Austrian count goes on trial over arms deals

Reuters News
Posted: Dec 11, 2012 10:32 AM
Austrian count goes on trial over arms deals

VIENNA (Reuters) - He hosted lavish hunts at his castles in Scotland and Austria, hobnobbed with the glamour set and wed a government minister.

But the Austrian count who rose from obscurity to wealth goes on trial in Vienna on Wednesday, charged with laundering money from Britain's main weapons maker to influence arms deals in central and eastern Europe.

It is another brush with fame for Alfons Eduard Alexander Antonius Maria Andreas Hubertus Christoph Graf von Mensdorff-Pouilly - his friends call him Ali - whose lobbying in the shadowy world of the weapons trade has featured brushes with the law as well.

His attorney, Harald Schuster, declined comment on the case. But Mensdorff-Pouilly has denied wrongdoing in parliamentary hearings.

Austrian prosecutors allege Mensdorff-Pouilly, 59, used 12.6 million euros ($16.3 million) in funds diverted from BAE Systems to influence potential arms deals in emerging Europe. He is also charged with perjury and faces five years in jail if convicted.

The case is the latest in a series of corruption scandals that have shaken Austria and fuelled perceptions of a cosy interplay of business and political power in the Alpine republic.

Suspicions about BAE contracts in central and eastern Europe had landed the count in investigative custody in Britain for a week in 2010 before he was freed on bail. He got 430,000 euros in compensation for that after British prosecutors dropped charges against BAE in 2010 in return for fines.

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BAE Systems is not a defendant in the Austrian case.

"A full investigation of these matters was concluded in February 2010. The Austrian authorities have not asked us to participate with any enquiry nor notified us of its subject matter," the company said.

Austria slid down to place 25 in Transparency International's corruption index released last week from place 16 a year earlier, as criminal inquiries continued into a slew of alleged graft cases.

($1 = 0.7736 euros)

(Reporting by Michael Shields and Georgina Prodhan)