Author: harveygavin

This article originally appeared on the Royal United Services Institute (RUSI) website.

By Ara Marcen Naval and Karolina MacLachlan.

Throughout the coronavirus outbreak, all eyes have been on the sector providing the frontline response to the epidemic: healthcare. But as the military steps in to assist in a growing number of countries around the world, there are questions about whether that could lead to additional problems.

The military capacity for rapid, large-scale movements – whether to protect hospitals, distribute supplies or increase transport capabilities – can be essential in responding to an infectious disease outbreak. Large-scale military deployments are likely to have the biggest impact in countries with weak healthcare systems and governance, limited civilian response capacities, vastly dispersed populations, or ongoing conflict and insecurity.

As low-income countries brace for the onset of the coronavirus pandemic and health authorities warn of challenges ahead, it is important to remember that large-scale military operations in support of the response to coronavirus in fragile and conflict states carry significant risks. Political, financial and health crises often expose cracks in the system that are less noticeable in more settled times. For instance, long-term governance gaps and ongoing corruption in armed forces can undermine civilian trust, making their work during crises more difficult. Military deployments during the Ebola outbreaks in the DRC and Liberia in 2014 and 2019 are examples of the role armed forces can play in limiting the scale of an epidemic – yet groups such as Médecins Sans Frontières also argued that years of abuse at the hands of the DRC’s military had made the local population wary of these troops, undermining their efforts.

Transparency International’s Defence and Security research shows that in many developing and fragile states, defence sectors tend to be poorly governed. High levels of secrecy and dysfunctional oversight structures often enable fraud, corruption and a wide range of abuses. The coronavirus crisis, like others before, has the potential to exacerbate these vulnerabilities, weakening militaries when they are needed most.

For example, where frontline soldiers go unpaid or have their salaries stolen by senior officers – a problem which research indicates affects the DRC, Iraq, Mali and Nigeria – militaries could see ill-disciplined units prone to avoiding service, busy trying to secure other sources of income or abusing civilians. A health and humanitarian emergency, which puts frontline responders at additional risk, could prove too much for those troops to handle, while sudden access to scarce resources could provide opportunities at the expense of the civilian population. Where militaries are already affected by corrupt practices, acceptance of small bribes and other favours can undermine containment efforts. Simultaneously, favouritism or corrupt networks could skew distribution of healthcare equipment by influencing the choice of priorities. Disciplinary issues, usually more widespread in states with weaker overall defence governance, could make an appearance or be exacerbated by the crisis. In the Philippines, for instance, President Duterte has already given police and military officials the order to shoot ‘troublemakers’.

Finally, a health and humanitarian crisis could see deployments of foreign troops into fragile and conflict states. As the Ebola example suggests, sizable deployments of US and UK forces into Liberia and the DRC helped construct and protect health facilities, distribute supplies and train healthcare workers. However, as international forces intervene in crises, the tangible and intangible resources they bring – such as cash, necessary items and political support for local actors – could further strengthen corrupt networks, as has been seen in countries such as Afghanistan. As Transparency International’s guidance on military interventions indicates, international forces themselves are also not immune to corruption, exacerbating challenges already in existence.

As economies weakened by coronavirus will require additional investment to rebuild, countries cannot allow uncontrolled resource outflows through defence and security institutions. Governments should take measures to strengthen defence governance immediately, offering a maximum level of protection in the short term and strengthening the global response. The authors recommend, for instance:

Inserting anti-corruption measures and the highest levels of transparency at the core of any new legislation (including that governing the distribution of resources) to respond to the emergency. This should include making publicly accessible contracts that govern financial flows and procurement associated with the crisis.
Ensuring that military deployments to help manage the emergency have clear timelines, independent oversight and are subject to review and audit mechanisms.
Extending protection to whistleblowers to help ensure that those who see corruption, whether in healthcare or in defence, can safely report it.
In the longer term and as the crisis recedes, it is key that attention to oversight and control of the defence sector becomes a priority, especially in fragile and conflict-affected states. Defence, healthcare and development are not mutually exclusive; slippage in one is likely to endanger progress in the other. Without fixing defence, sustainable development and better healthcare are unlikely to take root, especially in the most vulnerable countries.

Ara Marcen Naval is the Head of Advocacy for Transparency International – Defence & Security.

Karolina MacLachlan is Transparency International – Defence & Security’s Regional Programme Manager for Europe.

By Colby Goodman

This post first appeared in the March 2020 edition of The Export Practitioner.

Sometimes good intentions are just good intentions. In the push for major changes to the U.S. arms export control system from 2010-13, the Obama administration often said the U.S. government was not effectively preventing harmful arms exports. One major culprit was “an overly broad definition of what should be subject to export classification and control,” according to then-Defense Secretary Robert Gates.

Placing “higher walls around fewer, more critical items” would solve the problem. Seven years later, however, there are serious questions about whether there are higher walls around military technologies important in modern warfare.

Push for Higher Walls

Gates’s concern about the overly broad definition of arms was based on his time as deputy director for intelligence at the Central Intelligence Agency. In his April 20, 2010, speech, Gates said, “it soon became apparent that the length of the list of controlled technologies outstripped our finite intelligence monitoring capabilities and resources. It had the effect of undercutting our efforts to control the critical items.”

A few State officials also told me at the time that they had been requested to do investigations (post-export end-use checks) on U.S.-approved exports of items such as washers for certain weapons systems, which they thought was a waste of time.

The Obama administration in fact frequently stated that the U.S. arms export control system was harmful because “we devote[d] the same resources to protecting M1A1 tank brake pads as we do to protecting the M1A1 tank itself.”

According to Gates, “many parts and components of a major piece of defense equipment – such as a combat vehicle or aircraft – require their own export licenses. It makes little sense to use the same lengthy process to control the export of every latch, wire, and lug nut for a piece of equipment like the F-16, when we have already approved the export of the whole aircraft.” Instead, the U.S. government should focus on the five percent of cases that are riskier.

While the administration often exaggerated these points – M1A1 tanks had always received much more vetting than their brake pads – many parts and components did require a separate license. In 2011, the Government Accountability Office (GAO) also published a report that highlighted clear gaps in State post-export end-use checks for sensitive night vision goggles to countries in the Middle East.

In response, the Obama administration led an effort to move an estimated 30,000 munitions-related items from State’s more strictly controlled U.S. Munitions List (USML) to Commerce’s more loosely controlled Commerce Control List (CCL). This effort included up to 90 percent of the items controlled under the USML’s military vehicle category.

For the military aircraft category, “missile launchers, radar warning receivers, and laser/missile warning systems” would continue to be controlled under the USML. However, items such as F-16 wings, rudders, fuel tanks, and landing gear would move to the CCL. The administration would also move some items formerly classified as significant military equipment.

But, did the Obama administration simultaneously elevate reviews or checks on key U.S. military technologies that stayed on the USML? It certainly was not enough for the Obama administration to just move tens of thousands of munitions off the USML. There was also a risk that the move would likely result in a dip in State revenue and personnel for examining arms exports.

Gaps in Implementation

In a recently published report entitled Holes in the Net: U.S. Arms Export Control Gaps in Combatting Corruption, I argue that there are a number of gaps in State’s efforts to place higher walls around arms on the USML. These gaps are in State’s Directorate for Defense Trade Control’s (DDTC) basic review of arms export licenses and in their more detailed pre- and post-export end-use checks. The problems appear to have been widened under the Trump administration.

In July 2018, for instance, State’s Inspector General (IG) found several weaknesses in the way DDTC reviews arms export applications in an audit. Specifically, the IG found that DDTC had “approved 20 of the 21 applications (95 percent) [IG] reviewed despite lacking required information…” (see The Export Practitioner, March 2019, page 15).

In eight cases, the IG found inconsistencies within the application on the quantities, types of arms, or values, which are indicators of a possible diversion of U.S. weapons or bribery. The IG audit also found 17 cases in which DDTC should have notified Congress for additional scrutiny, but DDTC did not.

State is no longer increasing the number of its end-use checks in a year. In the department’s annual report on end-use checks for fiscal year (FY) 2016, DDTC said there was an increase in the percentage of end-use checks they initiated compared to the total export applications for the year from 1.3 percent in FY 2015 to 1.75 percent in FY 2016.

DDTC seemed to indicate that this increase showed it was beginning to elevate its reviews of more sensitive military items. However, the most recent end-use report for FY 2018 under the Trump administration shows a drop in the percentage of end-use checks to 1.3 percent, which is similar to percentage levels before the reform started.

There are also some key gaps in the way DDTC conducts its end-use checks. In 2016, State developed a new framework for reviewing arms sales, which recommend asking several key questions about corruption. These questions include whether or not the intended recipient of U.S. arms is “permitting illicit trafficking across borders, buying and selling positions or professional opportunities, stealing government assets and resources, engaging in bribery, or maintaining rolls of ghost personnel.” However, DDTC does not regularly look at the above defense sector corruption indicators when conducting its pre-export end-use checks.

It also appears there have been some challenges with DDTC’s post-export end-use checks. In the department IG’s audit of DDTC in 2018, they noted serious delays, from 77 to 300 days, in conducting post-export end-use checks. In FY 2018, DDTC had also only conducted around nine pre- or post-export end-use checks for all arms exports to the Middle East and North Africa despite the ongoing risks of diversion in the region.

What could be done to elevate State checks on key military technologies and weapons systems? DDTC has said one of the key reasons for some of the above gaps has been staff turnover and an overall staff reduction. DDTC told the department’s IG that its licensing office had a 28 percent reduction in staffing as of July 2018, and some licensing officers were finding it difficult to keep up with their workload. Staff turnover also made it difficult for DDTC to conduct end-use checks in the Middle East in FY 2018.

Fixing the Gaps

While DDTC has hired some staff to help address the gaps in end-use checks for the Middle East, they still have not been able to add enough staff to address all of the above concerns. The Trump administration’s hiring freeze and reductions in State funding have also impacted DDTC’s efforts to hire new staff. Congress, however, could address this gap by elevating funding for DDTC personnel, which would also help speed up DDTC’s review of arms export applications generally.

It also appears that the Trump administration’s focus on increasing the number of U.S. arms sales to key U.S. partners and allies around the world has impacted some State focus on enhancing risk assessments. There, however, are continuing efforts to enhance these risk assessments at State, including related to defense sector corruption indicators.

In some ways, Gates was right when he said there was a need to place higher walls around key U.S. military technologies and weapons systems to prevent them from reaching the wrong hands. If the United States does want to make good on one of its initial reasons for the reform, there are still opportunities to do so. Without these improvements, however, the United States will be back where it started at the beginning of the reform, not effectively preventing harmful arms exports.

Ara Marcen Naval is Head of Advocacy for Transparency International – Defence & Security. In this blog, she explains her motivations for joining the fight against corruption – and why our work in the defence sector matters more than ever.

In November 2019, I joined Transparency International’s Defence & Security Program after years working for other high-profile organisations on arms control and human rights. Transparency International is best-known for its indices, especially the flagship Corruption Perception Index. But what most intrigued me were the less well known – but equally important – indices which measure the risk of corruption of the defence sector.

In my career, I have witnessed some of the biggest developments in the arms control regime, including the adoption of the Arms Trade Treaty. However, despite civil society efforts to curb the arms trade, global defence spending keeps rising – by 15 per cent in the past decade. Major players like US, EU, China and Russia have embarked on major programmes to modernise and upgrade their militaries, increasing military spending over the decade to 2016 by 144 per cent and 106 per cent respectively. And many other states are following suit. In Asia, at least five countries have doubled their defence expenditure in the same period; in the Middle East, defence comprises an average 15 per cent of state spending.^[1] The opportunity of trade deals hollows the considerations for development and human rights.

But it is not just the size of defence budgets that matters. Global military expenditure is rising, yet rising most rapidly in exactly those places where standards of governance are weakest. And where checks and balances are weak, vast proportions of public funding are spent in completely opaque ways. Parliamentary committees, judiciaries, and audit offices are growing in authority in many countries from Malaysia, to South Africa, to Brazil. But defence matters all too often remain off-limits.

Despite this, the arms control regime (for instance, in the Arms Trade Treaty, or the EU Common position) does not observe corruption as one of the criteria to refuse the license to transfer weapons. Procurement and arms trade deals take place over time, sometimes there are deals that take 10 years or more, and currently there are no obligations for states to extant licences that can be suspended or revoked on the basis of new information or changed circumstances.

The arms industry is generally held to be among the most vulnerable to corrupt behaviour across all industrial and commercial sectors. Cases of large-scale corruption continue to be reported and recorded, and the problem is remarkably persistent despite repeated efforts to insert policies on anti-bribery and corruption. The excessive influence of the industry in government decisions has potentially dangerous consequences. It risks eroding the government’s ability to make independently informed choices on military needs, which might increasingly have to rely on data and expertise of existing suppliers with own vested interests when designing tenders, determining the merits of products and their suitability to close capability gaps.

The anti-corruption movement has a huge peak to climb. Defence & security sectors are excluded from most of the existing mechanisms to fight corruption as it lays in the national security arena. All states struggle with the need to find a balance between national security concerns and the freedom of information. The risks of failing to control sensitive information related to national security can be extremely serious, and it is understood that a higher level of secrecy is needed in areas of the defence and security sector to protect national security. However, this should not justify non-compliance with international best practices in secrecy classification.

Where there is no expectation that defence institutions are transparent about their activities, a multitude of opportunities for corruption present themselves. Weak legislation, a lack of accountability and poor or inexistent oversight systems provide the perfect environment for individuals to engage in corruption. We need to raise our voices to demand closer oversight: defence can’t continue being the exemption. It needs to be part of the anti-corruption efforts, both for civil society and for governments and institution.

^[1] SIPRI, Military Expenditure Database 2017, https://www.sipri.org/databases/milex.

By Matthew Steadman, Project Officer – Conflict & Insecurity

2019 was a deeply concerning year for the Sahel. Attacks by extremist groups have increased five-fold in Mali, Niger and Burkina Faso since 2016, with the UN now describing the violence as “unprecedented”. The past year was the deadliest by far with more than 4,000 deaths reported. Niger lost 89 soldiers in a single attack by Islamic State in Changodar in January, whilst two ISGS attacks in Mali in November claimed the lives of 92 soldiers. In Burkina Faso alone, 1,800 people were killed in the past year due to extremist violence. The intensification of extremist activity in the Sahel threatens to engulf West African coastal states, as already weakened national defence and security forces come under increasing pressure. Much international coverage of the developing events has focussed on the operational aspect of the crisis, from the various armed groups operating in the region to the international response, spearheaded by France’s Operation BARKHANE but also including MINUSMA, the G5 Sahel, the United States and the EU. However, one aspect that has been regularly overlooked is the poor capacity of the region’s national defence forces to respond to security threats as a result of poor defence governance, corruption and weak institutions.

Corruption and conflict go hand in hand, with corruption often fuelling violence and subsequently flourishing in afflicted regions. Because of corruption and poor governance, defence and security actors are often seen not as legitimate providers of security, but as net contributors to the dynamics of conflict; with poor training, management and institutional support leading to a downward cycle in which it is the civilians that more than often feel the brunt – as has been seen in Burkina Faso, Nigeria and Mali. When security institutions are perceived as corrupt, public confidence in government erodes further. Fragile governments that are unable to respond to the needs of citizens can exacerbate existing grievances, heightening social tensions and hastening the onset of violence. Across the Sahel, armed groups have been able to entrench themselves first and foremost in those areas which have been neglected by weakened and corrupt central authorities, often by positioning themselves as providers of security, justice and basic services. In this way, it is crucial to view corruption not just as the consequence of conflict, but more often as its root cause and therefore a critical element for any attempt at resolution to address.

Against this backdrop, research by Transparency International – Defence & Security’s Government Defence Integrity Index (GDI), highlights the deficiencies in the safeguards which should provide protection against corruption in the defence sectors of Burkina Faso, Cote d’Ivoire, Ghana, Mali, Niger and Nigeria, increasing the likelihood of defence funds and capabilities being wasted due to mismanagement of human, material and financial resources. In doing so, the GDI outlines a number of key issues which need to be addressed in order to enhance security forces’ ability to respond to threats and protect local communities:

Reinforce parliamentary oversight

Despite most countries having formal independent oversight mechanisms for defence activities, policies and procurement, our research has found that these are often only partially implemented, easily circumvented and insufficiently resourced to carry out their mandates. The result, is defence sectors which are still largely the preserve of the ruling elite and shrouded in secrecy, raising concerns over the use of vital defence funds and the management of resources and assets.

Strengthen anti-corruption measures in personnel management and military operations

Personnel management systems are also vulnerable, with inadequate or non-existent whistleblowing protections and reporting mechanisms, unclear appointment, and promotion systems open to nepotism, and codes of conduct which fail to specifically mention corruption or enforce appropriate sanctions. Equally, despite many countries in the region being actively engaged in on-going counter insurgencies, there is no evidence of Mali, Niger, Burkina Faso or Nigeria having up to date doctrine which recognises corruption as a strategic threat to operations, meaning there is little if any appropriate training on the pitfalls associated with operating in corrupt environments and little appreciation of how soldiers’ conduct might exacerbate the violence they are trying to quell.

Increase transparency and external oversight of procurement processes

Perhaps most concerning of all is that corruption risks in defence procurement remain extremely high across the region. The procurement process is opaque and largely exempt from the checks and balances which regulate other areas of public procurement in countries like Mali and Niger for instance. Across the region, the effectiveness of audit and control mechanisms over the acquisition of military goods and services is heavily restricted by blanket secrecy clauses and over-classification of defence expenditure. This raises serious concerns over the utility, relevance and value for money of purchased equipment and increases the risk of that frontline troops will not have the resources required to deliver security.

Despite these structural vulnerabilities, international assistance in the region has been heavily focussed on security assistance rather than on improving the underlying structures that govern and manage defence and security in the states that make up the region. The 13^th January summit between French President Emmanuel Macron and the leaders of the G5 Sahel countries, was emblematic of this with the meeting focussed on reaffirming France’s military presence in the region and announcing the deployment of further troops, whilst side-lining the governance deficit which underlies so much of the crisis. Programmes have tended to focus on training and equipping military and police forces in Mali and Burkina Faso for instance, or improving strike capabilities by investing in US drone bases in Niger. The concern however, is that the impact of these efforts will be blunted without a more sustained engagement in addressing the more fundamental failings that lay at the hearty of the problem. Mali’s recent announcement of a recruitment drive for 10,000 new defence and security forces personnel for example, will only be effective if it is accompanied with improvements in the way these troops are trained, led, equipped and managed and if the political and financial processes which govern them are strengthened and corruption risks reduced.

A successful response, at the national, regional and international levels, to the violence cannot be just security focussed. Poor defence governance and corruption risks will continue to hamper national forces’ operations and will hinder the impact of international efforts which support them. A more comprehensive approach is needed which addresses the underlying corruption risks which permeate the region’s defence sectors. Improving oversight, transparency and accountability is a critical step in securing a sustainable peace in the region and ensuring that defence and security apparatuses do what they should, which is to further the human security of populations that they should be serving.

January 14, 2020 – Sweeping reforms to controls on American arms sales abroad are increasing holes in checks to identify and curb corruption – measures that can also be used to assess whether sales may help or hurt efforts to address terrorist threats and attacks – according to new research by Transparency International Defense & Security.

Launched today, Holes in the Net assesses the current state of US arms export controls by examining corruption risk in three of the most prominent sales programs, which together authorized at least $125 billion in arms sales worldwide for fiscal year 2018.

Across all three different arms sales programs, which are managed by the Defense, State, and Commerce Departments, there is a clear gap in American efforts to assess critical, known corruption risk factors. This include the risks of corrupt practices – such as theft of defense resources, bribery, and promoting military leaders based on loyalty instead of merit – weakening partner military forces.

The United States is one of the biggest arms exporters to countries identified as facing ‘critical’ corruption risk in their defense sector, including Egypt, Jordan, Oman, Qatar, and Saudi Arabia, according to recent analysis by Transparency International – Defense & Security.

Steve Francis OBE, Director of Transparency International – Defense & Security, said:

“Given the corrosive effect corruption has on military effectiveness and legitimacy, it is deeply concerning to see that these reforms to American arms export controls have made it easier for practices like bribery and embezzlement to thrive. In order to ensure American arms sales do not fuel corruption in countries like Egypt, Qatar, and Saudi Arabia, it is imperative to understand and mitigate the corruption risks associated with countries receiving US-made weapons before approving major arms deals.”

Of the three programs assessed in the report – Foreign Military Sale, Direct Commercial Sale, and the 600 Series – the 600 Series was identified as having the biggest gaps in its anti-corruption measures. Overseen by the Commerce Department, sales through this program do not require declarations on a series of major corruption risk areas, including on certain arms agents or brokers, political contributions, company subsidiaries and affiliates, and any defense offsets. These areas are common conduits used for bribery and political patronage.

More recently, the Trump administration has proposed moving many types of semi-automatic firearms and sniper rifles to Commerce Department oversight. The proposal calls for additional controls for firearms, but also reduces overall oversight of small and light weapons exports.

Colby Goodman, Transparency International – Defense & Security consultant and author of the report, said:

“Over the past 30 years, America has established some of the strongest laws to prevent bribery and fraud by defense companies engaged in arms sales. However, defense companies selling arms through the 600 Series program no longer have to comply with key anti-corruption requirements. As a result, US officials will likely find it harder to identify and curb bribery and fraud in sales of arms overseen by the Commerce Department.”

The report analyzed five priority corruption risk factors for American arms sales programs: 1) Ill-defined and unlikely military justification; 2) Undisclosed or unfair promotions and salaries in recipient countries; 3) Under-scrutinized and illegitimate agents, brokers and consultants; 4) Ill-monitored and under-publicized defense offset contracts, and 5) Undisclosed, mismatched or secretive payments.

The report makes a series of policy recommendations that would help strengthen anti-corruption measures in these prominent arms sale programs, including:

Creating a corruption risk framework for assessing arms sales through programs managed by the Defense, State, and Commerce Departments. These assessment frameworks must examine key risk factors identified in our report, including theft of defense resources and promoting military leaders based on loyalty instead of merits, among others.
Strengthening defense company declarations and compliance systems for sales of arms overseen by the Commerce Department, including declarations of any defense company political contributions, marketing fees, commissions, defense offsets, and financiers and insurance brokers of arms – all clear conduits for corruption.
Increasing transparency on arms sales and actions to combat arms trafficking overseen by the Defense, State, and Commerce Department. Critically, the Defense and State Departments need more details on defense offsets in order to properly review proposed arms sales. There is virtually no information on Commerce Department approved arms sales.
Legislation requiring for firearms and associated munitions to remain categorized as munitions to ensure further relaxing of export controls do not adversely impact US national security or foreign policy objectives.

Notes to editors:

Interviews are available with the report author.

Holes in the Net is available to download here.

Saudi Arabia, a major importer of US-made arms, failed to defend against an attack on its oil facilities in September 2019. Reports have suggested that corrupt ‘coup-proofing’ measures designed to shield the ruling family likely contributed to the ineffective response.

Contact:

Harvey Gavin

harvey.gavin@transparency.org.uk

+44 (0)20 3096 7695

+44 (0)79 6456 0340

20th December, London – The complex web of murky pathways through which the American defense industry works to secure permission to export arms to repressive regimes in the Middle East has been laid bare in new research by Transparency International – Defence & Security.

A Mutual Extortion Racket: The Military Industrial Complex and US Foreign Policy reveals how defense industry players, elected officials, the defence bureaucracy, and governments in the Middle East – working through intermediaries such as lobbyists, think tanks, and public relations firms – are intertwined and serve one another’s interest, often at the expense of US foreign policy outcomes.

These mutually-beneficial relationships have contributed to a vicious cycle of conflict and human rights abuses across the Middle East and North Africa (MENA), including increased exports of arms and defence services to Saudi Arabia and the United Arab Emirates which began under the Obama administration and has ramped up under President Trump.

Steve Francis OBE, Director of Transparency International – Defense & Security said:

“In the midst of the unending war in Yemen and after the murder of journalist Jamal Khashoggi last year, questions have been asked over why American arms exports to places like Saudi Arabia and the UAE have not only continued, but accelerated. After examining the murky web of lobbying, campaign finance, revolving door employment, and sometimes even downright corruption, it is now clearer how these exports are allowed to continue, despite attempts by many in Congress to stem the flow.

“While much of the system that allows these exports to continue is riddled with a lack of transparency and oversight, there are some areas in which existing strengths can be amplified. We urge Congress and the Executive branch to adopt our recommendations and ensure that arms exports are better aligned with US foreign policy interests and the American defense industry no longer wields excessive influence over policymaking.”

The pathways which allow this ‘extortion racket’ to play out include:

Controversial sweeteners bolted on to defence contracts known as ‘offsets’

Despite rarely making economic sense, these side deals account for US$3 to $7 billion in obligations every year – and the lack of transparency around offsets means they are a notorious conduit for corruption. A series of leaked emails in 2017 revealed that American defence firms were indirectly funding advocacy campaigns around drones which were friendly to the Saudi and Emirati governments. Money from the US companies was paid directly into an Emirati development fund which was eventually routed to a US think tank who created the campaigns.

Political campaign donations

‘Dark money’ groups such as the US Chamber of Commerce, the largest American business lobbying organization, are under no obligation to reveal their donors but can contribute to influence political campaigns, especially via so-called Super PACs. According to a defence lobbyist, the Chamber aims to move any discussion about US defense exports “straight down to dollars and jobs in a congressional district” to incentivise members of Congress not to take any steps that could impact arms sales.

The so-called ‘revolving door’ between high-level jobs in government and the military and senior roles with defense companies or lobbying firms.

After leaving Congress, Republican Howard McKeon set up a lobbying firm which boasts its status as “the only firm led by a former Chairman of two full congressional Committees”. McKeon signed as a registered foreign agent for the Saudi government in 2016 soon after setting up his firm. During his tenure as Chairman of the House Armed Services Committee, $10 billion in military sales were approved to Saudi Arabia – a doubling of previous sales to the country.

Rarely is just one of the pathways identified in the report is used and they are often intertwined to magnify influence towards desired policy outcomes.

Simply limiting lobbying and campaign finance contributions is necessary but not enough to rebalance the egregious flaws of this influence system. Our policy recommendations include:

Establish a ‘Defense Exports Czar’ on the National Security Council to oversee all aspects of security assistance, including defence exports, and assess whether exports align with larger US foreign policy goals.
Legislate a ban on offset contracts between the American defence industry and foreign governments.
Re-establish the State Department as the lead agency for all security assistance, including all defense exports, while Congress should demand more insight and transparency into these exports
Require all contractors and sub-contractors to list their beneficial owners to ensure contract funds are not funnelled to those tied to corrupt politicians, insurgents, terrorists, warlords or criminal actors.
Establish legislation to limit contributions to super PACs by the defense industry or its intermediaries and prevent anonymous donations; require defence firms to publicly disclose all donations or political activity over $10,000.

Notes to Editors:

The report is available to download here.

Transparency International’s newly-released Government Defence Integrity Index scores countries according to the risk of corruption in their defence institutions. Saudi Arabia was ranked F – indicating a critical risk – while the UAE was ranked E, indicating a very high risk.

The American arms industry is the largest in the world. In 2018, American companies were responsible for 57 percent of worldwide arms sales, totalling $226.6 billion.

The sector is also a major force in US manufacturing in employment. In 2017, 10 percent of the $2.22 trillion factory output went to produce weapons sold to the Defence department.

Between 2012 and 2015, the US exported 46 percent of all arms delivered to the Middle East. In 2016, 35 of the 57 arms sales proposed were to countries in the MENA region.

Contact:

Interviews are available with the report author.

Harvey Gavin

harvey.gavin@transparency.org.uk

+44 (0)20 3096 7695

++44 (0)79 6456 0340

By Steve Francis OBE, Director of Transparency International – Defence & Security

The Government Defence Integrity Index (GDI) is the first global analysis of corruption risks and the existence and enforcement of controls to manage that vulnerability in defence and security institutions, highlighting priority areas for improvement. Key to analysing results from the Index is understanding that the GDI measures corruption risk, not levels of corruption per se.

GDI data will be released in regional waves through 2020. Results from the most recent wave – the Middle East and North Africa – were published in November.

On the whole, the data paints a fairly bleak picture for the region. Tunisia leads the group with an overall grade of “D,” indicating a “high” degree of defence corruption risk, while the other 11 assessed countries received either an “E” or an “F” – signalling “very high” or “critical” levels of risk. Regional averages reflect a similar performance across the individual risk areas – political, financial, personnel, operations, and procurement.

With these findings in mind, what can the analysis of the GDI’s result teach us about protracted cases of armed conflict, political instability, and insecurity that seem to characterise the region?

1. In many cases, high defence corruption risk is symptomatic of wider governance issues.

The GDI’s political risk indicators and aggregated scores on anti-corruption themes examine broader issues of legislative oversight, public debate, access to budgetary information, and civil society activity – issues that don’t just impact the defence sector. Indeed, this area of the assessment highlights essential ingredients for any open and transparent government that engages constructively with its citizens. As most of the assessed MENA countries are governed by authoritarian regimes, we should not be too surprised then that these wider governance challenges also exist in the defence sector. Specifically, our data found a clear lack of external oversight, audit mechanisms, and scrutiny of defence institutions across the region.

Table: MENA region average scores for key political risk indicators and anti-corruption themes

Question	Indicator/Theme	Score	Grade
Q1	Legislative scrutiny of defence laws and policies	15	F
Q3	Defence policy debate	9	F
Q4	CSO engagement with defence and security institutions	15	F
Q6	Public debate of defence issues	23	E
Q13	Defence budget scrutiny	10	F
Q17	External Audit	8	F
Aggregate	Openness to civilian oversight	14	F
Aggregate	Oversight	14	F
Aggregate	Budgets	15	F
Aggregate	Transparency	15	F
Aggregate	Undue influence	19	E

2. Countries with the highest defence corruption risk are also significant arms importers.

Saudi Arabia, Egypt, and Algeria were three of the world’s top five arms importers from 2014-2018. All three received an “F” grade in the GDI, with Egypt and Algeria receiving the bottom two regional scores (6/100 and 8/100, respectively).

The region has gaps in export controls, with only Lebanon and Palestine having ratified the Arms Trade Treaty, in addition to related risks like a lack of regulation around lobbying in defence and virtually no transparency around defence spending.

Although major arms exporters to the region like the United States have rules against the transfer of arms to third parties, end-use monitoring is not always consistent or comprehensive. This is especially troubling given that top arms importers in the region are either directly involved in or are arming parties to the devastating conflicts in both Yemen and Libya.

3. Low-scoring countries also exhibit high corruption risk by blurring the line between business and defence.

While the region as a whole scored poorly on indicators relating to the beneficial ownership (47/100) and scrutiny of military-owned businesses (44/100), these risks are greatest in countries with extensive military-run industries and/or significant natural resources. In Egypt for example, the military owns lucrative businesses across industries ranging from food and agriculture to mining, but has few controls in place for regulating these ventures. In Algeria, a largely state-owned economy renowned for high levels of corruption and patronage, there are a range of potential implications now that the military has stepped in to fill the vacuum following the ousting of President Bouteflika in March 2019 following mass public unrest.

The Gulf monarchies offer an example of how defence and business can overlap at the level of the individual. In the assessment for Saudi Arabia, we found that members of the royal family who serve in senior military positions also have controlling or financial interests in businesses related to the country’s petroleum sector. In the UAE as well, our research found that Mohammed bin Zayed Al Nahyan, the Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, is also the Chairman of a company dealing in natural resources.

On the other end of the spectrum, the GDI found that in Morocco, Palestine, and Tunisia, defence and security institutions do not own businesses of any significant scale, thereby removing a significant source of corruption risk.

As the GDI data shows, the risk of defence corruption in the MENA region is a serious concern with the potential to exacerbate ongoing conflict and instability. However, robust tools like the GDI can help governments to identify gaps in safeguarding practices – the first step in a process towards reform – while supporting civil society and oversight actors in countries across the region in conducting evidence-based advocacy.

6 December, Niamey – Security and stability in Niger are threatened by high levels of corruption risk in its national defence sector, according to new research by Transparency International – Defence & Security.

Niger’s defence sector scores poorly in the 2020 Government Defence Integrity Index, which is today being launched in Niamey. Receiving a majority of E and F grades, indicating either a “very high” or “critical” risk of defence corruption, the analysis assesses corruption risk across five key areas: political, financial, operations, personnel and procurement.

But Niger’s overall score of 22/100 places it above the regional average of 18/100, with levels of corruption risk in the country’s political, financial and procurement categories lower than in the region, but higher in terms of personnel and operations.

Steve Francis, OBE, Director of Transparency International – Defence & Security, said:

“In recent years, Niger has become increasingly affected by the conflict and insecurity in neighbouring Mali, which has quickly spread across the Sahel. With Niger now a key member of the G5 Sahel Joint Force, contributing over a thousand troops to the UN peacekeeping mission in Mali and receiving increasing amounts of military and technical assistance from foreign donors, the country is on the frontline of the regional struggle against extremist groups.

“Given the empirical link between corruption and conflict and the corrosive effect of corruption on defence capabilities, it is essential for Niger to accelerate its efforts to improve the governance of the defence sector and strengthen civilian democratic oversight of the defence apparatus. We urge the Nigerien government to improve the access to defence information of legislative and oversight bodies and take steps towards improving transparency and external oversight in procurement processes. Building the integrity and effectiveness of Niger’s defence sector will enhance its ability to respond to multiplying regional security threats and bolster public trust in defence and security institutions.

“With high corruption risks across national defence sectors in West Africa, tools like our Government Defence Integrity Index are more important than ever. By highlighting areas where safeguards against corruption are weak or non-existent, campaigners on the ground and reform minded military leaders and politicians can use these results to push for real change. Taking action to improve transparency and closing the loopholes which allow corruption to thrive is a critical step in building effective and accountable defence and security forces.”

These findings come against a backdrop of rising insecurity in Niger and the Sahel more broadly. Attacks by extremist groups against civilians and Nigerien defence and security forces are rising, while the protracted conflicts in Mali and Libya are increasingly spilling across the border into Niger. Mounting instability in Burkina Faso, Northern Nigeria and the Lake Chad region are also threatening to seriously impact the security of populations along Niger’s southern border and are turning the landlocked nation into a critical base in the fight against violent extremism.

Despite recent promising government initiatives and reforms, attempts to improve defence governance in Niger are hindered by high levels of secrecy and defence exceptionalism, which severely limit oversight and control of defence institutions by parliament and audit mechanisms.

The capacity of the National Assembly to hold the government to account is hampered by a lack of technical expertise and limited access to information, whilst a general lack of engagement between the defence establishment and civil society further limits the scope of civilian democratic oversight.

Financial oversight is also curtailed by the lack of a detailed defence budget made available to the legislature. Even the parliamentary Defence and Security Commission is presented with only abbreviated information when it comes to spending on secret items and military intelligence, whilst audit mechanisms are limited in terms of capacity and access to information. This lack of oversight is mirrored in Niger’s defence procurement process, with many purchases excluded from normal public procurement procedures. Moreover, reports from the Inspector General, along with the military acquisition plan are strictly confidential, thereby hugely hindering external control.

Personnel management would be improved through a greater emphasis on addressing corruption, for instance through revamped Codes of Conduct and specific anti-corruption training which are currently lacking. Equally, the nomination and recruitment processes at higher levels are shrouded in secrecy, opening the door for nepotistic practices.

Finally, Niger’s defence sector scores very poorly in terms of operational risk, with its military doctrine lacking an appreciation of corruption as a strategic threat during deployments.

At a time of growing regional instability, Transparency International – Defence & Security urges the Nigerien government to consider heightening efforts to improve civilian democratic oversight of the defence sector and strengthening the integrity of the armed forces to better respond to the security threats with which it is faced.

Notes to editors:

The full, country-specific Government Defence Integrity Index (GDI) results for Niger and West Africa as a whole are available at https://ti-defence.org/gdi/

The GDI assesses the existence, effectiveness and enforcement of institutional and informal controls to manage the risk of corruption in defence and security institutions.

Our team of experts draws together evidence from a wide variety of sources and interviewees across 77 indicators to provide a detailed assessment of the integrity of national defence institutions, and awards a score for each country from A to F.

The GDI was previously known as the Government Defence Anti-Corruption Index (GI). The Index underwent a major update for the 2020 version, including changes to the methodology and scoring underpinning the project. This means overall country scores from this 2020 version cannot be accurately compared with country scores from previous iterations of the Index.

Subsequent GDI results will be released in 2020, covering Central and Eastern Europe and Latin America, G-20 countries, the Asia Pacific region, East and Southern Africa, and NATO+.

Contact:

Harvey Gavin

harvey.gavin@transparency.org.uk

+44 (0)20 3096 7695

++44 (0)79 6456 0340