The shell company set up to carry out Sweden’s secret plans to build a weapons factory in Saudi Arabia was financed with cash borrowed from the country’s military intelligence agency, according to a new report.
The company, Swedish Security Technology and Innovation (SSTI), was reportedly set up by the Swedish Defence Research Agency (Totalförsvarets forskningsinstitut – FOI) in order to oversee the construction of a factory for the maintenance and upgrade of anti-tank missile systems.
In order to keep the company secret, FOI needed cash in order to set it up, according to Svergies Radio (SR), which first reported on the secret plans for the Saudi weapons plant earlier this month.
However, FOI was unable to procure the necessary cash on its own, but instead had to rely on help from the Swedish Military Intelligence and Security Service (Militära underrättelse- och säkerhetstjänsten – MUST).
MUST provided the cash to FOI in the form of a loan, according to SR.
Sweden was in talks with Saudi Arabia about providing a state of the art public security system, according to information in a secret letter sent from the Swedish minister for trade and revealed by daily Expressen.
The letter, which was sent from Swedish minister for trade Ewa Björling to Prince Mohammed Nayef, dated September 17th 2009, was revealed and published on Tuesday by the newspaper.
The Saudi dictator, according to the paper, wanted to buy “several million kronor” worth of cameras, digital equipment, and an underground control centre system to watch over his own people.
In the letter, Björling notes the advanced technology of Swedish security systems, and how the two countries can continue to work on their “strategic partnership” in the future.
Swedish government ministers have been keen to pass the buck when confronted by Expressen regarding the claims, with all signs seemingly pointed towards the Ministry for Foreign Affairs and The Swedish Fortifications Agency (Fortifikationsverket).
However, spokespeople for both groups have not confirmed or denied the possible collaborations with Saudi Arabia.
According to the letter, published in full today, Björling wrote:
“The responsible Swedish government agencies are prepared to provide an initial study regarding civil public security utilizing the full knowledge gained from Sweden’s experience along with its advanced and proven technologies”.
Sources close to Expressen have indicated that this co-operation was to involve intense civilian monitoring by the regime, allowing them to be able to “deploy heavily armed domestic troops” if deemed necessary from security monitoring.
An initial workshop has already taken place in June of 2009 relating to the security collaboration, according to Björling’s letter.
The plans were met with heavy criticism from the opposition, including Left Party spokesperson on foreign policy, Hans Linde.
“I think it is unacceptable to be engaged in this type of cooperation with a country like Saudi Arabia. This would be actively providing one of the worst dictatorships with tools to monitor and thereby repress its own people,” he told the paper.
Swedish Armed Forces (Försvarsmakten) spokesperson Erik Lagersten confirmed for the radio station that money was transferred to FOI, but claims that MUST didn’t know that the funds were to be used to set up the shell company.
“That’s something for the preliminary investigation to reveal,” he told SR, referring to the preliminary criminal investigation launched by prosecutors last week in order to determine whether the secret Saudi weapons deal may have violated the law.
FOI’s own investigation has revealed information leading the agency to believe “there are suspicions that a crime may have been committed”, it said in a statement, prompting FOI head Jan-Olof Lind to report the incident to prosecutors.
As FOI is a state agency, it isn’t allowed to start any companies without the approval of the government – something which, according to SR, did not occur in the case of SSTI, which was started in 2009.
The company was launched as part of what is referred to in confidential documents reviewed by SR as Project Simoom, a project started by FOI in 2007 with the aim of helping build an advanced weapons plant in Saudi Arabia.
At the time of SR’s revelations, SSTI CEO Dick Sträng, who is also a high ranking official at FOI, refused to divulge how the company was funded.
“I refuse to answer that question,” he told SR.
“I can’t answer it without lying.”
SR has subsequently learned, however, that SSTI was financed by FOI and that the start-up capital came in the form of a cash loan from MUST.
On Tuesday, FOI head Lind is scheduled to appear before a parliamentary committee to answer questions about his agency’s connections to SSTI and its involvements in the Saudi arms plant construction project. Source