in the back
A private jet for rotary club
Bribery, Issue 1464
geoff-hoon.jpg
Geoff Hoon, the former defence secretary, who became AgustaWestland’s international sales MD in 2011
A SHADY deal between Anglo-Italian helicopter maker AgustaWestland and one of Russia’s largest companies poses serious questions for former Labour defence secretary Geoff Hoon.

It was Hoon who infamously told undercover reporters in 2010: “I’m really looking forward to translating my knowledge and contacts about the international scene into something that frankly makes money.” And he quickly did just that, joining AgustaWestland as its international sales managing director in 2011.

In January 2015, AgustaWestland signed a $3.3bn “framework agreement” to sell 160 AW189 choppers to Russian oil company Rosneft. Around the same time, emails and documents in the Paradise Papers, obtained by Germany’s Süddeutsche Zeitung and shared with the Eye by the International Consortium of investigative Journalists, show that a little-known middleman for AgustaWestland bought a £7m private jet for use by a key Rosneft executive.

‘Red flags’
In August 2014, Russian arms dealer Mikhail Alenkin had contacted Appleby, the law firm whose business was laid bare in the Paradise Papers, for help in tax-efficiently purchasing the Bombardier Global 6000 private jet (see Eye 1457). When Appleby looked a little closer, it found a number of “red flags”, including an account at FBME, a dubious Latvian bank at the centre of several money-laundering scandals. Alenkin claimed that in two years he’d earned $13m in sales commissions from Russian company Exclases Holdings Ltd, the sole distributor of AgustaWestland helicopters in Russia and the former Soviet states.

A list of passengers supplied by Alenkin to Appleby showed that chief among them was Eduard Khudainatov, chairman of Independent Petroleum Company (IPC), a Rosneft subsidiary. Four months after Alenkin contacted Appleby, the multi-billion-pound AgustaWestland-Rosneft deal was concluded.

When a boss from the company placing a major order is also getting to use a supposedly unrelated privately purchased jet, things look even more suspicious. By the time the deal went through, Hoon (who incidentally had also approved Ministry of Defence spending with Agusta) had already been forced to answer allegations of bribery on sales in India, which in 2013 he told an interviewer had “absolutely no substance”. There was “no truth” in the story.

AgustaWestland executive Giuseppe Orsi was convicted of bribery by an Italian court three years later, although this was overturned on appeal last month. But doubtless all was above board in Russia.

More top stories in the latest issue:

OUR DUTIFUL LAUNDERETTE
To the delight of McMafia types, the government resists an amendment that would give the Sanctions and Anti-Money Laundering Bill sharper teeth.

SYMPATHY FOR THE DEVIL
Alexis Jay, chair of the mega-inquiry into child sex abuse, speaks to a conference where some delegates believe in the debunked idea of Satanic ritual abuse by paedophile networks.

TRUE LICE
Scotland’s fish farmers will at last publish data about sea lice and salmon deaths, on a farm by farm basis, the industry promises a committee of MSPs.

OFSTED, OFF MESSAGE
A decision in the high court has made it easier for schools to oblige Ofsted to sit on unflattering findings in its inspection reports if the schools don’t like them.

PRIVATE SHAME
Two more damning official reports confirm that privatised probation services fail both offenders and the public.

PAIN IN THE ASSESSOR
Angry MPs slate the enormous human costs of bungled disability benefit assessments carried out by the likes of Crapita, Atos and Maximus.

PARK HOMES PROTECTION
Park home residents are furious as MPs on a parliamentary group meant to protect their rights appoint the site owners’ trade body as their secretariat.

HUNGRY VULTURES
PwC, now ‘feasting on the carcass’ of Carillion, was paid nearly £1m to advise its pension trustees. And we all know how that turned out…

ALL ABOARD THE MONEY-GO-ROUND
Creation of a new school-within-a-school in Chester reveals a crazy system that throws cash at multi-academy trusts while penalising council tax payers.

BEATING THE SYSTEM
The inquest into the death of Sean Benton at Deepcut army barracks hears how a former recruit told police he was part of the ‘respirator gang’ of trainees in gas masks who subjected Sean and others to terrifying beatings.

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Private Eye Issue 1463