Show Index: gdi

Governance reforms, including to security sector, are urgently needed

23 October 2020 – Transparency International condemns the Nigerian state’s excessive use of force and the continued perpetration of violence against peaceful protesters.

Protests that began with demands for an end to police brutality and the Special Anti-Robbery Squad (SARS), have since transformed into wider calls for an end to corruption and the looting of public funds. The government must respond to these calls with serious evidence-based anti-corruption reforms, including to the security sector, in dialogue with civil society.

Natalie Hogg, Director of Transparency International – Defence & Security, said: “The appalling violence we have seen against peaceful protestors has to end. The only way to restore the much-needed trust in relations between Nigerian citizens and the security sector is to respect and protect basic human rights. Further repressive actions against legitimate demands for an improved security sector in Nigeria will only escalate the situation.”

Nigeria’s score on the Government Defence Integrity Index by Transparency International – Defence & Security rates corruption risks in the country’s security sector as Very High, with extremely limited controls in operations and procurement. While oversight mechanisms are in place, they often lack coordination, expertise, resources, and adequate information to fully perform their role.

In addition, Nigeria has seen no significant improvement in Transparency International’s Corruption Perceptions Index since the current methodology was introduced in 2012. The 2019 Global Corruption Barometer for Africa found that Nigerians rate the police as the most corrupt institution in the country. Almost half of those surveyed reported paying a bribe to the police in the previous 12 months.

Delia Ferreira Rubio, Chair of Transparency International, said: “Corruption deprives ordinary people of their rights to peace, health, security and prosperity. It robs young people of a future in which they can fulfil their potential, and it misappropriates the wealth of a nation for the benefit of the few. Peaceful protesters exercising their right to freedom of assembly must never be met with violence and brutality. Citizens’ demands for an end to corruption must be heard and acted upon.”

Auwal Musa Rafsanjani, Executive Director of the Civil Society Legal Advocacy Centre (CISLAC), Transparency International’s national chapter in Nigeria, said: “The government of Nigeria must immediately stop deploying troops against protestors. The young people who have taken to the streets have a constitutional right to express their grievances through peaceful protest without facing violence and brutality from the state. Together with our civil society partners in Nigeria, we stand ready to work with the government on the root and branch reforms needed to the police and security agencies, and to stop the looting of public funds through corruption. We also condemn the violence and the destruction of property by groups that have infiltrated the peaceful protests.”

New report warns weak regulations leave door open to undue influence

October 21 – German defence policy risks being influenced by corporate interests, new research by Transparency International – Defence & Security warns.

Released today, Defence Industry Influence in Germany: Analysing Defence Industry Influence on the German Policy Agenda details how defence companies can use their access to policymakers – secured through practices such as secretive lobbying and engagements of former public officials – to exert considerable influence over security and defence decision making.

The report finds that gaps in regulations and under-enforcement of existing rules combined with an over-reliance by the German government on defence industry expertise allows this influence to remain out of the reach of effective public scrutiny. This provides industry actors with the opportunity to align public defence policy with their own private interests.

To address these shortcomings, new controls, oversight mechanisms need to be put in place and sanctions should be applied to regulate third party influence in favour of the common good and national security.

Natalie Hogg, Director of Transparency International – Defence & Security, said:

“Decisions and policy making related to defence and security are at particularly high risk of undue influence by corporate and private interests due to the high financial stakes, topic complexity and close relations between public officials and defence companies. Failing to strengthen safeguards and sanction those who flout the rules raises the risk that defence decision making and public funds are hijacked in favour of private interests.”

The report shows how lax rules around policymakers declaring conflicts of interest, and lack of adequate penalties for failing to disclose them, leaves the door open to MPs wishing to take up lucrative side-jobs. Frequent and prominent cases of job switches between the public and private defence sector compound issues of conflicts of interest and close personal relationships with inadequate oversight.

And, due to a lack of internal capacity, Germany’s defence institutions are increasingly outsourcing key competencies to industry, allowing defence companies crucial access to defence policy. The procurement of these external advisory services is not subject to appropriate oversight.

While the German constitution requires a strict control over excessive corporate influence in public sectors, too often this is not sufficiently exercised due to a lack of technical and human resources within government and parliament. In addition, insufficiently enforced legal regulations and a lack of transparency of lobbying activities enables undue influence to occur in the shadows outside of public scrutiny.

Greater transparency is necessary to ensure accountability

National security exemptions are common in the defence sector and enable institutions to override transparency obligations in favour of secrecy. However, protecting national security and ensuring the public’s right to information can both be achieved by striking the right balance where information is only classified based on a clear justification for secrecy. Transparency in defence is crucial to ensuring effective scrutiny in identifying and controlling undue influence.

“Despite the justification for secrecy in this policy area the greatest possible transparency must be created to ensure control by parliament and the public. If, in addition, human resources and expertise are lacking, advice from corporate lobbyists receive easy access,” said Peter Conze, security and defence expert at Transparency International Germany.

New lobbying register does not go far enough: we need a legislative footprint

The lack of transparency around lobbying in Germany allows industry actors to exert exceptional influence over public policy.

While Germany’s proposed new lobbying register provides a positive step towards transparency, it does not go far enough to allow effective scrutiny. External influence on legislative processes and important procurement decisions remains unaccountable without the publication of a legislative or decision-making footprint, which details the time, person and subject of a legislator’s contact with a stakeholder and documents external inputs into draft legislation or key procurement decisions.

Transparency International – Defence & Security is calling on the German government to:

1. Expand the remit of the proposed lobbying register to cover the federal ministries and industry actors.
2. Include requirements for a ‘legislative footprint’ that covers procurement decisions in addition to laws. The legislative footprint should outline the inputs and advice that have contributed to the drafting of laws or key policies, and substantially increase transparency in public sector lobbying.
3. Introduce an effective and well-resourced permanent outsourcing review board within the Ministry of Defence to verify the necessity of external services and their appropriate oversight.
4. Strengthen the defence expertise and capacity within the independent scientific service of the Bundestag, or to create a dedicated parliamentary body responsible for providing MPs with expertise and analysis on defence issues.

Notes to editors:

• The report “Analysis of the influence of the arms industry on politics in Germany” was prepared by Transparency International – Defence & Security with the support of Transparency International Germany.
• The report examined structures, processes and legal regulations designed to ensure transparency and control based on 30 expert interviews. The report is part of a comprehensive study of the influence of the defence industry on politics in several European countries.

Contact:

Harvey Gavin

harvey.gavin@transparency.org.uk

+44 (0)20 3096 7695

This report examines systemic vulnerabilities and influence pathways through which the German defence industry may exert inappropriate influence on the national defence and security agenda. Governments and industry should mitigate the risk of undue influence by strengthening the integrity of institutions and policy processes and improving the control and transparency of influence in the defence sector. Compiled by Transparency International Defence and Security with the support of Transparency International Germany, this report forms a case study as part of a broader project to analyse the influence of the arms industry on the defence and security agendas of European countries. Alongside Italy, Germany was selected as a case study due to its defence industry characteristics, industry-state relations, lobbying regulations and defence governance characteristics. The information, analysis and recommendations presented in this report are based on extensive research that has been honed during more than 30 interviews with a broad range of stakeholders and experts.

With security threatened by increasingly belligerent armed actors and a hastened drawdown of international troops due to COVID-19, Iraq cannot afford to leave its defence institutions open to corruption.

By Benedicte Aboul-Nasr

Since October 2019, Iraq has seen tensions in its political sphere, including public protests, declining oil prices, increasing risks of proxy war between the US and Iran, and the resurgence of violent armed groups; the COVID-19 pandemic has exacerbated an already precarious security situation. After six months without a government, Iraq’s parliament appointed Prime Minister Mustafa Al-Kadhimi in May 2020, and granted his full cabinet confidence in June. To respond to the state’s most urgent priorities, the incoming government and its international partners should urgently consider addressing risks of corruption and human rights violations, in particular in the defence sector, to guarantee that the defence forces have the capacity, resources, and popular backing, to respond to priorities.

In research published this week, Transparency International – Defence & Security has found Iraq’s defence sector to be at critical risk of corruption, and lacking anti-corruption and transparency mechanisms. In fact, our Government Defence Integrity Index (GDI) indicates that Iraq is particularly vulnerable to risks relating to finances and personnel, and does not fare much better in the areas of political, operational, and procurement corruption risks, with an overall score of 9/100 on the Index. Corruption has been linked to the erosion of institutions and of trust, and is one of the main grievances driving the protests that broke out last October. As critical as these results are, they offer the new government a blank slate to meaningfully reform the defence sector from the ground up; this will be imperative to secure longer-term security for the country.

COVID-19 has added another threat; the crisis has severely affected Iraqi citizens, as security forces enforce curfews against a backdrop of unrest and accusations of forces deliberately firing on protesters, killing over 600, injuring thousands, and recent reports of ill-treatment and torture of anti-government protesters. It is also likely to disproportionately affect displaced populations, more vulnerable to the pandemic following years of conflict and displacement, with more poorly resourced accommodation, protection, and health systems. Crucially, the pandemic has also generated additional security challenges, as the government and defence institutions redirect resources towards its pandemic response, while simultaneously countering the apparent resurgence of extremist groups. Indeed, Iraq is already facing the resurgence of the Islamic State in Iraq and the Levant (ISIL), which are seeking to exploit the governance vacuum and the pandemic to resurface.

Governments around the globe have rapidly shifted their own priorities in response to COVID-19. Within weeks of the outbreak, France, Canada, the United States and several European countries in the global coalition against ISIL announced temporary withdrawals of their troops from Iraq and from NATO Mission – Iraq. Meanwhile, Operation Inherent Resolve announced that it had stopped training Iraqi security forces, as the Iraqi military also suspended its trainings to reduce the spread of the virus. Against this backdrop, ISIL has actively called for its members to ‘act’, encouraging supporters to ‘exploit disorder’ and is increasing the pace and violence of attacks, taking advantage of the drawdown of international troops.

Countering corruption risks in defence must therefore become a priority. Doing so would limit the risks of abuses of civilian populations, illegal trade of cultural property, of theft or diversion of already limited resources, and would ensure that Iraq’s defence institutions can respond to the multiple challenges it faces. Iraq has seen the consequences of a poorly governed and corrupt defence sector: the military cannot afford vulnerabilities akin to those that enabled the rise of ISIL in 2014. At the time, corruption fuelled problems which left troops hollowed out and outnumbered, such as equipment theft and ‘ghost soldiers’ – members of the military whose names were registered and salaries disbursed, without being present in military ranks. ISIL actively used these issues as recruitment tools in its propaganda, and militants developed government functions in areas where relations with government had deteriorated for years. The group benefitted more concretely from the erosion of security services, where corruption had thrived, to take over swathes of territory, leading to the prolongation of the conflict. Despite the military defeat of the group in 2018, these vulnerabilities remain and risk weakening the Iraqi armed forces when they are most needed.

Iraq’s defence institutions and oversight are severely lacking, and do not fulfil basic requirements of anti-corruption and transparency. Yet they can no longer afford a weak stance on corruption, nor on human rights. To avoid exploitation of existing vulnerabilities and erosion of the defence and security forces similar to those that led to Mosul’s fall in 2014, the government must turn its attention to defence governance, and tackle existing vulnerabilities such as those highlighted by the GDI. The incoming government is in a unique position to do so, and has already pledged to investigate the allegations of torture disclosed by the UN. The government could also take concrete steps and measures to strengthen integrity and accountability within the armed forces. In addition, both the new Defence Minister, Juma Inad, and Interior Minister, Osman Ghanimi, have extensive and highly respected military backgrounds and an in depth understanding of Iraq’s security challenges which could support reform of the defence and security sectors.

International partners have a critical role to play and should actively promote instilling anti-corruption systems into longer-term institution building and reconstruction efforts. For instance, international partners should prioritise including anti-corruption and integrity building within training courses and partnerships with the armed forces. They could also, as a means of supporting longer term development of defence institutions, support the development of accountability structures, such as streamlining a code of conduct for all military forces, developing and implementing mechanisms to allow whistle-blowing and whistle-blower protections within the armed forces, and setting up clear systems for investigations of allegations of abuse.

Armed groups in the country and its neighbourhood are becoming more belligerent, taking advantage of the pandemic and withdrawal of international forces. In this context, weeding out corruption in institutions, and strengthening anti-corruption mechanisms in the longer term, will be essential for Iraq’s government to begin restoring trust, and for armed forces to effectively respond to security threats and the resurgence of non-state belligerents.

Benedicte Aboul-Nasr is a Project Officer at Transparency International – Defence & Security. Her areas of focus are the MENA region, and how corruption affects conflict and security in the region.

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 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

Corruption is widely recognized as one the major stumbling blocks in US government efforts to improve the capacity of foreign defense forces to address shared international security threats over the past 15 years.

This report assesses the current state of US arms export controls to identify and curb corruption in US arms sales. It first highlights critical corruption risk factors the United States should consider in order to help prevent corruption and fraud in its arms sales. The report then assesses US laws, policies, and regulations aimed at identifying and mitigating corruption and fraud risks in US arms sales.

Defence industry players, elected officials, the defence bureaucracy, and governments in the Middle East 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, including increased exports of arms and defence services to Saudi Arabia and the United Arab Emirates which began under the Obama administration and have ramped up under President Trump.

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

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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

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