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Theft, graft in defense industry equals terrorism - Putin

Theft, graft in defense industry equals terrorism - Putin
Russian President has charged federal control agencies with the task of developing a strict control system preventing any abuse of funds allocated for the re-arming of the Russian military forces.

Any misuse or theft of budget funds reserved for the state defense order must be seen as a direct attack on the national security,” President Vladimir Putin said in his annual address to the Federal Assembly on Thursday. “Such facts must be investigated just as seriously and strictly as the facts of sponsorship of terrorism.”

The president ordered to step up the control over the use of money allocated for the state defense order. In his speech he mentioned the Defense Ministry and the Rosfinmonitoring agency, which works to prevent money laundering and financing of terrorist structures and also “other interested agencies.”

Putin urged strict control on the whole length of the suppliers’ chain and noted that the responsibility of companies for the spending of every ruble from the budget must be increased.

He noted that at a recent meeting with the defense industry’s top brass he had learned about cases of unprecedented and unexplained price hikes exercised by defense contractors.

On certain products the prices went up two, three or four times and in one particular case the price was increased 11-fold since the beginning of the works. You understand that this cannot be compared either to inflation or to anything else. Especially given the practically-100 percent advance payments,” Putin said.

Thursday’s address to the Federal Assembly – the gathering of both houses of parliament, cabinet, regional leaders and other dignitaries – saw the president outline his view on various events in Russia and in the world. The annual speech gives a general outline of the plans for the next year.

Also on Thursday the top official in charge of Russia’s military-industrial complex – Deputy PM Dmitry Rogozin – told reporters that he expected the state defense order to be fulfilled by about 93 percent without corrections and possibly by 100 percent if corrections to the rapidly changing international situation are made.

Russian Deputy Prime Minister Dmitry Rogozin (RIA Novosti/Sergey Guneev)

He also said that Russia would stop buying ready-made weapons from foreign suppliers, noting that the ongoing dispute with the French shipbuilders who failed to supply the Mistral amphibious assault ships in time, fixed in the contract.

The Mistral is a good example that confirms the correctness of our position,” Rogozin stated.

The official added that these figures could be seen as a good result given that state bodies had to reconsider many of the plans due to Western sanctions.

The Sevastopol amphibious assault ship of the Mistral class at the STX Europe shipyard in Saint-Nazaire. (RIA Novosti/Grigoriy Sisoev)

Russia is currently working on a major program of import replacement in the defense industry. The launch of the program was prompted by the sanctions, but Rogozin has said recently that the replacement would go on even if the sanctions are lifted.

In September, Putin ordered the winding up of two state agencies which were responsible for placing and executing weapons orders for the military. Their functions were transferred to the Defense Ministry, Finance Ministry and Audit Chamber.

Instead Putin has given presidential status to the Military Industrial Commission – the body that assures cooperation between the military and the defense industry. The president took personal control of the commission, while Rogozin was appointed deputy chairman of the body.