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Bofors bribery: Following the national audit, Swedish police launched a separate investigation into Bofors bribery, which would have been illegal if payments were made to foreign officials. This investigation was terminated in late January 1988, following a trip by Indian Prime Minister Gandhi to Stockholm. Sweden claimed inability to track the payments through Swiss bank accounts after making a half-hearted request for Swiss assistance.

Indian inquiry: .The Indian government initiated its own parliamentary investigation into the possible use of payoffs to middlemen or government officials.

Singapore inquiry. Singapore--a key transshipment point in the Bofors saga--also launched a bribery investigation and charged Tan Kok Cheng, former general manager of Allied Ordnance Singapore, with accepting over $1 million in bribes from Bofors while working on behalf of Singapore's armed forces. (Bofors owned 40 percent of Allied Ordnance at the time of the transactions.)

MFA Demarche: In support of the ongoing police investigations, the Swedish Foreign Ministry requested its Embassies abroad to ask host governments for permission to inspect their arms inventories in an apparent effort to look for Bofors equipment that may have been delivered in as yet undetected diversions. (b)(3)

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Notable Sidelights

Beyond the diversions and investigations themselves, several other incidents may be related to the Bofors affair.

Algernon's death: War Materiel Inspector Carl Algernon--the customs official responsible for monitoring arms exports--died when he was struck by a subway train in January 1987. He had met 30 minutes earlier with Anders Carlberg, head of

Bofors' parent company. Nobel Industries. Algernon was a personal friend of former Bofors directors Claes-Erik Winberg and Martin Ardbo. Police believe he committed suicide, but accidental death and murder remain possibilities.

Did Iranians Murder Palme? US media speculated in March 1987 that Olof Palme was murdered by an Iranian hitman in retaliation for Palme's alleged suspension of an arms shipment to Tehran.

The media further contended that Algernon was killed because he intended to make public the illicit activities of Swedish arms producers and government officials. Swedish investigators consider this thesis unlikely, and it received little further notice until revived by US journalists in December 1987.

Press Activism: The US press article on the Iranian connection--written quickly in Sweden using local sources--embarrassed the Swedish press, which had failed to turn

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(b)(3) CONFIDENTIAL

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Approved for Release: 2017/09/13 C06141809

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