NATO secrecy hampering proper financial oversight

Lieuwe de Vries for Veenstra & de Vries Aviation Publishing

The North Atlantic Treaty Organisation keeps it’s financial cards close to its chest, perhaps a bit too close as the Dutch language paper “The Volkskrant” recently reported. The Netherlands Court of Audit has published a report warning that billions might be going unaccounted for due to opaque NATO financial reporting methods. It is feared NATO is too readily declaring financial information as classified or choosing not to disclose budgetary information. This leaves national governments with very little options to properly oversee how and where budgets are being spent.

NATO receives funding from its member states and as well as from some partner countries that are not formally members but that still participate in NATO projects and exercises. This funding is spent via three channels; Common funding, Joint Funding and Other Funding.

Common funding, which pays for the alliances military and civilian budget as well as the NATO Security Investment Programme (NSIP). NSIP pays for investment in facilities such as airbases, fuel pipelines and missile sites. The International Board of Auditors for NATO (IBAN) publishes auditing information for programs it has vetted. However the auditors are seriously lagging behind, the last information published by IBAN about the common funding budget was released in 2011 regarding audits done in 2010.

Through the second channel, Joint Funding, various NATO member states participate in project’s such as the “NATO Helicopter Design and Development Production and Logistics Management Agency (NAHEMA)” or the “NATO Air Traffic Management Committee”. Projects like these developed amongst others the NH-90 helicopter. Of the 40 jointly funded projects only 6 have a disclosed budget, shielding more then 80% of the Joint Funding budget from view.

Other types of funding are contributions by alliance members to trust fund arrangements, sharing arrangements and donations. Here too large parts, such as NATO Partnership for Peace Trust Funds and NATO’s Building Integrity Trust Fund, are operating under undisclosed budgets.

The Netherlands Court of Audit has tried to attain relevant information about many of the projects and financial procedures for six years but has come no closer to gaining a clear image of the alliances financial situation. With many European defense budgets under pressure this lack of accountability creates political tensions. Member states currently have little to no idea whether their contributions are too little, adequate or too much.

Perhaps therein also lies the reason for the level of secrecy. Though politicians might say they want to adjust funding to a sufficient level, whether that would mean spending more or spending less, the focus of European member states has historically always been on spending less.