Parliament lacks effective oversight of defence spending, ERR says

Estonia’s parliament has limited ability to oversee how defence funds are spent, according to ERR’s current affairs programme Impulss, which examined confusion surrounding defence financing and oversight of taxpayers’ money.

Interviews with members of the Riigikogu’s National Defence Committee showed that oversight is difficult in a field where procurements and contracts may reveal military secrets to Estonia’s enemies. The programme interviewed retired Major General Meelis Kiili, a former Reform Party member, and Social Democrat Raimond Kaljulaid, both members of the committee.

Kiili and Kaljulaid said Parliament, which decides how funds are allocated, lacks substantive control over the transactions made with taxpayers’ money. They said this was also the case when MPs raised concerns and sought information, as in the current 70 million euro affair.

“If everything worked normally and according to the rules, members of the National Defence Committee should already have a very detailed overview of what has happened at the Ministry of Defence,” Kaljulaid said.

Kiili said the biggest problem was the weakness of the oversight mechanism.

“This system and these decisions are opaque. When we asked in the National Defence Committee for decision-making protocols and memorandums, they did not exist. They were not available. There are orders, but an order does not show the process,” Kiili said.

Kaljulaid said parliamentary oversight in Estonia was “very thin and weak”.

“If you look at Estonia’s parliamentary committees, how many employees they have and what resources they have to carry out any oversight, it is practically negligible,” he said. “The rights seemingly exist, but there are not enough people to exercise them.”

Kaljulaid said MPs should have the right to examine all the circumstances surrounding procurements and contracts funded with money collected from taxpayers and allocated to the Ministry of Defence through decisions by the Riigikogu.

Kiili said the shell procurement was not the only case in which members of the defence committee had limited powers. He referred to a case reported by Õhtuleht in May, in which the Centre for Defence Investment signed a 400 million euro framework agreement for loitering aerial attack munitions with what was essentially a shell company.

MPs began asking questions but have not yet received comprehensive answers, Kiili said.

“The concern is that in November a company was established with share capital of 1,000 euros. Its owner is a Turkish citizen. The company had no turnover and no employees. It was an ordinary shell company,” Kiili said.

He said the acting director general of the Centre for Defence Investment signed the framework agreement with the company on the last working day of January. The agreement had a total value of 400 million euros.

“To put it mildly, that is an unreasonable proportion. Even 4,000 euros or 400,000 euros would already have set off some kind of alarm bell for us,” Kiili said.

According to information available to Impulss, the framework agreement has not been activated and no money has been transferred to the company. The company’s Turkish owner told Õhtuleht that it qualified for the framework agreement because it submitted all the required documents and met all participation and qualification requirements.

Kiili said the issue remained that concerned MPs had not received comprehensive explanations for almost six months, even if the framework agreement was eventually used and everything worked as intended.