) offset as form of distortion of free competition in the common market of the European Union. Some Aerospace and Defense companies abuse of indirect offsets is equivalent to straight bribery, if not worse. This is a level more sophisticated but not different from a bribe, and it is also the level of the commercial war between Patria and General Dynamics, in which Slovenia is just one of the European battles.
There are three reasonable hypotheses on the truth or falsity of the MOT program:
1. Finland and Slovenia are corrupt countries. The rest of European countries are not. Magnus Berglund discovered the corruption, and MOT program is truthful and accurate. It looks that Slovenia is a corruptible country, while countries like Portugal or Belgium (with over one billion euro purchase) are not. Slovenian politicians accept bribes, while the rest of the military sales involving Armoured Wheeled Infantry Vehicles is bribe-free. Furthermore, Finnish companies like Patria are ethnically inclined to corrupt foreign states ¨to obtain and retain business¨, while German Siemens, and U.S. General Dynamics have better policies against active and passive corruption.
2. Magnus Berglund's MOT Program is populist propaganda to increase audience. No valuable truth content. In fact Slovenian police did not even open an investigation on the corruption charges against its Prime Minister and military. Wiitakorpi is a scapegoat, not very smart, but he is completely innocent. No bribes. A variation on this hypothesis is that Wiitakorpi and friends pocketed themselves the alleged bribe, and used the bribe allegation to enrich themselves. Another variation on this hypothesis of falsity of MOT allegations is the some journalists have been paid or tricked by some Patria competitors, in order to create a false report. In all these cases there is no bribe, Slovenian politicians and public officials are clean and innocent.
3. The third reasonable hypothesis is that corruption of state and military officials in arms trade is a European plague. It is not a question about business ethics of Finnish businessmen and political integrity of Slovenian politicians and military (that allegedly shared 21 million Eur, 7,5% of the contract price paid by Slovenian taxpayers). MOT program is a burst of sunlight, in spite of some small errors or minor slips into sensationalism. Actually, the program is sensational, and if it was not, why did Slovenian Embassy in Finland request to stop the broadcast?
Follow the money
The best angle may be seen by following the money involved in arms trade. Authorities have to complete investigations, but the free press of the Continent has the professional duty and the constitutional right to research on one of the less transparent and most protected items in national budgets. Lack of investigative reporting in the media is a dangerous democracy deficit. In democracy, security issues should not be used to conceal accountability. Defense procurement budgets are but taxpayers money. Corruption in security is one of the most corrosive forms of corrupt practices in democracies, since it is not only about money. It is about citizens trust in the lowest rank policeman up to a President of a country.
The actual situation regarding offset agreements in EU is described in details in a study on defense offsets in the Union countries commissioned by the European Defense Agency and published in 2007. According to this study the volume of EU offset agreements in 2006 was above 4-5 billions euro. The distribution of these offsets is as shown in the diagram: Direct Offsets, Military Indirect Offsets, Civilian Indirect Offsets.
One could say that nothing would have emerged, if only Wiitakorpi would have humbly asked the experienced American giant for an advise on how to use indirect offsets. He could have solved the problem of bribes (if any bribe was due) by establishing an offset fulfillers in Liechtenstein, or in one of the convenient branches of LGT. No need to transfer the money through Austria to Liechtenstein. While Austria treasures bank privacy, it abides to money laundry international laws. In Austria the alleged Patria case scheme was exposed, perhaps because of a zealous bank clerk (or perhaps because Slovenia did not buy the Austrian Pandur). In any case, the fault is to blame on the naïve Jorma Wiitakorpi, leader of an excellent but dwarfish defense company. To be sure, a wire transfer to Feldkirch (Austria) as compensation for a defense contract is called bribe, while the same wire transfer to Schaanwald (Liechtenstein) as compensation for the same contract is called indirect offset. No much difference, geographical speaking, only 4 km in the Alps, but a great difference in international defense contractors sophistication. LGT Luxembourg branch can transform that money (being it a bribe or a fake indirect offset certificate) in whatever one likes in the Schengen area. Substantially but also legally speaking it is still corruption, but hard to understand even for investigative journalists.
MOT opened up a valuable breach in an obscured area and, if it is right, it reveals a standard of requested bribe percentage to sell weapons in Europe.
- "Berglund se je motil. Objavljamo dokument: J ni Janša, ampak Jerković" [Berglund was Wrong. Hereby We Publish a Document: J is not Janša, but Jerković] (in Slovenian). MMC RTV Slovenia. 11 September 2011.
- 1983 Beirut barracks bombing
- Mike Turner, former CEO of BAE: ¨Turner also lamented that Europe had failed to come together on armoured vehicles the way it did with the Eurofighter, so weakening the British armour industry. Current low-intensity wars have seen heavy purchasing of armoured and protected vehicles intended to safeguard Western troops from ambushes and mines, but little of that business has come to Britain."That would have been a great opportunity, but we didn't achieve it" said Turner. Arbuthnot suggested that perhaps only Turner could have achieved it - alluding to the fact that BAE might have chosen to buy up European armoured-vehicle firms rather than ones in America as it actually did. BAE's US acquisitions have made a lot of money selling armour to the Pentagon, but the British tank industry is effectively moribund and that of Europe fragmented.¨ Nov 19, 2008 . The issue of armoured vehicles is pressing and the first concern for ground troops: ¨Seven American service members were killed by two roadside bombs in southern Afghanistan on Monday, according to the NATO-led I.S.A.F. ... An American armored vehicle was completely destroyed¨ - New York Times, Aug 31, 2010.
- ¨In 2004, the board of Alvis approved a £309m takeover bid by the American defense company General Dynamics. Within three months BAE Systems, which already had a 29% stake in the company, outbid General Dynamics by offering £355m. The action was seen as a defense of the home market from a foreign rival¨ Alvis plc.Alvis had acquired also Swedish armoured vehicle manufacturer Hagglunds AB, so General Dynamics was trying to kill two birds with one stone: U.K and Sweden.
- Preparation of the tender started in 2002, while the ¨evaluation of the contenders for this procurement program started in autumn 2003¨
- Portuguese Pandur
- Czechs Choose, Cancel, Then Come Back to Pandur II APCs, 23-Feb-2010
- Slovenia signs 278 mln eur deal with Finnish defence firm Patria, Forbes,19/12/2006 
- YLE Claims Stir Political Storm In Slovenia, YLE
- Slovenia Delivers Note to Finland Over TV Programme Accusations
- Mot: The Truth about Patria
- "Dokazov v zadevi Patria nimam" (in Slovenian). Finance.
- "Poglejte oddajo, prisluhnite drugi strani, presodite". Rtvslo.si. 1 September 2008. Retrieved 2008-09-07.
- "Janša: Hude obtožbe brez dokazov". Rtvslo.si. 3 September 2008. Retrieved 2008-09-07.
- "Vlada YLE zaprosila za objavo 2. dela oddaje". Rtvslo.si. 6 September 2008. Retrieved 2008-09-07.
- ¨The Novo Mesto district court declared itself competent to hear the civil suit although it concerns a programme made by a Finnish TV station that was broadcast in Finland. As regards the criminal case, a justice ministry investigation into its legal basis concluded that case was taken over from the first attorney general in charge Katarina Bergant, who wished to drop the case against Berglund. The head of the Ljubljana District Prosecutors Office Tamara Gregorcic personally take the prosecution against Berglund and push the case forward.¨
- YLE Tv-uutiset ja sää, TV1, tiistai klo 20.30 2.9.2008. http://areena.yle.fi/toista?id=1467710
- "The Helsinki district court on Friday ordered the release of Jorma Wiitakorpi, a former chief executive of state-owned arms maker Patria, after more than a fortnight in custody. Mr Wiitakorpi is suspected of industrial espionage, aggravated corruption and corrupt business practices in conjunction with an armoured personnel carrier deal in Slovenia." Patria ex-CEO Wiitakorpi released, Helsinki Times, 28/11/2008 
- Patria executives found guilty of bribing Croatian officials Yle, 2015
- Slovenian Ex-Premier Goes on Trial Over Patria Deal, Delo Says, Bloomberg - 05/09/2011 ; Patria Case Trial Postponed for Next Week, The Slovenia Times 06/09/2011 ; Patria Trial, Day Two, The Slovenia Times, 13/09/2011 ; Court to Examine Request for Exclusion of Evidence, The Slovenia Times, 15/09/2011 ; Criminals or Victims of Political Trial? The Slovenia Times, 22/11/2011 
- Meet Walter Wolf, international man of mystery wanted for bribery, The Globe and Mail Jun. 21 2013 
- Ex-Slovenian PM on trial for bribery, Irish Times,06/09/2011
- , 
- The Code of Conduct on Offsets, 2008.. See also EDA Offset Portal for the Member States information on their offset rules 
- The Treaty of Lisbon amends the EU's two core treaties, the Treaty on European Union and the Treaty establishing the European Community . European policy on offsets is still regulated by the Treaty establishing the European Community. Art. 223 of the Treaty of Rome (1958), then article 296 of the EU Treaty of Amsterdam (1999); since December 2009, the Treaty of Lisbon (art. 346) protects member States weapons production and trade from competition rules of the common European market. In spite of 50 years of European history Article 223 (Rome) and Article 346 (Lisbon) are practically identical. Today the hinge of EU policy on offsets is still the same article, that is, Art. 346 of the Lisbon Treaty. See Offset agreement
- Foreign Corrupt Practices Act
- The largest settlement for corrupt practices is by Siemens AG, that in 2008 paid about $1.6 Billion in fines to U.S. and to Germany. see ¨KEEPING FOREIGN CORRUPTION OUT OF THE UNITED STATES: FOUR CASE HISTORIES¨, United States Senate, PERMANENT SUBCOMMITTEE ON INVESTIGATIONS Committee on Homeland Security and Governmental Affairs, Feb 4,2010 
- ¨We do not engage in bribery or kickbacks. A bribe or kickback is the giving or accepting of money, fees, commissions, credits, gifts, favors, or anything of value that is either directly or indirectly provided in return for favorable treatment. You must never offer, give, ask for, or receive any form of bribe or kickback. Favorable treatment often can appear innocent, such as paying an invoice earlier than we normally would. However, favorable treatment is illegal when offered in exchange for a gift.¨ General Dynamics, Standards of Business ethics and conduct, aka, The Blue Book, by Jay L. Johnson, GD CEO, Aug 2009. Earlier version by Nicholas Chabraj, former CEO, in Steyr site:
- On this see the important distinction between passive and active corruption in the European conventions  and OECD Anti-Bribery Convention 
- This would not be impossible. See, for instance, a false report like the Niger uranium forgeries. There is also a partisan version on the possible falsity of Berglund's report, understood as conspiracy within Slovenian politics: ¨The ruling coalition insists that the entire Patria case is a conspiracy conceived by the Slovenian opposition and the “Truth about Patria” program’s producers. The opposition refutes these allegations¨.
- ¨In a recommendation for NATO's new 10-year strategic vision, experts led by former U.S. Secretary of State Madeleine Albright said only six of NATO's 26 European members were meeting their defense spending target of two percent of GDP¨ May 17, 2010 . Slovenia plans to cut and renegotiate the deal with Patria.
- «A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction...This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every statehouse, every office of the federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.» President Eisenhower's farewell address, January 17, 1961
- Final Report of 06-DIM-022 Study on the effects of offsets on the Development of a European Defence Industry and Market By E. Anders Eriksson with contributions by Mattias Axelson, Keith Hartley, Mike Mason, Ann-Sofie Stenérus and Martin Trybus, 12 July 2007. The study was financed by the European Defense Agency and contracted to FOI and SCS.
- See also U.S. Senate Report on LGT, July 17, 2008. Liechtenstein tax affair
- It requires knowledge of the complexity of international arms trade and of the byzantine offset mechanisms. See Offset agreement
- ¨According to estimates by the European Defence Agency, 25 percent of the offsets in Europe are non-military and have no direct connection with the purchase. "These contracts totally violate the EU's internal market competition rules," Portuguese Socialist MEP Ana Gomes told EUobserver. "They are contracts negotiated among companies with government favouring and in total disregard of the competition rules. There are plenty of reasons why the European Commission should investigate, and make it an exemplary case to deter such behaviour from now on from any member state." So far, the commission has turned a blind eye to the non-military contracts occurring alongside large defence procurements.¨ EU Observer, July 27, 2010