The reports add weight to claims by Dino Bellasi, the man at the centre of the affair, that he was organising a secret private army. The head of the secret service, Peter Regli, the chief of staff, Jean Denis Geinoz, and the head of strategic intelligence, Fred Schreier, have been suspended from their posts pending an inquiry into whether they fraudulently used defence department funds to set up a secret army.
The case first came to light two weeks ago when Mr Bellasi, a former accountant in the Swiss defence department, was arrested on charges of embezzling pounds 3.7m. This was already the biggest fraud case in the history of the Swiss government: Mr Bellasi had apparently been withdrawing large sums of cash directly from the Swiss national bank by submitting bills for non-existent troop battalions.
But when Swiss police began to question him, they found he had an even more outrageous tale to tell. Mr Bellasi was also an agent in the intelligence service, and claimed he had taken the money to buy weapons for a secret security force on the orders of his boss, Mr Regli. To prove his story, Mr Bellasi led police to a warehouse in the Berne suburbs, where over 200 weapons were found.
The SonntagsBlick newspaper reported yesterday that Mr Bellasi had organised military manoeuvres with selected soldiers from the intelligence service equipped with Kalash- nikov assault rifles and high-precision weapons from his own stocks. All those involved were sworn to secrecy. One exercise took place in 1997 in Andermatt, the nation's military centre in the central Swiss Alps. But it was not an isolated incident, the paper reported.