Swiss scandal over suspected fraud at defence firm

Swiss scandal over suspected fraud at defence firm
by AFP Staff Writers
Zurich (AFP) Feb 25, 2025

The state-owned firm which maintains Switzerland's military equipment has become mired in a suspected fraud scandal, further weakening a defence ministry already besieged by criticism.

The Swiss Federal Audit Office (SFAO) published three reports late Monday implicating Ruag MRO in wrongdoing.

One audit concerned a former executive who allegedly sought to line his own pockets by reselling spare parts for Leopard tanks, with the support of a German intermediary.

Criminal proceedings are already underway in Germany.

"The potential financial damage from the cases known to date could be in the double-digit millions" of Swiss francs, the audit office said.

In the other two reports, the SFAO said the company "may have used spare parts from the consignment warehouse owned by the armed forces for its own business with third parties, without authorisation".

The audit office also criticised a "lack of transparency" at the firm.

Ruag MRO ensures the maintenance of Swiss military equipment, including combat aircraft.

Swiss parties from across the political spectrum voiced alarm, with the Socialist Democratic Party releasing a statement Tuesday calling for a parliamentary inquiry into why defence minister Viola Amherd allegedly "turned a blind eye despite clear indications of serious failings".

They also demanded more information on why the head of the army, Thomas Sussli, and the head of the intelligence service, Christian Dussey, had recently handed in their resignations -- information only revealed Tuesday by the Swiss daily newspaper Neue Zurcher Zeitung.

Their departures will cause further trouble for the incoming defence minister, with Amherd due to step down next month after six years at the helm.

Amherd, from The Centre party, has been criticised by the conservative right, who accuse her of having undermined traditional Swiss neutrality during her tenure.

Several major contracts for the renewal of crucial equipment have also been delayed and become more costly.

"It was right to open an investigation as soon as the irregularities were revealed," Amherd said in a statement, recalling that she had commissioned the audits herself.

In 2019, a whistleblower had contacted the defence ministry with information about suspicious activities.

Ruag MRO's new president Jurg Rotheli, who took over in January, branded the "serious organisational errors" as "unacceptable" in a statement released Tuesday.

The company said personnel changes and an external compliance audit were already under way.