Israel’s largest defence company, Elbit Systems, has been suspended by NATO’s procurement agency amid a major corruption probe, according to a report by Follow the Money and its media partners.
Elbit Systems Suspended Amid NATO Corruption Scandal
The NATO Support and Procurement Agency (NSPA) is at the centre of a wide-ranging graft scandal, with current and former staff under investigation for bribery. Several suspects were arrested in May in police raids across seven nations, including Belgium and the U.S.
Defence 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.
Documents show that Elbit – a leading NATO supplier – was suspended by the NSPA on July 31. Several of its ongoing contracts are on hold, and the firm is barred from competing for new tenders.
A key figure associated with Elbit – 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 September 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.
Probes into corruption at the NSPA are ongoing in Belgium and Luxembourg, where its headquarters are located. Two probes by U.S. authorities were dropped in July, raising questions of political interference.
Responsible for helping governments and NATO itself to buy military equipment and acquire services, the NSPA’s profile and portfolio have grown since Russia’s full-scale invasion of Ukraine in 2022. The agency is projected to spend a total of 9.5 billion euros on all of its contracts this year, a sum that has nearly tripled since 2021.
‘Serious allegations’
Elbit is Israel’s biggest arms manufacturer, with a turnover of almost 7 billion dollars in 2024. The Haifa-based company, which makes drones, tanks and ammunition, ranks 25th on the list of the world’s 100 largest defence 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 aircraft anti-missile systems. The total value could be far higher, as many military contracts and the sums of money involved are never made public.
On July 31, the NSPA suspended Elbit and Orion Advanced Systems, one of its subsidiaries. According to a letter by a senior manager at NSPA, the suspensions follow “serious allegations indicating that it is likely the suppliers engaged in sanctionable practices, including irregularities in the award of contracts.”
Several NATO contracts awarded to Elbit are affected by the suspensions, disrupting the supply of several member states’ armies. Affected contracts include ammunition for truck-mounted howitzers, mobile rocket artillery systems, and defence 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. A spokesperson for Elbit initially 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. Following publication of this article, Elbit provided a statement defending its conduct, stating, “The company maintains that there were no irregularities in its conduct regarding any project with the NSPA.”
Consultants at the epicentre
Eliau E. is the owner or director of several consultancy firms in the defence sector: Elar Systems Corp in the United States, Eral Systems UAB in Lithuania and Arelco Europe Management Consultancies, registered in Greece. It is unknown whether these companies are implicated in the NSPA corruption scandal.
Eliau E. could not be reached for comment. Two people close to the investigation say that Eliau E. was in close contact with Guy M., the key suspect in Belgium’s investigation. He is a former Belgian defence 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 organisation, corruption and money laundering. He spent about six months in custody before being released last month with an ankle monitor.
According to a person close to the investigation, Eliau E. and Guy M. were introduced by Turkish citizen Ismail Terlemez, another ex-NSPA employee. He now heads one of Turkey’s fastest-growing defence companies, Arca, of which he is also co-owner.
Terlemez was also arrested in Belgium in May. The 43-year-old was due to be extradited to the United States, where a parallel investigation into graft in NATO tenders was underway. But when that probe was abruptly halted in July, the extradition request lapsed and Terlemez was let go. Terlemez did not respond to requests for comment.
Belgian investigators estimate that Guy M. handled bribes worth a total of 1.9 million euros. His lawyer, Pieterjan Dens, previously told FTM that Guy M. admits to many of the facts of the case but disputes the amount of the suspected bribes. Dens declined to comment for this article.
The latest findings come after leaked documents revealed internal turmoil at the NSPA, with senior officials accusing General Manager Stacy Cummings of favouritism, failing to investigate corruption, and undue interference in their work.
NATO and the NSPA did not respond to requests for comment.
NATO spokeswoman Allison Hart previously said it would be up to the NSPA’s supervisory board to probe any “allegations of workplace misconduct by the NSPA general manager.”
Elbit Systems response
After this article was published, Elbit Systems emailed the following statement:
“We were not removed or suspended from any NATO program, and no NSPA project has been halted.
Elbit Systems is not familiar with all the details cited in the article. To the best of our understanding, a broad investigation is currently underway, encompassing several companies with which the consultant referenced in the article was associated.
The company maintains that there were no irregularities in its conduct regarding any project with the NSPA. It is important to clarify that this matter relates to NATO’s procurement agency and not to NATO member states or to any particular state. […] The company has offered its assistance and will cooperate fully as required.”
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