Corruption in Defense Equipment Procurement in the Czech Republic and Slovenia
We dare to claim that nothing stimulates the development of the military-industrial complex and the arms trade (both sales and purchases) quite like the threat of an impending war. A vivid example of this can be observed today, as Ukraine has become Europe’s hotspot, restraining armed aggression from Russia for the fourth consecutive year. Regrettably, this is not the only armed conflict burning near Europe’s borders, and there are few—if any—real signs of peace processes beginning.
Meanwhile, the information space is flooded with political analyses forecasting an escalation of Russian aggression and its spread into Eastern Europe. The Middle East also poses risks to European stability—not necessarily through direct military action, but definitely via waves of refugee migration, as has happened multiple times in the past.
Under increasing military pressure, Europe has sharply ramped up its procurement of defense equipment. However, production has proven to be a significant bottleneck. Thirty years of military conversion (from defense to civilian industry) have taken their toll. It turns out that both industrial capacity and qualified specialists are lacking. Rebuilding them is a lengthy, costly, and complex process—and war is always about money, and lots of it.
The arms market has never been known for its “cleanliness,” and the surge in defense spending has created fertile ground for corruption schemes. Opportunists eager to profit from war didn’t take long to emerge. Serious cases of tender evasion, price inflation, and involvement in future military supply schemes have been uncovered in the Czech Republic and Slovenia—both EU member states with established procurement systems.
For instance, Czech police and the Financial Analytical Office are investigating AKM Group Cz.a.s., suspected of fraud in arms supplies to Ukraine. The company’s accounts have been frozen, totaling $38.8 million in prepayments from Ukraine. The case centers around inflated prices for RPG-7s, S-8 rockets, and other equipment compared to similar offers from Ukrspetsexport and Bulgaria’s Arsenal LLC.
Another Czech initiative involving ammunition has also turned into a scandal. On AMOS–MoD’s initiative, 180,000 artillery shells were purchased. However, a Senate report revealed a CZK 2 billion (about €60 million) overpayment—roughly a 22% markup. The reason was surprisingly simple: contracts were awarded without competitive tenders, which is highly inappropriate for government procurement.
A joint investigation by OCCRP, BIRN, and the Czech Center for Investigative Journalism exposed a deal involving tens of millions of old Chinese-made munitions purchased by Czech military units. The markup on these deals reached up to 100%. The investigation also raised suspicions of involvement by organized crime groups.
Even non-military scandals reflect systemic issues. In February 2025, the director of Motol Hospital was accused of embezzling CZK 4 billion (about €150 million) through tenders and EU funds for personal gain.
According to Transparency International (TI) in its 2024 report, the Czech Republic scored 56 points. TI expressed concern over the opacity of public procurement procedures, with billions of CZK “disappearing” in murky deal chains.
Slovenia, too, found itself embroiled in a high-profile military procurement scandal. The case, which dragged on from 2006 to 2016, still echoed in 2025. Slovenia had ordered 135 Patria AMV armored personnel carriers (Finland) for €278 million. However, the deal was later tainted by corruption accusations, leading to legal proceedings and contract termination. Investigations in Helsinki and Ljubljana revealed that around €21 million had been funneled through affiliated intermediaries—Wolfgang Riedl (Austria) and Walter Wolf—to Janez Janša, Slovenia’s former prime minister.
In 2011, a Ljubljana district court sentenced Janša to two years in prison. Nevertheless, Slovenia’s Supreme Court overturned most charges in 2015–2016 on procedural grounds, citing expired statutes of limitations. In April 2025, Janša was acquitted of new corruption charges.
The armored vehicle procurement scheme in Slovenia revealed deeper systemic issues: a weak legal framework, political pressure, and lack of accountability for major actors. As a result, public trust declined—39% of Slovenians believe the office of the prime minister is corrupt.
The Czech Republic and Slovenia are just examples of how the defense sector in the EU remains highly vulnerable to corruption. Even in countries with functioning democratic institutions, serious violations amounting to millions of euros are possible.
Such examples make it clear that defense spending and major state projects—from hospitals to weapons—can become hotbeds for corruption, tender manipulation, and misappropriation of public funds. Moreover, these are only the scandals that have come to light. There are likely many more, involving indirect compensations and deals hidden under Article 346 of the Lisbon Treaty (“state secrecy in defense”), which hinders transparency and public oversight, effectively fertilizing the soil for corruption.
As long as verification systems remain formalistic and subject to political influence, these schemes will continue. The EU and national governments must urgently reform procurement systems and strengthen both preventive and punitive measures.
From shady intermediaries to billions in overpayments, these corruption schemes threaten budgets, security, and trust in government institutions. Without a systemic approach—transparent tenders, comprehensive oversight, and effective enforcement—similar cases are bound to recur across Europe.
Today, as Europe faces mounting military, economic, and social threats, it cannot afford to lose billions to those seeking to profit from the very systems meant to ensure its safety—because security, ultimately, is always a matter of enormous financial investment.