Autor fotografie: redakce|Popisek: Commission's meeting on the 13th August
According to the invitation, yesterday's meeting of the Senate Standing Commission on Oversight of Public Funds had on its agenda the topic of the Czech Ammunition Initiative for Ukraine. However, senators from the ODS and KDU-ČSL clubs did not agree to discuss it. Lukáš Wagenknecht (Pirates), chairman of the commission and author of the explosive intelligence report, published his report.
The fact that the discussion of the item would not be an easy matter was indicated even before the meeting started by the reproach of Ostrava Senator Zdeněk Nytra (Spolu) towards the chairman Lukáš Wagenknecht that the commission members had not received the documents for the meeting in time. In addition to him, the vice-chair of the commission, Tomáš Goláň (SEN 21), and Senator Jitka Seitlová (KDU-ČSL) also spoke against the inclusion of the topic of the Czech munitions initiative during the discussion of the agenda. They accused the chairman of the commission of having sent the documents for the meeting only the previous afternoon and therefore they did not have enough time to study them, and also that the topic, in their opinion, was intertwined with classified information and should be discussed in classified mode. This view was backed up by Deputy Defence Minister Daniel Blažkovec, who said that outside the restricted mode he would have to limit himself to "correcting untruths" that had been expressed in the media.
The information contained in the report was verified by the Ukrainian Parliament
Senator Goláň described the findings contained in the report as serious, saying that he needed to see the basis on which the report was based: "I understand where you are going with this because, if we want to help Ukraine, if it were as you say, we could help Ukraine more." And he suggested dealing with this point sometime in the future together with the Foreign Affairs, Defence and Security Committee of the Senate. "I'm not opposed to dealing with it, but let's try to do it in a way that meets all the regulations," Senator Nytra said. Senator Wagenknecht replied to his colleagues that he had been working hard all weekend on the material presented, his report, verifying data and incorporating new information.
He had prepared the background documents for the Senators – six pages of documents in fact. He stressed repeatedly that none of the documents he had worked with were under any kind of classification regime, and they were from open sources. His sources were the media, the whistleblower mentioned in the report, whose identity the Senator knows but does not disclose. "The information is verified by the Ukrainian parliament, the committee that deals with this (...) which has verified it at the level of the Ukrainian Ministry of Defense." He saw the reason for the hearing mainly in the fact that the ammunition was overpriced by CZK 1.4 billion, with the Czech Republic participating in the initiative by brokering the deal. He stressed that this was an urgent matter that had implications for people's lives in Ukraine, in that the Ukrainian Army was being supplied with less ammunition than it could. Senator Michael Canov (SLK) supported him, adding that the subject was already in the public domain and, despite the reservations expressed, the Commission should discuss the item.
Senator Wagenknecht: MoD and AMOS have failed and Ukrainians have less ammunition
Subsequently, Senators Wagenknecht and Canov voted in favour of the inclusion of the topic, Senators Nytra, Golan and Seitlova abstained, and the program point was removed from the agenda. Security Magazine asked the chairman of the commission for an interview:
The Commission removed the point on the munitions initiative from the agenda. Arguments about the impossibility of consulting the documents and concerns about confidentiality or security did not convince you. How will the situation develop further?
Firstly, the arguments mentioned are nonsensical. I have all the documents and supporting documents from public sources, from various people and media, and I have them verified by Ukraine. There is nothing secret here. Further developments? I don't know. Some colleagues have decided that they do not want to discuss it. I have to say that I have not seen this before as a senator. It's a unique experience. There have been cases like the overpriced covid masks in the past. The figures involved were also terribly secret at the time, although everybody knew them. There is a constant haunting of a kind of confidentiality here. If I have the data and nowhere does it say that it is secret, it is all nonsense. I am beginning to get the impression that this secrecy is being abused to overprice contracts, or I don't understand. But maybe it's more about the MoD's inability to buy the ammo efficiently. Maybe that's the reason for the secrecy. They are unable to buy effectively, so they prefer to keep it secret so no one will know. That's it.
And you're going to put that topic on the next commission meeting, or like it was mentioned, on a joint meeting between the commission and the defense committee?
Under the standard process, the item was taken off the agenda, and that's final. This is really new to me. I need to discuss with my colleagues what to do next. Formally, my colleagues killed it today. That's it.
In your report, you referred to the ammunition initiative as crucial to Ukraine's success. So your criticism is not directed at the initiative or at support for Ukraine, but at the risks of an uneconomic approach to munitions procurement, is that right?
Exactly. What I am saying is that because the Czech Ministry of Defence and AMOS are buying expensively, and that is their failure, the Ukrainians have less ammunition. There are some figures in my report. The real ones may be much worse. That is what I thought we were going to discuss today and move forward to address. This is about international cooperation. If the Ukrainians do not get 20 000 shells because it is so expensive, then the whole impact of the problem described is very negative. It is great to try to get a lot of money, but the result is that less grenades are bought, and people are dying in Ukraine.
The institutions behind the initiative argue about transparency on security grounds. You mentioned, for example, a similar British initiative, which is very transparent. How do you explain the different Czech approach?
It is all nonsense. They argue that the British are slow, which is also nonsense. I have checked with them. They list everything on the internet – in general terms, of course – they don't give details like which way the ammunition will go – and they say, 'now we're going to buy ammunition, now we're going to buy machine guns, whoever you want, apply for the tender' – then they evaluate it and send it on. In the first round it took a while, now it's quicker. But it's not extremely fast for us either. Then the second thing is that in dealing with public money, whether it's Czech, whether it's German, whether it's Danish, the argument that it's secret because we have to buy it secretly, and if it's overpriced it doesn't matter, that's demagoguery.
Among your findings, you mentioned the overpricing of ammunition acquired by Germany, compared to the normal market rate. Prices are moving. Senator Nytra also said that there could be a million reasons why the prices are higher today. Could not Russian interference have had an effect on those amounts, or to what extent do you think it has?
My general understanding is that the purpose of the ammunition initiative is to bring member states together to tender at the same time so that they do not create competitive pressure among themselves. That is, so that a Czech, a German, a Dutchman don't buy from one Turk at the same time. Then of course logically the seller could play the prices differently. What is important there is the efficiency of the whole process, because of course Russia wants to buy ammunition too, if only to limit our options. In this case, I am not worried about buying from two different companies where the price could be different, but at one time a Turkish-controlled company offered one price to the Czech Ammunition Initiative, which then increased it by some costs that I don't think are relevant, but whatever. And at the same time a Ukrainian could have had the same ammunition, without that increase. The same goods, at the same time. And what happened? The Ukrainian doesn't have the ammunition yet, and it's expensive. The data I have confirms that.
You talk about Germany knowingly buying overpriced ammunition, which you call illegal. Are you planning any legal action on this matter?
I don't put it that way. I am just saying that the Czech authorities, the Ministry and AMOS, are buying it more expensive than is the usual market rate. That is one fact. The second fact is that Germany, Denmark, and sometimes the Czech Republic pay for it. And they claim that it is the German's business because he agreed that it would be expensive. If that is the case, and I do not believe it is, then either the German is knowingly buying expensive, which is illegal in the Czech Republic and in Germany, or he has relied on the Czechs, maybe that is the second thing, or his verification has failed. If I understand it, they are verifying it through some kind of audits, then whoever is doing the audits probably didn't have the information that I have at the time. But if I, Senator Wagenknecht from Prague, have the information, how come the German side does not have it? So there are three possible conclusions, I do not see any other possible explanation. But the consequence of the Czechs not being able to buy is that Ukraine has less ammunition.
In the case of the 180 000 pieces of ammunition mentioned, is this a purchase through a particular one of the five Czech companies or across all the companies involved?
That was one contract. But I understand that there are more than one company involved in the initiative. It's terribly secret, yet it's on the internet. And I think I would underline that. If the information here is available on the Internet like this, someone is probably failing the classified information regime, and they should probably fire someone. But maybe I'd say it's more about exploiting leaks and scaring people. If I have the information, it was one of the companies in the pool. But I'm not going to fight any company here. It's their business, their offer that was accepted, that's all. It's a secret that we are supplying ammunition, but on the Internet the Prime Minister, the Minister of Defense, the President say that it was 180,000 pieces of ammunition and that something has already been exported. So is it secret or is it not secret? It was one shipment, some of it was stockpile ammunition, some of it was new ammunition, and I have a price benchmark for the old one. It went through a Czech initiative, through a Czech company, and then there's the extra cost. If they could have done it differently, it would have been 1.4 billion cheaper. Either they don't want to do it or they can't. I don't know.
You mentioned the problem of excluding small and medium-sized enterprises from the initiative. Is the argument of necessary secrecy for security reasons not relevant in this case?
It also applies to large companies. I quoted from the European rules on ammunition procurement. There is a nice little guidance explaining why we should compete in this area as well. Even in a regime with some exceptions. An exception might be when a state buys from its own company for the needs of its own military, where it can be bought in order to support domestic industry. Further, there is an exception when the matter is confidential. In our country everything is confidential, so there is this exception. But in general you cannot make an exception so as not to compete. Yet just because the process is not a competition under the law does not mean you are not competing. You still have an obligation to select the lowest bid if possible. In this country, they don't seem to know how to shop, so they put the contract in classified mode.
The pledge of 800,000 grenades, and there were various reports of higher figures, a million, a million and a half, was subsequently reduced down to 500,000. You described the original 800,000 as incomprehensible because it would imply an unrealistically low price for the grenades. Have you had the opportunity to confront the Government on this matter?
The 800,000 figure comes from a press release from the Ministry of Defence, from their website. And then in a later report they said 500,000, they lowered it. So they themselves say one thing, and later they say another thing. It is confusing information. And in general, when I look at it, and I have talked to the Ukrainian side about this, if you promise 800,000 shells to somebody, they will somehow plan some volume of ammunition that they will then deliver to the front. But then they find out that it is obviously expensive, so it will be more than a third less, and that must make the planning quite complicated. If you then divide those figures, if they said they had EUR 1.6 billion, which is another piece of confidential information, but it is on the internet and the Prime Minister, the Minister and I don't know who else says it, by the number of shells, it comes out to EUR 2 000 per shell. But then look at the price benchmarks. The benchmark price at the time was EUR 2 700. Then it really looks like someone doesn't know how to shop around.
You also talk about inadequate control mechanisms.
Yes, the interministerial commission that is supposed to provide oversight has met once so far.
Do you expect the output of that commission to provide any relevant input, at least for you as a legislator, or how is such a commission supposed to strengthen the transparency of these processes?
I was hoping that we would discuss this here today. We did not find out because my colleagues did not want to discuss it. The commission has met once, and yet about a third of the funds for the initiative have been spent. And they're not very fast. I get it, it's the holidays, the vacations. So in sum, they're buying expensive, they can't do it, they have a commission that can't meet, so I'm asking rhetorically if you understand. Wouldn't it be better than a commission to have a process for selecting a contract that would be verified by the market, and therefore have a good bid that nobody would say is expensive?
In Britain, for example, they have an international panel where the various donors have representatives who assess those bids and prices. In this country, we have a panel that has met once. And if we have a control mechanism whereby the donor state is responsible, that is not a control mechanism, that is an alibi. I think the ministry needs to think about that. And if they can't do it, then okay, let them give it to the UK to implement it for them. I have no problem with that. They just can't do it. Let them get the money and give it to a country that can do it, like Ukraine.