Defense ministry scandal widens as intelligence chief is suspended

A defense ministry fraud scandal is drawing wider circles in Switzerland as the country’s intelligence chief is suspended and political parties call for a swift investigation into allegations of weapons dealing and a secret army.

A defense ministry fraud scandal is drawing wider circles in Switzerland as the country’s intelligence chief is suspended and political parties call for a swift investigation into allegations of weapons dealing and a secret army.

Defense Minister Adolf Ogi (r) told a news conference Sunday that, what started out as a fraud and embezzlement case by a senior accountant in the ministry, had now grown into a full-blown scandal.

“The affair, previously one of the largest fraud cases in the history of the federal government, has spread incredibly and appears to assume a scale which we could never have dreamt of.”

Ogi said the key words were now “hidden arms,” “arms dealing,” “organised crime” and “secret army.”

The scandal focuses on Dino Bellasi, 39, a former defense ministry official who was arrested nearly two weeks ago on suspicion of fraud and embezzlement of SFr8.65 ($5.8 million) in advance payments by the Swiss National Bank.

The advance is normally used to pay for food, accommodation and the salaries of Swiss soldiers doing their military refresher courses. Bellasi, however, siphoned-off the money for several years and his alleged crime was not detected until very recently.

The fraud scandal took on another dimension on Sunday, when the Sunday newspaper “Sonntagsblick” reported that Bellasi claimed to have been ordered by his superiors to set up a secret army, including weapons.

Investigators found about 200 weapons and significant amounts of ammunition in a suburb of the capital Berne last week.

Ogi told the news conference that intelligence chief Peter Regli (l) had asked to be suspended earlier Sunday and that he had agreed. However, Ogi said he stood by Regli and considered him innocent until proven otherwise.

Regli rejected the allegations by Bellasi that he, Regli, had ordered the formation of a secret army.

“Bellasi has put out an enormous, grotesque web of lies,” Regli told the news conference. He also rejected media reports that Bellasi had access to highly sensitive intelligence documents and may have gotten hold of lists with the names of agents.

The political fallout was swift as government parties said the Bellasi affair was becoming a scandal of the largest proportions.

Social Democrat Party leader Ursula Koch demanded a parliamentary committee of enquiry to probe why in the small secret service department at the ministry with a staff of 130, superiors did not know what lesser officers were doing.

Others questioned the need for a Swiss secret service.

Bernhard Seiler, head of the parliamentary committee supervising the Defence Ministry, told Swiss television he thought it would have been impossible for a single man to have put together a cache of over 200 guns by himself.

From staff and wire reports.