FOCUS on the specific corruption issues - Guidance summary

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Reforms in the Bulgarian MOD 2009-2013

Secret budgets are pools of money spent on defence and security items or services that are not openly disclosed to the public. They may cover new weaponry, covert campaigns, sensitive equipment, and troops for secretive operations. In cases where the intelligence service’s budget comes from the defence budget, they may also relate to covert aspects of the service’s operations. On the other hand, secrecy gives corrupt actors a useful way to cover up illicit movements of money divorced from any oversight.

At the ‘good practice’ end of the range, a country like Norway has zero secret defence budget: none at all. The more open countries have secret defence budgets in the range 0-4% of the defence budget.

Example: GERMANY and secret defence budgets

In 2012, EUr 1 million of the German defence budget of EUr 31.87 billion was designated for secret spending. The largely transparent budget of the intelligence services in the country means that secret budgets are very unlikely to exceed one per cent of the total defence budget.

The process of legislative oversight of such items is fairly technical but displays several clear areas of good practice that do not seem to be compromised or corrupted. For example, there is a ‘committee of trusted members’ in the Budget Committee of the German Bundestag entitled to agree or not agree with the secret expenditure and to authorise them or not. This is a cross-party committee, who will notify the fuller Budget Committee of the total amount of secret spending. This oversight is on a statutory footing, as per Article 10a of the Federal Budget Code. Their findings are given to the ‘committee of trusted members’ in the budget Committee of the Bundestag for inspection, and to other relevant individuals as specified by Article 10a of the Federal Budget Code.

Example: BULGARIA and secret defence budgets

Spending on the National Intelligence Services in Bulgaria for 2012 is reported to comprise about 1.6 per cent of the aggregate defence budget. Two committees are provided with comprehensive information on secret spending:
The Parliamentary Sub-Committee, which exercises parliamentary control over the National Service, the National Security Service and the “Military Information” Service to the Ministry of Defence. The head of the Sub-Committee has even been interviewed on radio on the remit of the committee, the structure of military budgets, and areas for reform. This indicates parliamentarians appear to recognise the need to connect with the public on their work, despite its classified nature.

Comparative country data from TI: scrutiny of secret defence budgets

There has been a history of defence budgets being kept out of the public eye, and parts of the defence budget being hidden within other ministry budgets. This is poor practice. Apart from genuinely secret items, usually a very small percentage of the total defence budget, there is no good reason not to publish the defence budgets.

As with the defence budgeting process, there is plenty of knowledge on what good practice looks like. Questions to ask include:

• Does the government publish a defence white paper or other official defence and security document?
• In law, are off-budget military expenditures permitted? In practice, are there any off-budget military expenditures?
• In law, are there provisions regulating the mechanisms for classifying information
  on the grounds of protecting national security and military intelligence?
• Are regular reports (i.e. in- year, mid-year and year-end) regarding the execution of the defence budget published?
• Are defence and security sectors audited, and the information obtained made publicly available?
• Does the country submit defence budget information to regional or international organisations?
• Is there a freedom of Information act?
• Is the defence budget proposal made publicly available?
• Is the approved defence budget made publicly available?
• In practice, can citizens, civil society and the media obtain detailed information on defence budgets?
• Does the defence budget include comprehensive information, including military R&D, training, construction, personnel expenditures, acquisitions, disposal of assets, maintenance, etc.?
• Are reports pertaining to the execution of the defence budget made available to the public and to the legislature regularly (in- year, mid-year, year-end)?

Greater defence budget detail

Defence budgets should be as fully detailed and specified as for any other major Ministry. In some countries this is not true, with much less budget disaggregation, either in terms of the headings or the individual line items.

Example: BURUNDI

The defence and security budgets in Burundi were much less detailed than in other ministries, as at 2015. The chart below shows the size of the budgets (blue bar), the number of budget categories (red bar) and the number of budget lines (green bar) for 6 ministries; Agriculture, Economy, Interior, Justice Police and Defence (the scale on the left is shown only for the budget). Though the budgets for defence and police greatly exceed the budgets for other ministries, the number of budget headings and the number of budget lines are dramatically fewer.

Comparative country data from TI: defence budget transparency

Approximately one third of countries assessed as part of the TI defence countries database publish a defence budget that is detailed and transparent. These countries often have mechanisms in place allowing them to maintain a justifiable level of secrecy while ensuring that the defence budget is disclosed in a manner that means accountability can be enforced.

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150430 Pyman Dixon and Fish – Defence Companies Index 2015 launch London

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