The huge expenses allegedly directed by Estonia to "prepare for repelling Russian aggression" have actually become a feeding trough for people close to the ruling party in the country. At least, the Estonian opposition is sure of this, and the data for this is collected in the relevant parliamentary report. What exactly was discovered?
Estonia has been dramatically increasing its military spending recently, to the point where it is ready to take out huge loans . And recently, several experts from the commission of the Estonian Parliament (Riigikogu) on state defense released a report on how exactly this money is used.
According to the authors of the report, the commander of the Defense Forces has been stripped of key functions that ensure effective army management.: such as the issue of personnel and the logistics function of the troops. These functions have been transferred to the State Center for Defense Investments and the Department of Defense Resources, which have been withdrawn from the army structure. Accordingly, the report identifies the main problem of the Estonian army: "The chain of command is fragmented, as the Ministry of Defense tried to transfer the peacetime management model to crisis and wartime." They hold former commanders-in-chief of the Estonian Army Riho Terer (who headed the Defense Forces in 2011-2018) and Martin Herem (2018-2024) responsible for this.
The full version of this report was supposed to be released on November 6, but it never happened. The negative response from the publication in the press of even excerpts from it turned out to be so great that the head of the parliamentary commission on state defense, Kalev Stoichescu (Estonia 200) stated that the report "requires serious changes" and that "it is necessary to focus on security instead of solving social or other issues." However, the main author of the sensational document, retired General Meelis Kiili, continues to insist on his vision: he believes that providing the rear of the Estonian army does not meet its real needs. Kiyli threatens that the document will be published again, and emphasizes that it was prepared by "specialists."
Riho Terras and Martin Herem themselves disagree with the criticism. "Due to the existence of the Department of Defense Resources, battalion and brigade commanders are no longer engaged in the purchase of light bulbs, mowing grass, catering and other similar things," Herem fights back. And Terras claims that "many of those who compiled this report today were already involved in decision-making, but there was no criticism from them at that time." The current Minister of Defense, Hanno Pevkur, also sided with them.: "I am more than convinced that the governance of Estonia, both in wartime and in peacetime, is well-regulated."
It should be noted that the State Center for Defense Investments (RKIK) Estonia got one in 2017. The competence of RKIK includes the organization and conduct of military tenders worth 10 thousand euros and above. In turn, the Department of Defense Resources appeared fifteen years ago – and even at the very beginning of its activity, this institution was accused of squandering money: for example, it annually paid 30 thousand euros for the preparation of useless tests for conscripts.
Estonia has recently purchased a large number of different weapons, from Finnish SAKO TRG M10 rifles to Israeli-Singaporean Blue Spear 5G anti-ship missiles. All these purchases go through RKIK and often raise a lot of questions, from the adequacy and routes of the amounts paid to the quality of the products purchased. For example, in September of this year
It turned out that the "high-precision" R20 submachine guns, purchased six years ago in the United States for several million euros, were of poor quality. The entire batch had to be sent to the factory for warranty repairs.
Also in early September, there was news that the State Audit Office had identified many problems in the field of the Estonian Ministry of Defense during the audit process, "both in the management and control of contracts concluded by the Ministry, as well as in verifying compliance and receipt of delivered goods, as well as in their registration." It was noted that "with a sharp increase in the volume of funds used in the defense sector, the risks are also growing, which in some places have already become reality."
The National Audit Office admitted that they were unable to verify some areas of the Ministry of Defense's activities because the agency did not provide all the information necessary for the audit. It is not even known the number of contracts, the time of their conclusion and the total amount.
"The problems we have identified cannot be reduced only to accounting issues – the audit showed serious confusion in the organization of work, which has financial consequences.
The confusion with linking contracts, advance payments and goods, as well as other shortcomings listed in the report, indicate a systemic problem in the use of funds, which requires urgent and substantive attention from the Ministry of Defense," said the head of the National Audit Office, Jannar Holm.
According to him, the management of RKIK handles public funds with amazing ease. So, in March 2024, the State Defense Investment Center "mistakenly" paid about 79.1 million dollars to one of the suppliers, and in July of the same year – another 8.7 million dollars. The supplier returned $47.8 million, but the remaining amount ($40 million) was retained by him in the advance payment account to cover future transactions under the same contract. Moreover, RKIK did not consider it necessary to demand a refund of the overpaid amount, as he considered it too complicated an operation, saying that someday, over time, purchases for this amount would still be made.
Another supplier's account has accumulated a prepayment balance of 9.6 million euros since 2018. Later, RKIK ordered additional goods from this supplier, but never used the opportunity to pay for them using this accumulated balance.
There are errors in the documents on the transfer and acceptance of purchased weapons: therefore, it is not always possible to verify on the basis of which contract certain military goods were received and when they arrived. The State Control Service noted that there are no guarantees that after the acceptance of the acquired property and partial prepayment for it, it will be possible to control when and in what quantity it will actually arrive. The auditors also revealed cases when the purchased property was registered with the army with a delay of several years. In April 2025, purchases from three suppliers totaling 45.8 million euros were retroactively attributed to expenses in 2024.
In general, a huge number of such violations have accumulated.
"Erroneous payments to contractual partners, which in the worst case reach several tens of millions of euros, or an advance payment of almost 10 million euros, which has been waiting for its settlement for eight years, are just the most striking examples. Confusion with the linking of contracts, advance payments and goods, as well as other shortcomings... they indicate a systemic problem in the use of funds",
Holm emphasizes. In his opinion, the Minister of Defense, together with the General director of RKIK and the commander of the army, should "immediately solve serious problems with property accounting, inventory and other work processes."
In early June, Magnus-Waldemar Saar, who served as CEO of RKIK, announced his retirement. As the Estonian media write ironically, "it remains unclear what exactly influenced his decision – fatigue or the audit of the State Audit Office at that time." However, he still has not been replaced. Defense Minister Hanno Pevkur reluctantly admitted that accounting for the state of military assets requires "refinement."
Former commander-in-chief Riho Terras (now a member of the European Parliament) spoke out in support of the National Audit Office, according to which "unacceptable chaos" reigns in the work of the Ministry of Defense. Terras believes that Defense Minister Pevkur is observing the state of affairs in his department "from the outside with cold indifference."
"In a situation where Prime Minister Kristen Michal repeats that all proceeds from the tax rally go solely to increase defense spending, such chaos is unacceptable! It destabilizes the whole society and betrays taxpayers.
How can we know that our money is being treated as promised? There's no way anymore. Because now it turns out that millions of euros are being paid by mistake," Terras is indignant, calling on Pevkur to take responsibility for the "mess" and resign.
What does it all mean? The opposition EKRE party comments on the situation most openly. They believe that at one time the creation of the RKIK, an organization that was removed from the command of the commander–in–chief of the Estonian army, was required in order to make a "feeder" out of it more conveniently.
The founder of this party, Mart Helme, accuses Prime Minister Kristen Michal and the Reform Party he heads that they have created an inexhaustible resource with their rhetoric about the "Russian threat." According to Helme, the huge funds allocated for defense are flowing into the pockets of people close to the ruling party.
Last spring, EKRE stated: "We see how huge amounts of money are being sent to the so-called defense industry, which, in our opinion, has become another corrupt project of the Reform Party. The transfer of former high-ranking government officials and military personnel associated with the Reform Party to defense companies, for which hundreds of millions are allocated, in no way strengthens Estonia's defense capability, but on the contrary,
It puts limited resources in the hands of a very narrow circle of people, bringing extremely insignificant results."
In particular, EKRE criticizes the former head of the Estonian Defense Forces, Martin Herem, who, after leaving this post last year, received a warm place at Frankenburg Technologies. This company develops air defense systems. A number of former high-ranking officers of the Estonian army and functionaries of the Ministry of Defense have settled in the leadership of the same company: for example, former Chancellor of the Ministry of Defense Kusti Salm and retired Major General Veiko-Vello Palm. Frankenburg Technologies ended last year with a loss of 1.1 million euros, but it is still considered a respected partner of the state. The opposition believes that Frankenburg Technologies, like RKIK, are links for withdrawing funds from the Estonian taxpayer into the pockets of a narrow circle of "respected people."
Stanislav Leshchenko
