Middleman denies enormous profits on controversial CASA deal

The Omnipol company, which is at the centre of a scandal involving allegedly overpriced military transport planes, has defended itself, saying its profits from the deal were normal and amounted to far less than police and the media have asserted. Meanwhile, a parliament committee has begun examining the evidence to determine whether to give up MP and former defence minister Vlasta Parkanová, who the police want to prosecute over the deal.

Michal Hon, photo: CTK

According to the police, the CASA transport planes that the Czech Defence Ministry purchased from Spain in 2009, were overpriced by a tremendous 658 million crowns, costing the Czechs more than double what the Polish or Portuguese paid for the same aircraft. On Tuesday the weapons manufacturer Omnipol, which mediated the deal for the government, held a rare press conference to give their side of the story. Director Michal Hon told Czech Radio that after banking and exchange rate fees and taxes, the company earned only 85 million crowns on the deal. As for comparisons with other countries he had this to say:

“This talk of normal prices paid from public funds elsewhere and which army bought similar planes is completely misleading. No one has published any information about the financial sources of those deals or what planes with what equipage were purchased. I can’t comment on it because I haven’t seen the contracts, and I doubt that the people who are talking so loudly about it have seen them either. I can say for example, that from public sources I found out that the Finnish army bought two planes for 45 million euros, and another two of the same type for 112 million.”

CASA plane

The sum of 85 million corresponds to a gross profit of roughly 3% of the entire order. The police case appears to rest on an estimate of 658 million, compiled by the US company American Appraisal. According to Omnipol and others, that estimate is necessarily misleading as it is impossible to assess the standard price of such a piece of military technology – a view contested in turn by American Appraisal and by defence analyst Jaroslav Štefec, who told Czech Television the following:

“The price paid definitely does not correspond to the price of three aircraft. Two years, I think, before the purchase, the C-295 M version of the plane was being offered on the CASA website for about 22 million dollars. It is not true that the price cannot be determined from public sources… I also happen to know that the CASA company made the Defence Ministry a specific offer that was around 23 million dollars per plane before the company Omnipol and the heads of the Defence ministrygot involved in the deal."

Vlasta Parkanová

All told, the government of Mirek Topolánek spent roughly 3.5 billion for the four planes in the closing days of its tenure. Michal Hon says that defence minister Vlasta Parkanová, who the police now wants Parliament to give up for prosecution, was never involved in the negotiations, and that Omnipol’s public defence has nothing to do with protecting her, but with protecting itself from calls to return nearly 700 million crowns it “never stole and never possessed”.

Meanwhile, Wednesday saw the first meeting of the Parliamentary committee on immunity, which requested the investigation file on Vlasta Parkanová. Highlighting the sensitive nature of the case, agreed to give the committee the file for only three days and on the condition that officers guard the door to the room in which the MPs study its contents.