Corruption In Defense: The Costs And What NATO Can Teach Us

Corruption In Defense: The Costs And What NATO Can Teach Us

Corruption refers to the abuse of entrusted office for private gain. When it comes to the military, procurement is the process cited by defense officials that is most susceptible to corrupt practices

By Apostolos Fasianos

A recent publication of ‘Der Spiegel’ referring to illicit deals between a German submarine construction company and some officials in Greece has raised public concerns over corruption in the Greek defense sector[i]. A prosecutor is currently investigating the case of alleged bribes handed out to the relevant authorities for the sale of four submarines Type U214 class and the upgrade of three older ones, in 2000-2002.  Although the case is still not resolved, the problem of defense corruption seems to be endemic in Greece, a country ranked as one of the most corrupt in Europe, according to Transparency International. The need to tackle corruption practices in order to achieve more efficient use of public funds is urgent, considering that Greece is currently under an IMF structural adjustment program, struggling to reduce its deficits and bring its sovereign debt to sustainable levels.

Corruption refers to the abuse of entrusted office for private gain. When it comes to the military, procurement is the process cited by defense officials that is most susceptible to corrupt practices[ii].  Defense procurement is the periodic purchase and maintenance of the country’s defense capabilities to ensure national security and stability. It is a process that requires considerable amounts of public funds. As procurement involves large technically complicated contracts, evaluation and reviewing becomes a hard task for non-experts, thus, the degree of transparency in the process is lessened[iii]. In addition, the reference to secrecy limits the number of potential bidders, or even reduces them to one single source[iv]. The combination of insufficient scrutiny, minimized competition, the administration of vast sums of money and the temptation of the main beneficiaries to gain illicitly from defense procurement, often leads to high corruption risks. Although, secrecy and low competition are justified on the grounds of international security, they are often exaggerated. Of course, confidentiality is to an extent necessary, but excessive secrecy leads to lack of transparency allowing for corrupt practices in the sector.

High levels of corruption in defense are not only detrimental to the good functioning of the military, but also to a nation’s overall development efforts. The major symptoms of a corrupted defense sector may be the following:

Firstly, defense corruption challenges efficiency of the military. As public resources are not used in line with the national military budge, a country is subject to a lower quality of defense capabilities and sometimes is unable to engage the armed forces in operations that enhance the stability of the nation and its allies. On the worst-case scenario national security may be threatened. Moreover, in the context of some developing countries characterized by poor governance, highly corrupt defense sectors are vulnerable to the creation of crime mechanisms and piracy groups[v].

Secondly, corruption in defense may hinder the economic conditions of the country and its development efforts.  As scarce resources are diverted, the government is forced to either increase its spending on defense, or to be content with a lower quality of the military units. On the one hand, increasing spending in defense could threat the country’s economy, especially in a period of financial turmoil. On the other hand, reduced defense capabilities may threat the national security and stability of the country. Furthermore, as the public expenditure for defense is increased due to inefficiencies, valuable resources are diverted from other productive public investment such as health and education.

Thirdly, corruption undermines the esteem of the military establishment[vi]. Systematic corruption practices that remain unpunished reduce the public trust in the defense mechanism as well as degrade the prestige of the nation’s forces on an international scale. A lower esteem for the military degrades the morale of its personnel, lowers the possibility of attracting highly qualified people and generally undermines the nation’s esteem as regards to its allies, its competitors and international organizations such as NATO.

For the above reasons, it follows that tackling corruption in the defense sector is a goal of particular importance and needs serious attention by both the governments and the international community. Especially in the aftermath of the global financial crisis, the need to press for more efficient and transparent use of increasingly scarce resources is more than urgent. Indeed, NATO, in close co-operation with the civil society, has emphasized the need to address corruption risks and formulated the necessary strategies and tool-kits accordingly.

The Alliance, since its foundation, has been encouraging reforms in its member states, towards key ideals such as democratic governance, human rights protection and the establishment of more accountable, effective and transparent levels of public administration. As regards to corruption, in November 2007, NATO has formed the Building Integrity Initiative, proving its support for more accountable defense sectors. Particularly, the BI Initiative was established by the Euro-Atlantic Partnership Council, ‘to raise awareness, promote good practice and provide practical tools to help nations build integrity and reduce risks of corruption in the security sector.’[vii] Nevertheless, the responsibility for engaging in such initiatives remains with the national authorities, not international organizations. In other words, the Alliance member-countries’ willingness to eradicate corruption in defense is a prerequisite for the effectiveness of the Building Integrity Initiative.

Recent investigations on the procurement of armament by Defense officials in Greece have raised public awareness about corruption practices in the defense sector of the country. Generally, the military is characterized by limited transparency and low levels of competition making the sector vulnerable to abuse of public office for private gain. Systematic corrupt practices in defense may lead to inefficiencies in the sector, waste of scarce public funds and reduced prestige for the military. Indeed, as a number of nations facing serious budget deficits have squeezed defense expenditure, it is clear that corruption should be eradicated urgently. NATO has formulated the Building Integrity Initiative, aiming to encourage its member-countries to address corruption risks and formulate preventive mechanisms. Currently, Greece is facing serious financial constraints, trying to reduce its budget deficits under the IMF and EC supervision. We believe, that joining the NATO’s Building Integrity Initiative would be a decisive step by Greece, towards a more efficient defense sector and less waste in the country’s public resources.


[i] Schmitt, Jörg. “How German Companies Bribed Their Way to Greek Deals.” Der Spiegel. 5 November 2010: Print.

[ii] Pyman, Mark, Air Commodore Waldron, and Dominic Scott. “Defence Against Corruption, Short Note on: Defence Integrity Pacts.” Transparency International UK (2007): n. pag. Web. 16 Feb 2011. .

[iii] Pyman, Mark, Air Commodore Waldron, and Dominic Scott. “Defence Against Corruption, Short Note on: Defence Integrity Pacts.” Transparency International UK (2007): n. pag. Web. 16 Feb 2011. .

[iv] Fluri, Philipp, Adrian Kendry, Simon Lunn, and Pyman Mark. “The Corruption Curse.” Building Integrity and Reducing Corruption in Defence, A Compendium of Best Practices. Todor Tagarev: Geneva, Geneva Centre for Democratic Control of Armed Forces, NATO, Swiss Ministry of Defense. 2010. Print.

[v] Fluri, Philipp, Adrian Kendry, Simon Lunn, and Pyman Mark. Building Integrity and Reducing Corruption in Defence, A Compendium of Best Practices. Todor Tagarev: Geneva, Geneva Centre for Democratic Control of Armed Forces, NATO, Swiss Ministry of Defense. 2010. Print.

[vi] Fluri, Philipp, Adrian Kendry, Simon Lunn, and Pyman Mark. Building Integrity and Reducing Corruption in Defence, A Compendium of Best Practices. Todor Tagarev: Geneva, Geneva Centre for Democratic Control of Armed Forces, NATO, Swiss Ministry of Defense. 2010. Print.

Editorial
Editorial
CONTRIBUTOR
PROFILE