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The Economist Accuses Airbus Of Corruption  
User currently offlineTravelin man From United States of America, joined Mar 2000, 3477 posts, RR: 0
Posted (11 years 1 month 2 weeks 1 day 19 hours ago) and read 6052 times:

This week's Economist magazine contains an investigation that accuses Airbus of bribery and corruption with at least 5 different airline deals: Sabena, Air Canada, Kuwait Airlines, SyrianAir, and Air India. Amongst the accusations is that Airbus paid $22.54 million to a "consultant" to "help" with the 1988 $1.5 billion Air Canada deal.

The entire story is here (subscription only, so I won't violate the copyright by copying and pasting).

http://www.economist.com/displaystory.cfm?story_id=1842124

Very interesting reading.

70 replies: All unread, showing first 25:
 
User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 1, posted (11 years 1 month 2 weeks 1 day 19 hours ago) and read 5948 times:

Very interesting. Thanks for posting it. Looks like Airbus may have hastened the demise of Sabena.

User currently offlineB-HOP From Hong Kong, joined Nov 2000, 623 posts, RR: 1
Reply 2, posted (11 years 1 month 2 weeks 1 day 19 hours ago) and read 5894 times:

N79969:-

Rather scary this is written by a British magazine, not 'Time' or 'Newsweek' . What is the point you dump planes to an unhealthy operator, the carrier finish and the second hand/new price of your plane collasped.

Regards
Kev



Live life to max!!!
User currently offlineElwood64151 From United States of America, joined Feb 2002, 2477 posts, RR: 6
Reply 3, posted (11 years 1 month 2 weeks 1 day 18 hours ago) and read 5871 times:

I'm going to read the rest of the article in print (I'm a subscriber).

Aside from describing military equipment contracts as indirect subsidies (Do they expect the government to build military equipment? And do they believe that Boeing doesn't compete with Lockheed, Northrop, FMC, and others for those contracts?), it was a pretty good article. I'll have to correct them on the "indirect subsidies" statement, but other than that, it has been interesting reading.

While I will refrain from accusing Airbus of anything, it is not unheard of for European and American companies to bribe government officials in the developing world to get contracts. Graft, kickbacks, bribes, etc, are frequently used to get a contract or government approval. However, thanks in large part to the Foreign Corrupt Practices Act, American companies are less and less the ones commiting these acts.

We can, of course, only know crimes are committed by what comes to light, but we do know that, in some instances, companies from other countries get contracts when American companies give a better offer. Sometimes, it's the other way around, admittedly, but Federal Prison is frequently enough of a deterrent to keep people from committing crimes in this country. Not Martha Stewart, but for people who's egos are not the size of the moon, it usually works.

Okay, flame me.



Those who fail to learn history are doomed to repeat it in summer school.
User currently offlineVarig md-11 From France, joined Jul 2000, 1583 posts, RR: 8
Reply 4, posted (11 years 1 month 2 weeks 1 day 18 hours ago) and read 5859 times:

B-HOP
I agree with you : you can still see some SN 'buses rusting at BOD in France ...

"the (french) government even permitted French companies tax deductions for giving bribes"

waoooh : that's a masterpiece of journalism!
where is the example??
having worked for French ministry of finance I wish I knew it !!



AF TW AA NW DL UA CO BA U2 TP UX LH SK AZ MP KL SN VY HV LS SS TK SQ PC RG IW SE
User currently offlineElwood64151 From United States of America, joined Feb 2002, 2477 posts, RR: 6
Reply 5, posted (11 years 1 month 2 weeks 1 day 18 hours ago) and read 5856 times:

Um, if you want examples, you can write to The Economist for a bibliography of the article. Why don't you ask them?

I don't know about the tax write-offs, but the bribery of government officials in undeveloped countries is historical across-the-board, from the US to France to Japan to India to China, to every single semi- and fully-industrialized country in the world. And that includes the last thirty years of the 20th century.



Those who fail to learn history are doomed to repeat it in summer school.
User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 6, posted (11 years 1 month 2 weeks 1 day 18 hours ago) and read 5828 times:

Bribes are still tax-deductible expenses in Belgium.

User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 7, posted (11 years 1 month 2 weeks 1 day 18 hours ago) and read 5779 times:

Varig MD-11,

How could you not know about the tax deductibility of bribes if you worked at the finance ministry? It has been well-known for years.

http://www.oecd.org/pdf/M00018000/M00018527.pdf


User currently offlineLZ-TLT From Germany, joined Apr 2001, 431 posts, RR: 0
Reply 8, posted (11 years 1 month 2 weeks 1 day 18 hours ago) and read 5768 times:

Looks like "anti-airbus" or "pro-boeing" article written on purpose:

Sabena - since owned by the SAir Group, a decision pro airbus is the more logical thing(IMHO). And the overblown order is rather to be attributed to Philipp Brugisser's megalomaniac concepts.

In the other cases, it is all about state-owned carriesrs and with exception of AC, some lands which have a different culture(it might be tempting to say "third-world lands", but it is not entirely correct. A decision to buy either Airbus or Boeing might be in this cause not entirely driven by economics, but also by political reasons or even by the voice of some mighty man having all the power and reigning single-handedly. As far the actual, factually-backed accusations in the article go, it appeared to me that these are to a significant extent based on coincidences and assumptions. And, when it comes to the Air India, KAC and the Syrian deals, I would speculate, political reasons were(and still are) much stronger to go with Airbus than Boeing, especially in the present time.

A bit of politics might have played also a role in the Air Canada deal(pro-french decision), but I wouldn't speculate further on that, it is just my guess.

All-in-all, for me, the article looks largely biased. And, last but not least, I think Boeing has an equal share of deals conducted that way(if not a larger share than Airbus)


User currently offlineTravelin man From United States of America, joined Mar 2000, 3477 posts, RR: 0
Reply 9, posted (11 years 1 month 2 weeks 1 day 17 hours ago) and read 5745 times:

A bit of politics might have played also a role in the Air Canada deal(pro-french decision)

Apparently $25 million had something to do with it as well.

last but not least, I think Boeing has an equal share of deals conducted that way(if not a larger share than Airbus)

Really? Based on what do you believe this? At least the Economist article sited names, dollar figures, and bank accounts. What proof of bribing and corruption do you have regarding Boeing?


User currently offlineGDB From United Kingdom, joined May 2001, 13166 posts, RR: 78
Reply 10, posted (11 years 1 month 2 weeks 1 day 17 hours ago) and read 5736 times:

Also a stink brewing about the Gripen fighter deal for the Czech Republic, BAE in the firing line, reminding me of their huge Al-Yamani deal with Saudi Arabia in the 1980's, (still at least BAe as they were then actually built aircraft).
Further back in time was the L1011 deal with All Nippon, a decade before that, the F-104 fighter deal with Germany.
There have been so many, I doubt if any major manufacturer not involved at some time.


User currently offlineArrow From Canada, joined Jun 2002, 2676 posts, RR: 2
Reply 11, posted (11 years 1 month 2 weeks 1 day 17 hours ago) and read 5713 times:
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I'm going to read the article -- but this has been played out in the Canadian media for more than 10 years, and got to its most ridiculous level when former Prime Minister Brian Mulroney (and others) were accused of being "on the take." In fact, there's a book called "On the Take" that goes into this and other alleged scandals.

But the book has been thoroughly discredited; other books have been written about it since that expose a fair bit of corruption on the scandal-mongering side; and Mulroney sued the current Liberal government for libel and defamation -- winning a huge out of court settlement and an apology.

On top of it all -- the RCMP closed its investigation into airbus just a month ago with no charges and no conclusions.

Now -- I'll go read the Economist piece to see if they've uncovered any new ground. I bet (without having looked at it) that the name Schreiber figures proinently in the piece.

Should be fun.



Never let the facts get in the way of a good story.
User currently offlineAvObserver From United States of America, joined Apr 2002, 2468 posts, RR: 9
Reply 12, posted (11 years 1 month 2 weeks 1 day 15 hours ago) and read 5616 times:

[But the American government has also spoken out on the subject of bribery. Two years ago Grant Aldonas, an under-secretary for international trade, told a congressional committee: “...unfortunately this [aircraft manufacturing] is an industry where foreign corruption has a real impact....this sector has been especially vulnerable to trade distortions involving bribery of foreign public officials.”]

I'm glad they noted this in view of my old postings of the congressional hearings on related matters.

http://www.house.gov/transportation/aviation/07-26-01/07-26-01memo.html

None of this is surprising, there are a lot of us who feel Airbus's meteoric rise from nothing to market leader in 30 years would not have been possible in this short a time without additional factors beyond merely having a competitive product range and service support. It'll be interesting to see now where this goes and whether the U.S. government will use this to bolster its' case if it takes a long-rumored co-complaint with Boeing against Airbus and the E.U. to the WTO. This situation is getting interesting and may be heating up!  Pissed


User currently offlineWingman From Seychelles, joined May 1999, 2211 posts, RR: 5
Reply 13, posted (11 years 1 month 2 weeks 1 day 15 hours ago) and read 5606 times:

I haven't read the article yet myself but from the original post I would have to ask why Airbus would ever bribe Syrian Air for a deal? Syria has no where else to go to buy jets.

User currently offlineRayChuang From United States of America, joined Jun 2000, 7987 posts, RR: 5
Reply 14, posted (11 years 1 month 2 weeks 1 day 14 hours ago) and read 5549 times:

If the article's assertions are true then we may have to take a close look at the Airbus deal with EasyJet (U2) for 120 A319's. Is it possible that Airbus officials or a proxy bribed members of U2's board of directors to buy the A319?

User currently offlineDynkrisolo From United States of America, joined Feb 2001, 1859 posts, RR: 8
Reply 15, posted (11 years 1 month 2 weeks 1 day 14 hours ago) and read 5511 times:

Wingman wrote:


I haven't read the article yet myself but from the original post I would have to ask why Airbus would ever bribe Syrian Air for a deal? Syria has no where else to go to buy jets.


How insightful! The author asked the same question!  Big grin


User currently offlineLuisca From , joined Dec 1969, posts, RR:
Reply 16, posted (11 years 1 month 2 weeks 1 day 12 hours ago) and read 5443 times:

I totally agree with not violating the copyright, but isnt posting a summary legal?

User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 17, posted (11 years 1 month 2 weeks 1 day 12 hours ago) and read 5443 times:

Here we have an eminently respected European publication publish a thoroughly well-researched report and we hear stuff like this:

"All-in-all, for me, the article looks largely biased. And, last but not least, I think Boeing has an equal share of deals conducted that way(if not a larger share than Airbus)"

I also want to hear the substance behind this ridiculous allegation.


User currently offlineDelta-flyer From United States of America, joined Jul 2001, 2676 posts, RR: 7
Reply 18, posted (11 years 1 month 2 weeks 1 day 12 hours ago) and read 5428 times:

Syria has no where else to go to buy jets.

Russia comes to mind. Old bosom buddies.

Pete



User currently offlineBWIA 772 From Barbados, joined May 2002, 2200 posts, RR: 2
Reply 19, posted (11 years 1 month 2 weeks 1 day 11 hours ago) and read 5404 times:

N79969

Would you say that airbus just followed Boeing and that Boeing is now upset because they are getting whipped by their own old tricks??

I think that this may be true to some extent but besides launching (where launch customers get planes at discount prices) has Boeing ever sold aircrafts in such large numbers as underhandedly as Airbus is accused of in this article. eg Sabena IA and KAC.



Eagles Soar!
User currently offlineN79969 From , joined Dec 1969, posts, RR:
Reply 20, posted (11 years 1 month 2 weeks 1 day 11 hours ago) and read 5380 times:

BWIA 772,

Absolutely not. What evidence do you have to back such a claim? Did you even read the article? Boeing did nothing on the scale and grandeur of the Airbus racket. And since 1977, it has done nothing. On the other hand, Airbus has been quite active.

The bottom line is that Airbus started as part of France SA. The French business culture is apparently nonchalant about corruption. As an organ of the French state, the goverment could never be objective about Airbus. I think the tax exclusions for bribes is evidence of that. Judging by the complexity of the schemes: shell companies, overpaid consultants, and so on one could call Airbus a watered-down, state-sponsored Enron.

Before France change its laws in that regard, African leaders had been calling on France to crack down its businessmen who were spreading the disease of corruption through their bribery practices.

http://www.globalpolicy.org/nations/corrupt/af.htm



User currently offlineSrbmod From , joined Dec 1969, posts, RR:
Reply 21, posted (11 years 1 month 2 weeks 17 hours ago) and read 5236 times:

I'll definitely be reading this article as soon as the new issue comes in @ work (if it isn't already there right now, it'll be in tomorrow). I have started to read The Economist because it gives a different viewpoint than US mags. Another good read is The Week (published by Dennis Publishing, the publisher of Maxim), it really isn't nothing more than a rehash of various newspaper stuff from around the world, but is a good read for sitting on the toilet.

User currently offlineQb001 From Canada, joined Apr 2000, 2053 posts, RR: 4
Reply 22, posted (11 years 1 month 2 weeks 13 hours ago) and read 5170 times:

As Arrow so clearly pointed out, these allegations have been investigated in and out in Canada for nearly 10 YEARS. Not only was nobody able to come up with any evidence, but apologies had to be made. So, that is a CLOSED CASE.

So A. vs B. belligerents, please go back to your barracks.



Never let the facts get in the way of a good theory.
User currently offlineBWIA 772 From Barbados, joined May 2002, 2200 posts, RR: 2
Reply 23, posted (11 years 1 month 2 weeks 12 hours ago) and read 5156 times:


Sorry i was responding to this.
"All-in-all, for me, the article looks largely biased. And, last but not least, I think Boeing has an equal share of deals conducted that way(if not a larger share than Airbus)"

And I was not making a claim, I was asking a question which was indicated by the question marks at the end of the first sentence. I am well if the precedent in this forum that requires evidence for any claim made!!




Eagles Soar!
User currently offlineBackfire From Germany, joined Oct 2006, 0 posts, RR: 0
Reply 24, posted (11 years 1 month 2 weeks 6 hours ago) and read 5109 times:

Oh for goodness' sake. Boeing is certainly not going to be dressing in virginal white on this one. Go back and revisit the "irregular commissions" which Boeing denied paying for years - even to the SEC, which takes some balls - right up until 1982 when it was finally forced into admitting the truth.

When it comes to winning multi-million dollar/euro contracts, there's very little moral ground in this world. Greasing the wheels is in some parts of the planet as a perfectly acceptable part of doing business. And if you're so naive as to believe that your favourite company - whichever that might be - is always playing clean and fair, then you're probably in for a rude awakening at some point.


25 Post contains images VonRichtofen : "you can still see some SN 'buses rusting at BOD in France ..." Plastic rusts??
26 Post contains images Airsicknessbag : Strange: this is nothing really new, why does it surface now? It was the 80s, with then Bavarian Prime Minister Franz Josef Strauss and his cronies s
27 DoorsToManual : Having read the article, I would like the Economist to produce a "special report" on Boeing next week, for the sake of balance. It would have been nic
28 Dynkrisolo : But they did report on Boeing. In the US, as a result of the 1977 Foreign Corrupt Practices Act (FCPA), Boeing could not have this kind of practice. B
29 Jmc757 : Its not just Aviation, and its not just Airbus. EVERY industry will have corrupt deals all the time. Its a fact of business. Accept it. I'm not it mak
30 Afay1 : I read this article today onboard a Swiss flight from Zurich, poetic justice?.....
31 FDXmech : >>>Its not just Aviation, and its not just Airbus. EVERY industry will have corrupt deals all the time. Its a fact of business. Accept it. I'm not it
32 Post contains images Udo : I'm still waiting for the day when an author brings to light the fact that Airbus has stolen all its plane designs and innovations from Boeing, MDD an
33 Phxinterrupted : It's interesting how many of the Europeans are trying to turn this thread into an anti-Boeing/American thread instead of investigating why their belov
34 9V-SPF : Corruption was and always will be existent where big loads of money are being transfered. In fact, nobody can really imagine what the worldwide econom
35 Srbmod : The article really does show to what lengths Airbus has gone to get customers, even if those airlines really didn't need (or could afford) these Airbu
36 LZ-TLT : Srbmod: What you stat in your post: Bribery may be S.O.P. in many parts of the world, but in a civilized West, such machinations are outdated and high
37 Dynkrisolo : Why do so many people have the impression that without Airbus, Boeing would have no competition. McDonnell Douglas was a competitor up until 1997. The
38 Gigneil : Bribery may be S.O.P. in many parts of the world, but in a civilized West, such machinations are outdated and highly unethical. Fortunately... the Wes
39 Ruscoe : I am appalled that anyone would try and be an apologist for bribery and corruption. In Australia and I think the USA such practises are investigated a
40 N79969 : Airbus would not be around without legalized bribery, launch aid, and my personal favorite: "repayable" loans. McDD would still be around had Airbus n
41 Udo : MDD failed because they were not able to build any more aircraft which the airlines wanted and needed. You just cannot survive by only focusing on str
42 Magyar : What many people who lives in the sheltered environment of the US or West Europe do not realize is that unfortunately there are countries in the worl
43 Ruscoe : I doubt Forgeard or one of the CEO's of EADS will even be asked a question in public by a reporter, about the Economists article. I am not saying corr
44 Joni : Airbus isn't the only manufacturer that sells planes to airlines outside the Western cultural sphere. You have to know the local business practices t
45 Gigneil : I am also disturbed by the non-chalant "so what" attitude I am seeing from the Europeans. Bribery is not part of the normal course of business and sho
46 Dynkrisolo : Gigneil: If it's acceptable in the rest of the world, why would the French change the laws? If it's acceptable, why would the Economist investigate th
47 N79969 : The logic that I am seeing is that if Airbus does then Boeing MUST be doing it as well. That is nonsense. The article discussed Boeing's misbehavior p
48 Joni : I read through the article, and really all it said was that some Syrians got long sentences for receiving bribes and Indian bureaucrats lost some fil
49 N79969 : Joni, It said a lot more than that. The article describes the systematic use of bribery to secure deals while Europe looked the other way. By your log
50 Joni : The article IIRC specifically mentioned that the Syrian affair is the only occurrence where a court had found some kind of wrongdoing.
51 Elwood64151 : Backfire: When it comes to winning multi-million dollar/euro contracts, there's very little moral ground in this world. Greasing the wheels is in some
52 North County : Interesting, It is very common on this board to crack back on an American by dropping the "You don't understand the culture" card. They tell us (Amer
53 N79969 : Joni, I don't think the number of court convictions are a good proxy for the amount of actual wrongdoing. Depending on the country, there may be convi
54 Joni : N79969, Normally, when the legal evidentiary standard isn't met the issue is laid to rest. You apparently have a stricter interpretation and require
55 N79969 : Joni, I think you are misinterpreting my remarks. I don't think Canada should waste another dollar investigating the matter. It's closed. If I recall
56 Joni : N79969, You can dig up large amouts of circumstantial evidence about a lot of things, but it requires a large investment of energy to assess what the
57 Qb001 : N79969, If I recall correctly, the Canadian authorities (RCMP) stated there was insufficient evidence to pursue the matter any further. However, they
58 Yyz717 : There was certainly evidence of Cdn govt interference with the AC 320 order. Some unusual aspects of the order were that the AC 722 fleet was relative
59 Magyar : To North County: >> The third world business is conducted by way of bribery...but the US and other governments want to change that - it is a waste of
60 Qb001 : What?!?! The 312 made its first flight April 3, 1982. And it was in commercial service in 1984, way after the Joe Clark govt. No way it was considered
61 N79969 : Joni, This did not require any digging for evidence. It was blatant and they left quite a trail. This is not some half-baked allegation like you imply
62 Qb001 : N79969, It just happen that the alleged Airbus corruption charges in Canada also involved Mulroney. The fact that Mulroney was, at the end of the day,
63 N79969 : Qb001, I think you are still missing the point. The exoneration of Mulroney does not = exonerate Airbus. Mulroney was just one person. There were othe
64 Qb001 : But I would bet money that Airbus did in fact resort to bribery and successfully covered its tracks. You're going exactly to one of the point I try to
65 N79969 : Qb001, Which facts would those be? The ones that the Mounties could find or the ones that the Economist has found and published. Let me repeat: just b
66 Qb001 : N79969, The fact that a thorough investigation led by the RCMP came to an end for lack of evidences. How are you so sure that The Economist came up wi
67 Yyz717 : The 312 made its first flight April 3, 1982. And it was in commercial service in 1984, way after the Joe Clark govt. No way it was considered by AC at
68 N79969 : Qb001, Do you believe that OJ is innocent because the LAPD screwed up the lab work? The RCMP quit looking because they did not want to prosecute a cas
69 Charleslp : Can't just airlines get the best of both worlds (Boeing and Airbus) without getting yelled at by the politicians?
70 BWIA 772 : Charlesp some airlines have done it look at Air France with the 777 and the 340. UA with the 320 and the 777.
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