The defence budget: declassify me if you can

Taras Pastukh on why it is so important to declassify “top secret” contracts of the defence departments.

55.6 billion hryvnias is the amount of taxes paid in the past year by Ukrainians for maintenance of the Armed Forces of Ukraine. The next year, according to the submitted draft budget 2017, this amount will grow by 9 billion hryvnias. Every Ukrainian contributes to the development of the army, but nobody knows what this money is spent on?

Because our defence spending is classified as “top secret”. Information is a secret even for parliamentarians.

In total, the budget-2017 provides nearly 130 billion hryvnias for security and defence sector.

Directly for the needs of army the Ministry of Defence will receive 64 billion hryvnias. The rest – more than 65 billion hryvnias – will be distributed between the Ministry of Internal Affairs, State Border Service, National Guard and State Service for Emergency Situations.

Once again the Government proposes to vote blindly for billions for the defence sector providing us only with some general figures.

Therefore, Samopomich did not support the draft State Budget for 2017. Instead, we propose clear steps for the taxpayers’ funds to be spent transparently and fairly and to be under the control of the Parliament and the public. We are preparing a request with the requirement to provide details on all the expenditures planned for 2017.

Step 1. To establish civilian and parliamentary control over the defence sector expenditures

In democratic countries (including those that have military conflicts) the control over the use of budget funds is exercised by parliaments. This information is transparent and accessible, thus every citizen can analyze it.

In Ukraine, following the Soviet tradition, whatever relates to the defence sector is a “top secret”.

Parliamentary control of the defence and security sector should be under the responsibility of the relevant parliamentary committee or special commissions. However, the activity of the Verkhovna Rada Committee on National Security and Defence does not provide an objective understanding of the state of affairs in the Armed Forces, and the possibilities of establishing special or investigative commissions are blocked by the majority.

A few days ago we returned from Geneva, where we visited the Geneva Centre for the Democratic Control of Armed Forces. We deliberately raised the question: how does the parliamentary control in countries that are advanced in national defence and security sector work. In the United States – the number one country in the fight against terrorism – one can visit the website and see the price of each item purchased for the money of taxpayers.

The only things kept secret are some secret inventions, or where exactly these or those weapons are delivered. The question arises – who benefits from the fact that the information on the cost of procurement in Ukraine remains a secret?

Step 2. “Ukroboronprom” expenses audit  

95% of the “Ukroboronprom” contracts are classified as “top secret”. This means the highest degree of protection of secrets.

And it gives the “green light” for corruption. There is no public control, no control of law enforcement bodies – there is only impunity. According to our information, at least one-fifths of the defence orders is looted.

Therefore, Samopomich did not vote for an increase in government loan guarantees by 4 billion for the needs of the “Ukroboronprom”. We insist on disclosure of the funds spent in the last few years? At the time when there was Debaltseve, the airport defence and so on.

Dozens of criminal cases against “Ukroboronprom” companies are the evidence of abuse. We are talking about the theft of nearly 300 million hryvnias of budget funds, with which law enforcement officers charged 30 enterprises of the concern, when under the guise of defence order funds were sent onto the accounts of fictitious enterprises.

Let us also recall the scandal about the theft of 23 million hryvnias conducted under the same scheme by the leadership of Zhytomyr armored plant allocated for the repair of equipment for the needs of the ATO. In addition to this – the theft of engines with a total value of almost 7 million hryvnias.

There is also information about National Anti-Corruption Bureau search at one of the state-owned special export enterprises, which is part of “Ukroboronprom”: during the conclusion and execution of contracts for the supply of the equipment the leadership of this enterprise appropriated funds in especially large amount.

A criminal proceeding has also been initiated in respect of officials of the “Kharkiv armored plant” state enterprise, which sent budget funds to some fictitious suppliers of components for armored vehicles.

In all these cases we are talking about a cut and dried scheme of “cashing out” the public funds. Criminal cases have been opened, investigations are ongoing, however, no official has been punished so far.

When we talk about the need to declassify “Ukroboronprom” expenditures, we do not mean to disclose where the weapons are delivered. We are interested in the price paid. For example, in 2014 for the same cartridge in one case we paid 120 hryvnias, in a month we paid 150 hryvnias for it, and a few days later already 160 hryvnias. Sometimes prices are inflated by more than 100%!

Billions of taxpayers’ hryvnias are spent on non-existent machines and equipment. No wonder they are nowhere to be found in the ATO zone.

Recently, the in the parliament there was held a large exhibition of the latest technology. However, we see no of it at the forefront, in particular, the widely publicized armoured personnel carrier-3, armoured personnel carrier-4, and armored combat vehicles. At the same time billions of the state funds are spent on the new technology. These are just a few facts from the report on the assessment of the effectiveness of management in the sphere of security and defence, which we introduced in the Parliament.

Therefore, we offer to audit “Ukroboronprom” and the weapons transferred to the Armed Forces.

It is necessary to change the approaches to the management of state-owned enterprises in the defence sector and to amend the legislation on state secrets and public procurement.

Step 3. A differentiated approach to the salaries of servicemen

Most of the spending for the Armed Forces goes for the maintenance of the military. In 2016 it was 40.9 billion hryvnias, of which 29.2 billion – the salaries of the servicemen.

An interesting example: the difference in salaries of soldiers in the rear and on the front line is only 1, 200 hryvnias. Contract soldiers, those mobilized, conscripts who are at permanent posts earn 7, 200 hryvnias, and the contractors and mobilized ones who are at the forefront in ATO earn 8, 400 hryvnias.

Where is the logic? It is fair that the people who risk their life and health 24 hours a day receive the same payment as those who are in the rear?

This is why it is necessary to introduce a differentiated approach in payment for three categories of soldiers: for those who are undergoing training, for contract soldiers, and for those who are carrying out combat missions onsite.

Another problem is the military privileges, the status of combatants and participants of ATO, which are often given to those who haven’t spent a single day in the ATO zone and just seek to avoid lustration.

We are only taking the first steps towards building a strong and efficient army. And most of the problems arising along the way appear not due to the lack of funds, but due to their uncontrolled use.

That is why the security and defence sector should be under public control.

Taras Pastukh, MP, Samopomich Union faction, Chairman of the Subcommittee on the Effectiveness of Using the Budget Funds of the Verkhovna Rada Committee on National Security and Defence

Taras Pastuh
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