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Sunday, October 21, 2007

The Nation: Air Force Defends Gripen Deal (Crap Journalism Alert)

Air Force defends Gripen jet deal

The Nation


The Royal Thai Air Force has defended its decision to buy 12 Swedish-made Gripen fighter jets worth about Bt34 billion, following criticism that the price tag was inflated and the timing inappropriate.

Group Captain Monthon Satnukorn, the Air Force's deputy spokesman, declined to comment on the timing after an article in a US publication suggested there should not be an arms transaction while Thailand still has an unelected government.


I think The Nation is starting to make shit up, because I have searched for hours for this mysterious US publication. Why doesn't The Nation name this publication and quote it?

However, Monthon said the multibillion-baht deal, approved by the interim Cabinet on October 16, was transparent and there was no inflated price tag as speculated.


"It's untrue that the price [for all 12 jets] was only about Bt20 billion. We've seconded senior officials to visit the manufacturer in Sweden and have had a thorough price comparison on various models," he said.


Other than me, who speculated that the price was inflated? I would love to read this US publication that came to the same conclusion as me.


I have not read one article that says all 12 jets were contracted for 20 billion baht. Did Captain Monthon misspeak or did The Nation misprint his words? Why didn't the reporter ask for a clarification? What is the actual price? 34 or 20 billion baht?


An Air Force source also said US-based Lockheed Martin, a major defence contractor and arms-maker, had recently asked in a letter to the Foreign Ministry why the Air Force had decided to buy Swedish jets.


"The letter, a copy of which was forwarded to the Air Force, noted that Thailand and the US had long been close military allies. At present, Thailand is also designated as the US's non-Nato ally," said the source.


"As a result, the US firm was wondering why the Air Force had not considered buying US-made jets, even though it previously acquired F-16A/B and F-5E aircraft from the US."


This last part would actually make sense if there hadn't been coup. However, the US is outlawed from selling arms to a junta that removed a democratically elected government by force.

The source said the Air Force had earlier approached the United States, Russia and Sweden to purchase the new squadron to replace its ageing F-16E jets, which will be retired over the next two years.


However, Lockheed Martin appeared to be uninterested and inflexible on the pricing of its F16C/D jets. Later on, the Air Force decided to buy the Swedish JAS-39 Gripen jets, which are considered sophisticated and good value for money.


"I guess the US private sector has asked for the reasons because we are a long-time buyer of US-made jets," said the source


Again, the US can't sell military equipment to Thailand because of the coup. Notice that there is no quote from Lockheed Martin concerning this story. Why didn't The Nation call them up and ask if they were "uninterested" and "inflexible?"

"However, we're not worried, even though the US government might step up pressure on the Swedish government not to sell the jets to Thailand during this juncture due to last year's coup.


Sweden has its own laws against selling arms to military dictatorships also.

"At this stage, we plan to sign only a memorandum of understanding with the Swedish maker, while a contract will be signed later after the country has a new elected government.


The first initial bribes have been paid. When the contract is signed, the next round of bribes will be paid.

"On the allegedly inflated price tag, I guess it's a misunderstanding because there is the basic price plus a wide range of sophisticated options, such as weapon or radar systems. It's like buying a car such as a Fortuner, which has so many options."


The thing about this story that really bothers me is that The Nation takes a falsehood, like a made up article of a fictitious US publication that it refuses to name or quote, then basically allows the military spokesman to refute a story that doesn't even exist. Yes, The Nation is that corrupt.

The Nation didn't bother to do any price comparisons on its own. The Nation didn't bother to investigate the fact that BAE Systems, the British arms dealer brokering this deal, has been accused of serious corruption charges all over the world regarding the Gripen fighters. The Nation didn't bother to ask for the invoices or ask to know what the details to this package deal are. The Nation didn't bother to ask the names of the military officials who brokered the deal. The Nation didn't even bother to fact check this story. It probably made up the story because it certainly contains no facts.

Like I have pointed out countless times, The Nation will lie, obfuscate and cover up for its patrons in the Thai military.

It will never do an investigation into the military procurement process. And it certainly will never do an investigation into the pre and post-coup assets of the generals.


Here is an interesting
story concerning the BAE Systems . I suggest my readers do a Google search on BAE Systems, Al Yamamah, Gripen and corruption.

BAE Systems owns about 20% of Saab, the maker of Gripen, and is responsible for marketing Gripen to foreign countries. From wikipedia, "
BAE is involved in production of the export version of the Saab Gripen and owns 50% of Gripen International KB, the company responsible for marketing of the aircraft. BAE owns a 20.5% share of Saab AB."


Money quote:

As far as Saudi Arabia was concerned, the jets were something of a white elephant for which it had little use and few capable pilots. The chief threat it faces comes from domestic not external opposition against which Tornados provide no protection. But the jets did provide a convenient cover for recycling the country’s oil revenues outside its official budget. One person involved in the deal told the Financial Times, “It was a way of Saudis paying money to Saudis”.


More damaging still for the British government, the oil proceeds were not only used to pay for the jets but for arms from Egypt for the Mujahideen, the Taliban and Al Qaeda fighting the Soviet army in Afghanistan and arms from Moscow to drive Libyan troops from Chad. A biography of Prince Bandar, The Prince, explains that the Al Yamamah account was used to buy whatever they wanted off budget. The Saudis were paying the British government and the Bank of England to launder their own money and keep quiet about it


The British government and the culture of bribery

Over the years, there were constant rumours of corruption, with allegations that BAe had operated a £60 million slush fund to sweeten the deal and pay for extravagant hospitality for key middlemen. Successive governments maintained that no bribery was involved, although numerous officials and politicians in a position to know have admitted that bribery is endemic in the arms trade.


Denis Healey, a former Labour Defence Secretary in the 1964 Labour government, told the Guardian, “Bribery has always played a role in the sale of weapons. In the Middle East, people wouldn’t buy weapons unless you bribed them to do so—and that was particularly true in Saudi Arabia.”


Replace the words Saudi and Saudi Arabia with the words Thai and Thailand. This culture also exists in Thailand.

You have to remember that since the Suchinda coup in the 90's, the military's influence has been on the decline and its budget had shrunken significantly--until the last coup, that is.
And the way generals make their money for their Mercedes, their mia nois, their golf clubs, their mansions is through a corrupt procurement process.

What happens is that a middleman introduces the deal to a general. An upfront gift is made to the general making the decision in order to grease the wheels. The deal doesn't necessarily have to get through for the general to make some money. If the deal does go through, the invoice is beefed up to cover up for the cost of the bribes, and the Thai tax payer ends up footing the bill.

As has been pointed out by Bangkok Pundit, the size of the military budget has increased significantly since the coup.

I have no doubt that the coup has more to do with the generals recycling the tax payer's money into their own pockets than national security or Thaksin's corruption.

6 comments:

fall said...

So now the government want to sign MoU...(sign)...

Comparing this last minute deal to BKK fire truck&boat scandal, that deal become minute (nudge-ASC-nudge). But it seem the media just too willing to play dumb and ask no question here, nor give the same one week news coverage reporting.
May be the corruption had actually ingrain in the culture that questioning it is taboo?

Dave said...

Eh. The Gripen deal is a Swedish government to government sale.

Saab is not involved. And BAE is not even part of Gripen sales any more. So cool it with the allegations.

Thailand buy jets and awacs directly from the Swedish military. Airplanes that has already been ordered by Sweden.

(Sweden ordered too many)

Fonzi said...

Dave-

Thanks for the info.

Now please send me a link to this information so I can verify it.

Dave said...

fonzi,

I think most international media has mentioned it..

"Sweden's Defence Materiel Administration (FMV) says it will now begin negotiations with Thailand on the government-to-government deal."

http://www.flightglobal.com/Articles/2007/10/17/218705/sweden-to-renew-gripens-as-thailand-selects-swedish-fighter.html

http://www.defensenews.com/story.php?F=3118855&C=airwar

Fonzi said...

Dave-

Thanks for the links.

However, that doesn't clear up the dodginess of the deal.

According to FMV website:

From the beginning it was not planned to export Gripen. As the development progressed, more and more details about the aircraft became known through foreign contacts and media. As a result of the spread of information about the project, at the beginning of the 1990s, inquiries began to come about having presentation about Gripen for different countries’ air forces and others. Together with that the first foundation stones were laid to give public authority support to the marketing at FMV as well as the Armed Forces; the so-called consultation role was then introduced.

A contract was drawn up in 1995 about collaboration between Saab and British Aerospace about developing and marketing an export version of Gripen. At the same time a contract was also drawn up between FMV and the British Defence Export Service Organisation (DESO) part of the Ministry of Defence in support of the industry's marketing efforts.

Before purchasing a new aircraft for the Air Force the government required that the industries behind the JAS 39 Gripen formed themselves into one business. For the purchase of aircraft, this was a completely new way of working as FMV had previously purchased separately with many different partners and was itself responsible for the development of sub-systems.

With a 20% ownership each they formed the Industrigruppen JAS (IG JAS) in the autumn of 1982. Even if ownership of IG JAS is equally divided, the value of each share in respect of the delivered product is divided as follows:

* Saab AB, Gripen 66 %
* Volvo Aero Corporation AB 14 %
* Ericsson Microware Systems AB 11 %
* Ericsson Saab Avionics AB 6 %
* Celsius Aerotech AB 3 %

Many components, equipment and subsystems in Gripen come from foreign subcontractors. The countries involved are the USA, Great Britain and France. Nevertheless, the most important expertise is in Sweden and therefore from a quality points of view the most important element, that is to say, integrating everything into one complete aircraft system.

On 12th June 1995 Saab and the then British Aerospace (now BAe Systems) signed a contract to collaborate over Gripen. Together both companies would market, adapt for export, manufacture and provide product support for the JAS 39 Gripen in the export market. The work was coordinated in a Joint Venture Company, Saab-BAe Gripen AB. As part of the collaboration a joint effort began with the aim of developing an export version of Gripen. That means that the aircraft has a basic design, which can later be adapted to different users' specific requirements.

There seems to be a collaborative business relationship between the Swedish government, Saab/BAE systems and the exporting of the Gripen fighter.

In every procurement contract with Saab/BAE regarding the Gripen, there has been an investigation concerning corruption and bribery.

Dave said...

The only Gripen sale involving BAE is the south african one.

All the others is gov-2-gov deals by the FMV.

Since 2003 BAE is no longer part of Gripen International. And has reduced its shares in Saab AB from 35 to 20%. They have no men in the Saab executive board.

BAE is selling a competing product called the Eurofighter and as they held dual interests Saab decided to cut them off in 2003.

Allegations relating to gripen is in much older BAE/Tony Blair campaigns that never resulted in deals. The South African deal is investigated only on the BAE side concerning a large weapons package, There's no allegations or investigation against the subcontractor SAAB for Gripen jets.

The tender in the Czech republic 2001 is under investigation but this tender is a different one from the 2003 tender which saw FMV sign a deal with the Czech republic.

Sorry but you're not informed enough and should not be making unfounded allegations tbh.