Austrian arms lobbyist cleared in 'stinking' BAE trial

Count Alfons Mensdorff-Pouilly (left) gets some media interest as he waits at the courtroom for his trial on December 12, 2012 in Vienna. The colourful Austrian count was cleared on Thursday of laundering millions of euros (dollars) on behalf of British defence giant BAE Systems to win arms contracts in central and eastern Europe

British defence giant BAE Systems' alleged central and eastern Europe fixer was cleared on Thursday of laundering millions of euros (dollars) to grease palms and win arms contracts in the region.

The deal-broker, Alfons Mensdorff-Pouilly, was however given a two-month suspended prison sentence for the lesser crime of falsifying evidence, a court in Vienna ruled at the end of a high-profile trial.

"The whole affair stinks, but it doesn't stink enough," presiding judge Stefan Apostol said, calling the verdict "more than unsatisfactory" given the "morally questionable business practices" outlined.

Mensdorff, a colourful count, allegedly received 12.6 million euros ($16.4 million) from BAE between 2000 and 2008, which prosecutors charged was then used to slip to "decision-makers" in the Czech Republic, Hungary and Austria to buy military jets.

Even though the trial heard from witnesses testifying to Mensdorff receiving envelopes stuffed with cash, the court was shown "insufficient" evidence to prove that this money was then used to bribe people, the judge said.

The prosecution's case was weakened by the fact that BAE executives were not obliged to testify after the firm's controversial 450-million-dollar settlement with US and British authorities to settle this and other cases in 2010.

"It was lucky for you that the British didn't come (to the trial), that the case was abandoned and that evidence could not be firmed up," the judge said.

"Otherwise things could have turned out quite differently."

Prosecutors also lacked key witnesses such as Timothy Landon, another larger-than-life character implicated in a 1970 coup in Oman who helped get the count hired by BAE in the 1990s. Landon, who was married to Mensdorff's cousin, died in 2007.

Chief prosecutor Michael Radasztics said that BAE had "created illegal structures" and that by not testifying, had given the court "the finger".

The reason for BAE's no-show, he said, was simple: "Because there is no legal explanation for what happened and because everything on the charge sheet is accurate."

He said he would appeal.

In another high-profile corruption trial in Austria this week, former interior minister and European lawmaker Ernst Strasser was sentenced to four years in prison on Monday for bribery.

Strasser was secretly filmed by undercover journalists in 2010 offering to influence the drawing up of EU legislation for a fee of 100,000 euros per year.

The judge said that Strasser had greatly damaged Austria's reputation, rejecting his defence that he had thought the reporters were spies as "one of the most outlandish things I have heard in my 20-year career".