An independent parliamentary committee said Thursday it was launching a probe of the Bellasi case, which has developed from a fraud case into an intelligence scandal, amid allegations of a secret army and the discovery of an arms cache.

An independent parliamentary committee said Thursday it was launching a probe of the Bellasi case, which has developed from a fraud case into an intelligence scandal, amid allegations of a secret army and the discovery of an arms cache.

Ways and Means Committee president Bernhard Seiler told a news conference in the capital Berne that the investigation would try to find out whether the defence ministry’s financial and administrative control mechanisms were really working.

The effectiveness and current methods of background checks for staff working in the ministry’s intelligence unit are also to be examined, he said.

Seiler added that the probe by the committee – which is not identical with the Ways and Means Committee, is autonomous, has the right to call witnesses and can view secret documents -- should be completed by the end of November.

Bellasi, an intelligence officer and former accountant in the ministry, is under arrest and is being investigated for allegedly stealing SFr8.65 million ($5.8 million) by doctoring the accounts and pocketing financial advances for military refresher courses which never took place.

Swiss Defence Minister Adolf Ogi on Wednesday ordered a thorough screening of the military’s financial transactions in order to avoid a repeat of the scandal.

The fraud case took a different direction with the recent discovery of an arms cache allegedly set up by Bellasi in Berne.

Bellasi’s lawyer claimed the weapons were part of a bigger scheme to set up a secret intelligence unit and finance it with diverted ministry funds.

Bellasi pointed the finger at the defence ministry’s intelligence chief Peter Regli, who in turn dismissed the allegations as a web of lies.

Regli and several other senior figures in the unit have all been suspended pending the investigation, which also involves the Federal Prosecutor’s Office.

The committee’s probe announcement came after its members held two days of talks with Ogi, Finance Minister Kaspar Villiger and senior officials in the defence and finance ministries.

Peter Tschopp, a member of the Ways and Means Committee, said after those talks that it appeared "very unlikely" that Bellasi really did get the order to set up a secret intelligence unit.

From staff and wire reports.

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