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Soldiers in protective masks at the flag drop in June this year. Image: keystone
How a Million Dollar Army Deal for Protective Masks Failed Due to a False Report
In April, the army pharmacy was about to buy millions of protective masks at comparatively low prices. Then UBS got in the way.
The army pharmacy bought protective masks from some young entrepreneurs around the SVP Zurich in March 2020 for CHF 9.90. Observers estimate that the youths earned at least 7 francs per mask. Because in April 2020, when the market had already recovered and products were more expensive in China, these masks cost, carefully calculated, around three dollars, including transport.
The story with the Emix masks is not the only strange process that happened at VBS in those first few months of Covid.
It is a commercial company based in the canton of St. Gallen that wanted to deliver several million protective masks to the Swiss army in April 2020.
22 million masks for 25 million euros
On April 2, the company offered protective masks to the army pharmacy through a businesswoman from the canton of Zurich who had also worked with Armasuisse.
On April 3, the army pharmacy requested a formal offer, three days later a “Letter of Intent” was signed: delivery of 2 million FFP2 masks and 20 million surgical masks for a total of 25 million euros. The FFP2 masks were estimated at 4.50 euros each; those were the masks of the same type for which the DDPS had paid 9.90 francs two weeks earlier.
On behalf of the DDPS, signed senior field physician Andreas Stettbacher and Claude Meier, the army chief of staff. At that time, the army pharmacy was still subordinate to them. On April 7, the DDPS made an initial payment of 7.5 million euros to a UBS account, the company prepared the acquisition of the masks from various sources and the transport to Switzerland. Airplanes were booked and transport companies commissioned.
UBS suspects a fraud attempt
Then things suddenly stalled. Immediately after the millions were paid, UBS apparently received an “anonymous call” expressing a “suspicion of money laundering.” According to the details of the subsequent report on money laundering, the company now suspects that the call must have come from the environment of the procurement coordinator, Brigadier Markus Näf. Näf, who used to be a UBS banker, had been the strongman behind the army pharmacy who bought the masks since March.
A UBS employee told a company representative that the documents submitted for the transaction had been downloaded from the Internet. The bank apparently suspected a fraud attempt.
The trading company and the businesswoman who worked for her did their best to clarify the situation. On Easter Saturday, April 11, they answered UBS’s questions about suppliers and the supply chain, submitted documents and demonstrated that they have experience in public procurement.
Even the intervention of one of UBS’s best clients did not help
But that didn’t help, not even a personal intervention by a wealthy German UBS client, who had his financial advisor review the deal and then even wanted to help finance it and was unsuccessful.
On Easter Tuesday, April 14, UBS rejected the $ 7.5 million federal transaction without further inquiries and on the grounds that the information was incomplete and implausible. The Romanian company that was supposed to deliver some of the masks was apparently a fraud. UBS demanded that the 7.5 million be returned to the federal government, which was done immediately.
What’s going on? One thing is for sure: in April 2020, a power struggle was fought over the army pharmacy. Brigadier General Näf had been the procurement director since March, previous decision makers ended up on the sidelines, including army pharmacist Heinz Moll. The Army Pharmacy was subsequently withdrawn from medical services at the Army General Staff in May 2020 and was added to Major General Thomas Kaiser’s logistics base. Kaiser is considered the close enemy of Division Major Oberfeldarzt Stettbacher, the head of the medical services.
The “personal sensibilities” were decisive
A report from the November 2020 VBS inspection confirms this finding. The change in the subordination of the army pharmacy was “shaped largely by personal sensibilities” and not “by strategic considerations.” The pharmacy is now being “converted by a medical service provider into an army logistics center without an overall strategic concept.”
It seems clear that the “old” army pharmacy team wanted the deal, but the new apparently did not. On April 16, the delivery company discussed various options with the folks at divisional partner Stettbacher, including “Payment after delivery and approval from our quality managers,” as the DDPS later stated. This is how you wanted to handle it later.
Then something happened that, for those responsible for the company, was the result of her not giving up. On April 17, UBS sent a report to the Swiss Money Laundering Reporting Office (MROS). Reason: suspected fraud. The company does not want to supply masks. This started a criminal case that made it impossible for the DDPS to purchase masks from the trading company. The deal was dead, neatly torn down.
On April 18, procurement coordinator Näf mentioned the supplier company’s “compliance case” for the first time in his status report to the army chief. So it was clearly in the picture of the MROS report. The army pharmacy, on the other hand, was apparently not in the picture because it was ready to remove the masks on April 20. A first partial delivery from China was then prepared, as the company announced to the federal government on April 26. According to the company, on April 30 the first delivery was made via Germany by truck. However, the army pharmacy refused to accept the merchandise, although acceptance had been promised shortly before.
On April 24, MROS forwarded the money laundering report to the St. Gallen prosecutor. A Romanian company was listed as a supplier, the corresponding document had “counterfeit characteristics”. The company is suspected of having “never been willing” to sell protective masks, the prosecutor later summarized.
House searches also did not reveal any evidence of fraud.
The machinery started up. On June 5, 2020, the Zurich prosecutor’s office, which had taken over the case, searched the businesswoman’s home at 6 a.m. It was a shock to the woman, who then required medical treatment. The UBS report was a hit in the water. The procedure was suspended on October 27, 2020. There is no “evidence” that the masks were not delivered.
The courier company now believes that they deliberately wanted to turn them off. On the train of the struggle for power over the army pharmacy. Or to benefit other companies that came later. Or because the DDPS, who knew everything about the company’s supply chain, wanted to buy directly from its suppliers.
The delivery company is still trying to do business with the DDPS, but is discouraged and discouraged. Meanwhile, he has filed criminal charges against UBS and those responsible for VBS. Brigadier Näf denies having anything to do with the case. “The army pharmacy, and I, too, only found out about the problems when funds were blocked and the case hit my desk. It had nothing to do with it before. “Näf says that VBS would gladly have taken the company’s masks” if the quality had been right and the price was right. We consider the supplier to have a good reputation, they had already worked with Armasuisse and we even made an advance payment. ” But due to the blocking of funds, the company was unable to meet delivery deadlines and, subsequently, the goods ceased to be of interest to VBS in terms of price.
Regarding the bank client’s confidentiality, UBS declined to comment on the case on demand.
SP National Advisor, Roth: “A bad story”
Solothurn SP National Councilor Franziska Roth has been closely following the operations at the army pharmacy for months. Now he says: “It can’t be that a previously proven supplier to the Swiss army is suddenly involved in such a bad story because obviously there is a power struggle over the army pharmacy. The VBS reports on the procurement of masks and the army pharmacy raise more questions than they answer. The events must be examined by Parliament, we will also present proposals. “
It is the presumption of innocence. (aargauerzeitung.ch)
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