Holm says defence scandals do not threaten Estonia’s security

Recent scandals in Estonia’s defence sector do not pose a security threat to the country, Auditor General Janar Holm told ERR. He said that discussing problems publicly makes Estonia stronger.

“I know many countries where it is not possible to talk about such things. We can only become stronger from this,” Holm said when asked whether the scandals posed a security risk.

Holm nevertheless described the situation in the defence sector as concerning, saying several of the problems were systemic. He added that confusion increases as more money is allocated to the sector.

The National Audit Office found problems in 64 contracts of the State Defence Investment Centre, including the receipt of goods and the conclusion of contracts. “Wherever we looked, there was some kind of problem,” Holm said.

He said the Defence Forces need a more digital system for tracking their stocks, as ordinary inventories are not sufficient.

Defence Forces need accounting rules

According to Holm, the Defence Forces must begin following accounting rules like other Estonian state institutions. This would give the Defence Forces a quick and up-to-date overview of their assets and their locations, while also allowing the public to see whether money allocated to defence has reached its intended destination.

Because of the confusion in the accounts, the National Audit Office encountered a situation this year in which the Defence Forces and the Ministry of Defence said they had 1.2 billion euros worth of stocks. The audit office cannot confirm whether that figure is accurate because of the accounting problems. “It seems to us that it should be somewhat more,” Holm said.

Holm said confusion creates favourable conditions for someone with bad intentions to take something at the state’s expense. Authorities are now trying to establish what should exist in the first place so they can determine what is missing.

He said there was also confusion surrounding the shell deal and that the information could not be clearly traced.

Without reliable information, it is difficult to identify those responsible, Holm said. The parties involved have been blaming one another.

“From the National Audit Office’s perspective, this is what is often treated as bureaucracy, namely documentation,” he said.

Holm said the National Audit Office had also told the State Defence Investment Centre that information must be traceable. State secrets have contributed to the confusion, he said, but clarity should eventually emerge.

He added that primary responsibility always lies with the institution that enters into a transaction. In this case, the main responsibility rests with the head of the State Defence Investment Centre who signed the contract.