Estonia’s Defence Minister Hanno Pevkur has resigned after a €70 million ammunition deal intended to supply Ukraine blew up into a procurement scandal. Estonia agreed to purchase artillery shells from Datasel, an Italian-registered company owned by India’s Neco Defense Munitions, despite the companies having no established history of selling artillery shells. Millions were paid in advance, deliveries ran into problems, Estonia terminated the contracts, and the dispute has now gone to arbitration. This is what happens when government declares everything an emergency and suddenly the normal rules surrounding public money become inconvenient.
Pevkur says he did not negotiate the contracts and had not even read them. His explanation was rather revealing: “The defence minister does not conduct contract negotiations. The defence minister does not count socks and ammunition.” He said his responsibility was making the fundamental political decision to support Ukraine. He nevertheless resigned because the National Audit Office’s findings raised the question of political responsibility. At least somebody in government still remembers what that phrase means.
The scandal goes directly to the problem with Europe’s entire approach to Ukraine. The politicians declare that Ukraine must be supported at any cost, and once you use those words, cost ceases to matter. Due diligence becomes something bureaucrats complain takes too long. Money must be spent immediately because politicians tell everyone that Europe itself will fall if another artillery shell does not reach Ukraine yesterday.
Estonian officials have essentially admitted that extraordinary risks were accepted because of the urgency surrounding Ukraine. One official told reporters that they knew these procurements involved “greater risks than usual” but believed those risks were justified by what was at stake. There is the entire problem in one sentence. When government decides that the political objective is important enough to justify greater financial risk, taxpayers become the insurance policy when something goes wrong.
Hellbound and Down 