Full report: Ericssons millions were transfered to Greece

The Insider - Ericssons millions were transfered to Greece
33 min

For years, we've heard the rumors. How the Swedish company Ericsson paid bribes in Greece when the country bought the military radar system Erieye. It was a strategic multimillion order. And Greece was the first Nato contry to choose the Erieye-system.

Ericsson has however constantly rejected any bribery allegations and claim that they have and had a zero tolerance on corruption.

READ MORE:
"Ericsson bribed Greek policymakers" (April 2nd)
More payments to the agent accused of bribing in Greece (April 4th)
Documents show Ericsson's payments (April 4th)

But secret documents from within the company indicate that the management of Ericsson is not telling the truth. In Greece the former deputy manager for arms contracts at the Defense Ministry, Antonis Kantas, has been found with over a hundred million in various accounts abroad.

He now tells the investigators everything. How he in the 1990s and early 2000s, took bribes from big corporations in relation to weapon deals.

We are on our way to Greece hoping that the new information provided by Antonis Kantas might help us forward.

In central Athens the economic crisis that nearly has crippled the country is detectable everywhere. Stalled renovations. Occupied squares. Slogans and demonstrations.


People blame the crisis on corrupt politicians and officials . The latest corruption scandal not the first. Greeks confidence in public institutions is low.

What’s your name?

-- Violeta Cordacci.

And where do you work?

-- I am a civil engineer with the ministry of culture. I work every day. I want to work hard but the situation is very difficult now, nothing works in the public.

She says that politicians only think about themselves. And she is ashamed of the constant corruption scandals.

-- We feel bad because we do not want the whole world to think everyone in Greece are in this corruption Because we are not. Now the whole world thinks that we are all corrupt. But that is not the case.

– Many, many times people say that I work to the public so I am in the corruption like all the others. And that is not true!

People think that? Because you work in the public

-- Yes yes.

So They expect everyone in the public sector to be corrupt?

-- Yes.

How does that make you feel?

-- Bad, very bad. I do not want this because i am not like this!

The economic crisis has created widespread discontent. An open Nazi party has taken place in Parliament.

– It's very scary when the results from the elections came up. I was terrified. I wanted to move to another country. Just for that, said Kristina Adanapolo, a law student.

The Greek Security Analyst Ioannis Michaletos says that the current corruption scandal is one of the largest ever in Europe.

-- Over the past few years we have been aware of great revelations regarding arms procurement from the mid 90s almost up to date that involves almost all the deals from all companies that sold weapons in Greece so I think this is one of the biggest corruption cases in Greece over the past few decades and one of the largest in Europe.

We ask him about Ericsson and the deal with the radar system Erieye -  that's why we're here after all.

He knows about the deal. He says that the last deliveries were made in 2008.
Ioannis Michaletos estimates that the deal was extremely important to Ericsson. Greece is an access ticket to the entire Nato market. And as a bonus the country has constant border disputes:

-- So anyone selling arms to Greece or Turkey also have the chance to test the system in a simulation of a war incident and that is a huge advertisement for any company.

Ioannis Michaletos works as a security analyst for several reputed organizations and we ask him if he knows about the existence of bribery in the erieye deal.

He looks at us with a smirk. The contract was signed by the then defense minister, who now is in prison, sentenced for, among other things, money laundering:

-- If we take into account the people involved and the spread of the network it seems that in order to sell weapons in Greece you had to bribe, he said.


According Ioannis Michaletos. Ericsson has probably paid at least 10 million euros in bribes. Maybe more.

-- 10 million euros in bribes, that’s the minimum taken into account that two percent has been found already for all defense dealings.

But lacking proof he states that he cannot know for sure. It’s still a speculation.

And every time we contact Ericsson they say the same thing:

--  We are not paying bribes. We have zero tolerance.

But there is someone who might know. The deputy manager at the ministry of defence, Antonis Kantas was one of the key decision makers when the contract for Erieye was negotiated. In his role as a procurement officer, he had the power to stop the whole deal. Now he collaborates with the prosecutors and tells them who bribed him.

It's dark and it's nearly ten. The interrogation with Kantas has been going on since this morning. In a pause, he suddenly comes out - a thin man in a big suit.


Although Kantas did not belong to the top level, he succeeded - in no more than five years - to hide at least 10 million euros in bribes.

The 70-year old man looks at us with a puzzled face, we are the only foreign journalists in the courthouse. The policemen surrounding Kantas have forbidden us to talk to him- but we still take the chance. Has he told the investigators about Ericsson and Erieye?

Mr. Kantas?

-- Yes

Have you talked about the Erieye deal?

– Erieye, that's a later issue, he says before he wanders away surrounded by policemen and three lawyers.

The following day, we get to meet with one of Kantas lawyers.

Ioannis Mantzuranis is not just anyone. Few know more about what really goes on when senior politicians and officials are bribed in Greece. For more than 25 years, Mantzoranis has worked with most high profile trials. Among them many high profile corruption cases.


He is also well connected in politics and is one of the founding members of the Pasoc party that for a long time used to rule in Greece.

He claims that amount paid in bribes in the defense deals rose during the late 90s which was the time the Erieye deal was signed.

-- Commissions from European companies ranged from 2.5 to 4 percent but since the Russians and the countries of the eastern block entered the market it would reach 10 percent.

In the middle of a sentence Ioannis Manzouranis picks up his phone that has started to ring.  He disappears, leaving us in the meeting room.

After a while, the lawyer is back. He seems happy.

-- It was some bankers from swizterland, he says.

Banks from Switzerland? What do they want?

-- They are involved, he says with a smirk.

He leans back contentedly in his chair and lights a large cigar. We ask him if his client Kantas is the only one who has been bribed. He firmly shakes his head.

-- It’s the general director of the armament program, sub-ministers, the minister himself, heads of different unions.

So what about the Erieye deal?

-- Well, says the lawyer. Antoni Kantas has been bribed in that deal as well. A businessman and former military man named Christos Tombas has paid him 250 000 euros to get him to sign his approval of the deal.

So it was Ericsson that bribed?

-- No, it was a different company - Embraer, says the lawyer.


Embraer, a Brazilian corporation, was Ericsson's partner in the deal, it was on their aircraft the Erieye radar system would be mounted.

But Ericsson is not innocent, says lawyer Mantzoranis.

According to his client - the prosecutors star witness – Ericsson did give bribes to secure the Erieye deal.

-- That is true, the Ericsson people gave money at higher level indeed, Mantzoranis says.

But when we ask him to elaborate he shakes his head.

-- That is all I can say.

We're back in Stockholm. We have realized that the Greek investigators and lawyers probably know less than we do. Some time ago we connected with a former Ericsson director who claimed that Ericsson already in the 90s built a system that could handle the large bribes needed in Greece.  

In a security cabinet we keep something that support the accusations of the former Ericsson executive.

It looks like a cassette tape used for computers back in the 80:s. A yellow post it note is glued on the surface. The note is signed by a senior Ericsson director.

"This cassette is pure dynamite into the wrong hands. Contains info from both long and short bank payments. You asked me to send it to you for destruction, I certainly do not want to throw it in the trash."
 
--
I called all the experts and no one knew what it was. Finally I sent a picture of the box to a firm. After a while they called me. Turns out it is a typewriter ribbon from an electric typewriter.  So I asked them. How can I read it? They said the only way is to open the box

-- Does that mean no one has read it?

-- Correct , it has probabaly rested in a secret cupboard for 10-15 years  - Damn this was difficult to open I think I need some tools!

-- Throw it on the floor.

-- Could that work?

[Flings box in the floor]

– It worked, It opened!

The cartridge contains the inked bands of an electric typewriter. When you roll them out, you can see the imprint of the typewriter keys. It has been stored as an extra analog copy on payments to agents from the mid 90s.

After a few hours search we find the names who according to the former Ericssson director handled the bribes in Greece. There are a number of payments to secret bank accounts in Geneva.

"Private according to contract" it says.

The names mentioned in the ribbons of the typwriter handled only civil contracts for Ericsson telecommunication business. To convince military leaders and the top brass of the Department of Defense to choose the Erieye radar system Ericsson was forced to turn to someone else.

We have also obtained documents, including internal bank records showing that Ericsson has made huge payouts to get the Erieye contract. The money was channeled to Greece through a decoy where they were used to bribe important policy-makers. All according to our sources.


Peter Coleridge is the name of the decoy who received the money from Ericssson.  We have copies of the so-called payment orders from Ericssons signed by two senior managers of the company.


In total Ericsson has paid Peter Coleridge 13,8 million dollars. After several attempts, we succeed to locate him in Monaco.

– Hello.

Hello, is this Peter?

-- Yes.

My name is Eric. I am calling on behalf of a client in an urgent matter.
 

In hope to get mr. Coleridge to talk to us we don’t present ourselves as journalists. Instead we pretend to represent a client who wants to ensure that the bribes left no trace in documents that would make them traceable by the greek investigators.

Apparently you handled some contracts regarding an arms deal, a radar system deal in the late 90s, our client is worried that it might be traces from this money to senior policy makers in Greece. I am not eager to discuss this over the phone, I wonder if we can meet?

– Mhm. I suppose so. I don’t even know who you are.

-- We share a mutual interest here. We have to make sure there is no paper trail.

-- Mhm ok. Ok, what do you want to do.

Peter Coleridge understands that he and our “client” share a common interest. We makes appointments on Tuesday at two o'clock.

You re in Monaco at the moment, yeah?

-- Yes, I am.

We could come down on Tuesday two pm?

-- Yes, yes, that’s possible, ok.

Peter Coleridge is a British lawyer in exile representing several companies based in e disputed tax havens.

In deals involving bribery corporations often use local agents to organize the bribes. They in turn use decoys to handle the money. All in order to create a distance between the corporation and the bribes. According to our sources, Peter Coleridge is one of these decoys.

The setup seems to serve one purpose: To avoid transparency. Peter Coleridge company is registered in the African state of Liberia, a country that by that time was ruled by a notorious warlord.

It's Tuesday. We are in Monaco and the time for the meeting draws near. We are about to call Peter Coleridge to get a confirmation on where to meet. We are equipped with a hidden microphone and hope that he'll tell us about the bribes and the agent he cooperates with.

But he does not respond despite repeated calls.

The concierge in the building where Peter Coleridge lives, says that he had not seen him since last week. He disappeared after we talked to him.

Is this his office or does he live here?

-- He lives here sometimes.

Have you seen him to day?

– No, last week.

Peter Coleridge seems to have gone away.

For several weeks, we continue to seek contact with Peter Coleridge, we want to talk to him about the alleged bribes - and how they fit with Ericsson's zero tolerance of corruption. But the phone is dead and has closed down his Facebook account.


But there is someone who wish to talk to us.

– My name is Liss-Olof Nenzell

Why do you want to talk to us?

-- The truth must be told, I do not want innocent people to suffer. I think of others who helped with this. I do not want them to suffer for many, many years to have this sword hanging over them, that it will affect them personally, because the company does not want to take responsibility. My mom said before she died that I had to write everything down as it is, the truth, and submit it.

Liss-Olof Nenzell began working at LM Ericsson in 1970.  In the late 90s, on behalf of the head office, he built up  system, a  “world commission scheme”,  where seemingly respectable businessmen were hired for one sole purpose: To divert money to trade agents who didn’t want to be exposed to the public.

Liss-Olof Nenzell ran the business together with a lawyer in Switzerland. But over time he became increasingly concerned with the big payouts from Ericsson head quarters. It seemed that some of the money were being used for illicit transactions. Bribes.

But when he posed questions to Ericsson's managers, he received no response.

-- They thought I questioned things I had no business to talk about. Meanwhile there was a pressure from the parent company, that all of these payments must be executed.

-- After many years of silence Liss-Olof Nenzell decided to tell the truh. His story is unique. It's something as rare as a depiction from inside one of the world 's largest telecommunications companies.

-- It is dangerous to keep on to these documents, they know I have a lot of documents.

Are they scared of you?

-- No, they think I'm nice guy. I have been very loyal so they think I will say nothing.

For over two years we have had contact with Liss-Olof Nenzell and finally the time has come to tell what happened when Ericsson secured the Greek Erieye contract. This is a deal that Liss-Olof Nenzell remembers particularly clearly.

One day in the spring of 2000 he was called to Monaco where the bank refused to release a payment to mr Coleridge.

-- The amount that got stuck then was 12 million dollar.

12 million?

-- Yes that sat on Barclays bank

Why was it stuck?

-- The banks compliance department had thought that this was a dishonest transaction, it had no sender and the receiver was this man without the standing expected for someone who receives big sums of money. The bank stopped the transaction because they suspected something was wrong.

Barclays believed it was bribery?

-- Yes exactly.

On the narrow sidewalk outside the yellow bank palace in central Monaco - just a stone's throw from the world famous casinos - wandered a short man in a gray suit back and forth. The white hair was in a neat parting - but everything about the man signaled disorder and chaos.

From far away Liss-Olof Nenzell understood that it was Peter Coleridge. Once they started talking, it was obvious that Peter Coleridge was upset.

-- Yes, he was so nervous, he was so terrible nervous about this whole thing. He feared he wouldn’t be able to live up to his part, to transfer the money.

Do you know if he was nervous for his physical safety?

--  Yes, it was part of the threat. Yes.

How did he described the threat?

-- That was to be tracked down by these who did not get their money.

-- Yes tracked down and forced to personally provide the money in a less civilized manner.

Did he put it like that?

-- Yes.

What does that mean?

-- He felt physically threatened.

He feared for his life?

-- Not for his life, perhaps, but for his relatives they won’t go after the on who can really help them.

According to Liss-Olof Nenzell, Peter Coleridge used the money to pay policymakers in Greece. Worried and scared Coleridge also said something out of the ordinary.

-- I heard names.

What names?

-- I can not remember now, it was this typical Greek names. It was these highly placed people in the Greek establishment.

Politicians?

-- Politicians and generals and senior civil servants.

There was no doubt that the money Peter Coleridge received would be used as bribes in the Erieye deal in Greece, says Liss-Olof Nenzell.

-- It was a corruptive payment. This decoy was going to allocate the money to people no one should know about.

In Monaco Liss-Olof Nenzell was joined by Ericsson director of finance Yngve Broberg from headquarters. And it was finally Yngve Broberg who convinced the bank to release the payments according to Nenzell.

-- Yngve used another business consultant to convince the bank that it was a legitimate payment so that they would release the money.

The financial manager Yngve Broberg confirms that he was in Monaco, but can’t recall anything unusual about the transaction. He declines to be interviewed. Instead we get to meet Ericsson's General Counsel Nina McPherson.

– We work incredibly hard with anticorruption and we have done so for many years.

And what is your policy?

-- Yes, zero tolerance to corruption.

Long before the interview, we informed Ericsson about the allegations of corruption, the decoy Peter Coleridge and the corruption scandal unfolding in Greece. We seek the answer of one single question:

Did Ericsson pay bribes in order to win the contract for Erieye in Greece?

-- I can say this: If there were bribes we didn’t know anything about them.

When you have taken in the facts that we have informed you about what is your assessment? Does it seem to you that Ericsson hav paid bribes in Greece in order to get this Erieye contract?

– I really hope it is not so.

You hope that it is not so? Do you feel like you believe what you are saying?

[Paus]

--  …yes.


What's this?

We show her the payment order from Ericsson to Peter Coleridge in Monaco.

-- Yes, well, it looks like a... well... maybe a payment.

But that name is a bit familiar, huh?

-- Yes because you've mentioned that before.

But that is not familiar to you?

-- I can say this: If there were bribes we didn’t know anything about them.

-- No.


We point again to the name “Colerdige” and pose the same question as we have several weeks now: Why did they pay over a 13 million dollar to Peter Coleridge?

-- From what I am told he is someone who has represented our agent down there

Who was that, your agent?

-- As I understand it, it was a person named Toumbas.

Toumbas?

– Toumbas

Toumbas was your agent?

-- Yes , and why he received the money in between I don’t know.

Toumbas. Christos Toumbas. We know that name very well. He was the one who Kantas, the manager at the Greek Defense Ministry, pointed out in the huge corruption investigation. He was the one Kantas claimed paid him a bribe of 250 000 euros and who the lawyer thought was working for Ericssons partner Embraer.


But Nina  McPhersson doesn’t think he has paid any bribes.

-- I hope he has had a nice life because he made ​​a good deal. That's what one would hope for.

One can see the picture in front of him that he has a nice office and a well- seen businessman.

– Yes , it may well be like that.
 

Back in Greece we have located one of Toumbas business in the district Glifada on the coast near Athens.


From the windows of the taxi we are looking for a luxury office building suitable for an official agent working for Ericsson in an important country like Greece.

An agent who in one single year received over 100 million dollar in fees .
But the taxi stops outside a run-down gym.

– Hi! I am here to see Christos Toumbas.

– Toumbas ? You're mistaken.

The address is obviously wrong

We are looking further into the Company Register of Greece and find that Toumbas seems to be involved in a multitude of business. Weapons. Boats. Olive oil, Avionics. Clothing. Medications

But at the addresses stated in the records he is not to be found. The official agent for Ericsson who negotiated a 400 million Euro deal seems to be a small dealer who hide behind false addresses.

Like here, where we instead find a car repair shop.

– He is not here!

Never been here?

-- No.


We find another adress a few hundred meters away. And this time, we are lucky, Christos Toumbas is supposed to be on the top floor, behind a steel door with no sign.

-- Oh, now we step out on the office building's roof.


Suddenly one of the windows opens up and three older men are staring at us while we are wandering around on the roof.

– Toumbas is absent.  His company is closed, they say.


Do you know where he's gone?


The answer comes quickly.

– No, no.

The three men ask us to come in through the window so that they can show us out through the door.

But at the elevator one of them stops us.

-- Have you lent him money, does he owe you money?

They think we are loan sharks there to collect his depts.

We finally reach him on the phone.

– I don’t know what you are talking about, there is a misunderstanding.

 Kantas says that you gave him 250 000 euros.

-- No Daniel. I do not know and I can not talk to you about the case.

 We are here in Glyfada now. Can you not just sit down and talk with us and you can explain everything.

-- No. I am sorry. I have nothing to add. I do not know about the case or what you are talking about and I can not talk.

Did you work with Ericsson on the Erieye-deal?

-- Look, let’s finish this discussion because I do not know what was going on.

 

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