Newsletters
Israel's largest defense company, Elbit Systems, has been suspended by NATO's procurement agency amid a major corruption scandal involving allegations of bribery and sanctionable practices, according to documents obtained by investigative media outlet Follow the Money (FTM) on Monday.
The NATO Support and Procurement Agency (NSPA) suspended Elbit Systems and its subsidiary Orion Advanced Systems on July 31.
The suspension followed the emergence of serious allegations indicating potential engagement in corrupt practices by the Israeli company.
"The vendors' suspensions follow the emergence of serious allegations indicating that it is likely the suppliers engaged in sanctionable practices, including irregularities in the award of contracts," according to a letter by a senior manager at NSPA reviewed by investigative media sources.
The suspension bars Elbit from competing for new tenders, and several of its ongoing contracts are on hold.
The NATO Support and Procurement Agency is at the center of a wide-ranging graft scandal, with current and former staff under investigation for bribery. Several suspects were arrested in May during police raids across seven nations, including Belgium and the United States.
Defense firms are alleged to have paid bribes worth potentially millions of euros to secure contracts through the NSPA to supply the military alliance and its 32 member states.
Probes into corruption at the NSPA are ongoing in Belgium and Luxembourg, where the agency's headquarters are located. Two probes by U.S. authorities were suddenly and inexplicably dropped in July, raising questions of political interference.
An Italian citizen identified as Eliau E. is wanted internationally for his alleged role in bribing NSPA staff. Belgium's Federal Public Prosecutor's Office confirmed that an international arrest warrant had been issued against Eliau E. via Interpol on Sept. 30.
"The 60-year-old is suspected of bribery and participation in a criminal organisation. He has not been arrested and may be travelling under a false identity," according to people familiar with the case.
Although there is no public information directly linking Eliau E. to Elbit, individuals close to the investigation say that he plays an important role as a consultant for the company. Elbit itself is currently not being investigated.
Eliau E. is the owner or director of several consultancy firms in the defense sector: Elar Systems Corp in the United States, Eral Systems UAB in Lithuania, and Arelco Europe Management Consultancies, registered in Greece.
Elbit is Israel's largest arms manufacturer, with a 2024 turnover of almost $7 billion.
The Haifa-based company, which makes drones, tanks, and ammunition, among other military equipment, ranks 25th on the list of the world's 100 largest defense companies compiled by the Stockholm International Peace Research Institute (SIPRI).
Over the last decade, Elbit has sold tens of millions of euros' worth of military equipment to NATO, including ammunition, night-vision goggles, and anti-missile systems for aircraft. The total value could be far higher, as many military contracts and the sums of money involved are never made public.
Several NATO contracts that had been awarded to Elbit are affected by the suspensions, meaning the supply of several member states' armies is disrupted.
Affected contracts include ammunition for truck-mounted howitzers, mobile rocket artillery systems, and defense systems for military aircraft and helicopters. Contracts for explosive detonators from Orion Advanced Systems have also been frozen.
Other contracts awarded to Elbit that have no connection to the alleged corruption are still being carried out, according to people familiar with the matter who spoke to the investigative media outlets.
A spokesperson for Elbit said the company was unable to comment on the allegations. "The company maintains a comprehensive compliance program and operates in full alignment with industry standards," the spokesperson said.
Two people close to the investigation say that Eliau E. was in close contact with Guy M., the key suspect in Belgium's investigation. Guy M. is a former Belgian defense official and ex-NSPA employee who started working as a consultant after leaving the agency in 2021.
Guy M. was arrested at Brussels Airport on May 12 on suspicion of being part of a criminal organization, corruption, and money laundering. The 60-year-old spent about six months in custody before being released last month with an ankle monitor.
Belgian investigators estimate that Guy M. handled bribes worth a total of €1.9 million ($2.21 million). His lawyer, Pieterjan Dens, previously stated that Guy M. admits to many of the facts of the case but disputes the amount of the suspected bribes.
Responsible for helping governments and NATO itself to buy military equipment and acquire services, the NSPA's profile and portfolio have grown hugely since Russia's full-scale invasion of Ukraine in 2022.
The agency is projected to spend a total of €9.5 billion ($11.06 billion) on all of its contracts this year, a sum that has nearly tripled since 2021.
The NSPA provides supply and logistics support to NATO, its allies, partners, and other international organizations. The agency's activities primarily support NATO operations and exercises while managing the lifecycle of weapons systems.
The agency, which has approximately 1,500 personnel, is headed by American Stacy Cummings.
1 min read
4 min read
