Is your political career now over?

Time will tell. I don't think so, but of course I would like to start by congratulating Ülle Madise. I think Estonia has got a good president. I am very pleased that parliament was able to fulfill its constitutional duty to elect a president for Estonia.

Today really is a contradictory day for Estonian democracy. For you, I imagine, it will hardly go down as a day of celebration. You are the longest-serving minister in independent Estonia. Would it be fair to say that your world has just come crashing down?

Every politician has to accept that no position lasts forever. If you are a politician at heart and someone who cares about the country, then you make decisions based not on what matters from your personal perspective, but on what is best for the country.

In this case, restoring confidence in national defense required the lightning rod to take the hit. Perhaps I would draw a parallel: When [culture minister] Signe Kivi resigned, she was in no way to blame for Aavo Viiol going to the casino. If we look at the National Audit Office's criticisms, which mainly concern the Estonian Defense Forces and the Estonian Center for Defense Investments (RKIK), there is no getting around it. The minister has to take political responsibility and my job during the days I have left as minister is to give instructions to ensure that all the issues raised by the National Audit Office and the Prosecutor's Office are properly addressed.

Turning to your political legacy and your potential future, political observers have speculated that you had your sights set on at least becoming leader of the Reform Party, which at some point could also mean becoming prime minister. Is that now off the table? Has a line been drawn under that, with no coming back from this?

When Kristen Michal had to resign, many people thought it was all over for him, but today he is prime minister. When Siim Kallas passed away, someone recalled at his funeral that, I believe, at a party committee meeting in the 1980s, it was said that Siim Kallas was finished and would never be able to accomplish anything again. In reality, we know that Siim Kallas' career was only just beginning at that point.

So, judging by those historical parallels, I take it that it is too early to write off your political career.

Time will tell. Today, I have made no further decisions beyond taking political responsibility and trying to ensure that the Prosecutor's Office and the National Audit Office receive answers to all their questions.

But what decision or failure to make a decision are you actually resigning over? It sounds good to say that a minister is taking political responsibility, but what exactly are you taking responsibility for?

Political responsibility means taking responsibility for the area under your authority. If we take the various findings, for example, 32 of the 36 findings the National Audit Office made regarding the Estonian Center for Defense Investments have now been addressed. The Estonian Center for Defense Investments processes around 7,000 purchase invoices a year, yet there is a court dispute involving one contractual partner and that has attracted much greater attention. Likewise, the Estonian Defense Forces (EDF) has more than 1,100 locations where assets have to be inventoried and more than 200 million individual items that have to be checked in one way or another. Ultimately, all the activities carried out by these institutions fall within the defense minister's area of responsibility.

The National Audit Office titled one of its reports by saying that work processes remain disorganized despite the minister's promise to put them in order. Prosecutors are investigating the possible deliberate failure to submit documents. These issues and the question of confidence in the entire defense sector are considerably more serious. Do you acknowledge that there is a certain social consensus in Estonia to increase defense spending very sharply, which has meant many other things have been left undone, many sectors have had to make cuts and have taken a serious hit and that this disorganization is in fact undermining confidence in our defense capabilities?

I don't agree that it amounts entirely to disorganization. Let me give you a few more examples. Our decision to increase defense spending from 2 percent to 5 percent [of GDP] was a deliberate choice and decision. It has meant that over four years, defense spending has risen from €768 million to €2.4 billion, but the systems have not kept pace. Clearly, there are now more assets, while the IT system and the way the Defense Forces' accounting system interfaces with the State Shared Service Center have not been made to work properly together.

That allows the National Audit Office to say that accounting for defense-related stockpiles remains inadequate.

There is another issue here. The Defense Forces — regardless of whether the defense minister was Jüri Luik, Urmas Reinsalu or someone else — had an exemption under which it did not have to record all of its assets on its balance sheet. That exemption was abolished during my time in office so that all of those assets would be recorded on the balance sheet. In our written response to the National Audit Office, we also provided a detailed action plan setting out what we did from last year through this year.

Now that we have received new findings, there is a new, 11-page action plan with specific measures, specific people responsible and specific deadlines. It is an ongoing process, but certainly every purchase made by the Estonian Center for Defense Investments for the Defense Forces and to strengthen Estonia's defense capabilities has been made for the right reasons.

Estonia paid nearly €70 million to a company that had never previously manufactured a single artillery shell and has yet to deliver a single functioning shell to Estonia. How do we know that this was simply one bad decision rather than a systemic management failure?

I think the best way to get clarity would be to conduct an investigation. Contract negotiations are handled by the Estonian Center for Defense Investments. As a ministry and as minister, we had to trust — and I did trust — my team. Naturally, we trust our team.

You listened to the interview with the former head of RKIK, in which he said that this deal was an exceptionally high-risk transaction and that the entire deal was printed out on paper and brought to the offices of the minister and the secretary general.

Not only this deal, but...

You saw the risks involved in this deal. You were aware of them.

The minister does not negotiate contracts.

If this was an exceptionally high-risk contract financed with European Union money, with the liability falling on our state budget, as the National Audit Office has now established, then if the contract goes bad — did the former head of RKIK come into your office, show you the documents and say, "Look, minister, here are the risks. Are we going ahead with this contract?"

We have ministerial decision-making meetings at the Ministry of Defense attended by many heads of agencies within the ministry's area of government. Certain issues are discussed in a smaller group and others in a larger group. Regardless of what RKIK brought to those meetings — and naturally, it provided information about what we were supplying to Ukraine...

The question is very simple: Were you aware of these risks or not?

It is true that the head of the Estonian Center for Defense Investments said that all assets being procured for Ukraine were high-risk. He also said that those risks had been made clear to the funders and donors. It was not only the European Commission; we had other funders as well. With the other contracts, those risks did not materialize, even though the risks were just as high.

Let me explain those risks. First, Estonia had launched the initiative to provide one million artillery shells at the time. Second, there was a need to help Ukraine and we believed it was right to make decisions and help Ukraine. Third, at the time when artillery shells were being sought and the one-million-shell initiative was launched, shells were being offered through intermediaries because manufacturers and countries often did not want their involvement to be known. They were from the African continent, from Asia and perhaps from the Balkans — those countries did not want it to be known that they were sending anything to Ukraine.

How many such deals has RKIK actually facilitated in which the money came from third countries, Estonia was the party signing the contracts and it was not entirely clear who would ultimately manufacture the ammunition or equipment? Are many more of these high-risk deals likely to come to light in the near future?

As I said, most of the contracts have now been fulfilled.

What sort of sums are we talking about?

I may be wrong about the figure, but I think it was somewhere around €500 million to €600 million in total, with the bulk of the funding coming from frozen Russian assets as well as from some donors. Compared with the Czech initiative, that is only 10 percent. I believe the Czech initiative involved €4 billion or €5 billion — the amount handled by the Czech state in a similar effort to support Ukraine. So we still have to keep the broader objective in mind: supporting Ukraine as quickly as possible and as much as possible.

Those contracts did indeed also involve the European Commission. Every contract was always coordinated among three parties. Ukraine had to say that it wanted the ammunition and was prepared to receive that ammunition from the country in question. Then there was the donor, regardless of whether the funding came from frozen Russian assets or from one of our European Union partners, and RKIK. They always went through this three-party process. To my knowledge, none of the other contracts have encountered problems like those involving this one supplier.

Why were these contracts not provided to the National Audit Office? At today's (yesterday's — ed.) meeting of a Riigikogu committee, the National Audit Office repeatedly said that it had not received these contracts and, as I understand it, that is also why prosecutors opened a criminal investigation.

I said last year that these contracts must be provided if there are no restrictions preventing it. The National Audit Office has staff who have access to confidential information and state secrets. I was also surprised at the committee meeting to hear that there had been some kind of problem. Over the course of today, I have learned that what was said at the committee meeting — that RKIK sent the contracts to the National Audit Office on June 5 — was true. Due to a technical malfunction, the contracts did not reach the National Audit Office, but RKIK did send them. Experts will have to determine why that happened, but the fact remains that RKIK sent the contracts.

Is it really morally possible for your successor to ask for even more money for defense when the existing funds are still not being properly accounted for and, as I understand it, these problems will not actually be resolved for several more years because the problems with Defense Forces asset management run deep?

First, the fact that the Estonian people have been willing to commit 5 percent is a major effort by society as a whole. Naturally, the Defense Forces' primary task is to demonstrate that all the assets and stockpiles it has are properly accounted for. Second, as far as the new minister is concerned, we understand that we have entered an election period and naturally my resignation is also colored by that. I have heard that the complaint to the Prosecutor's Office was filed by Comrade Mr. Tšaplõgin (Aleksandr Tšaplõgin, Center Party — ed.).

You've prepared well for today's show, haven't you?

I'm telling you what I know.

Very interesting information. By the way, when will your last day in office be?

That largely depends on when the new minister takes office, but the new minister probably cannot take office before parliament reconvenes. Parliament is currently in recess, so I believe it reconvenes on September 14.

But to wrap up the issue of the National Audit Office and the Prosecutor's Office, I would genuinely like to know where the real problem lies. Is there a particular accountant somewhere who failed to submit certain reports or enter certain documents? Is it a systemic failure, with the Defense Forces having failed to do something? Or, as we heard from the Prosecutor's Office, does there have to be a specific individual who can be held accountable? I would very much like to know who that is and of course I am prepared to assist the Prosecutor's Office.

Taking the National Audit Office's report as our starting point, it still says that accounting for defense-related stockpiles remains inadequate. Given the level of Estonia's defense spending and given that we are, after all, talking about lethal weapons, this is actually a very serious allegation. As the auditor general also pointed out rather emphatically, in the hands of people with malicious intent, these systemic shortcomings could very quickly become extremely dangerous.

People with malicious intent can cause problems in any system.

And that is precisely why safeguards and transparency are so important in the Defense Forces as well.

I completely agree.

So how do you actually put this right?

We need to complete the measures that I instructed the Defense Forces and the Estonian Center for Defense Investments to carry out last year, but which were only partially completed. That is also evident from the National Audit Office's audit, which says that the minister issued the instructions, but that not everything was put in order in time.

Why wasn't it done?

I also spoke with the commander of the Defense Forces and he says that if he were required to urgently carry out a full inventory — which we have asked for and, in effect, ordered under the new action plan — the initial assessment was that he would have to suspend Defense Forces operations for four months. I don't know whether that is objectively the case or not.

Listening to the commander of the Defense Forces at the Riigikogu committee meeting, should we perhaps simply accept that, given the current security situation, better record-keeping isn't possible? Should we instead change these cumbersome rules?

No, we should not accept that because every taxpayer has the right to know where their money is going. I am more than convinced that all the defense capabilities procured under RKIK's procurement plan, agreed upon in the Ministry of Defense's development plan and based on input from the commander of the Defense Forces, are capabilities Estonia needs and that they are there.

The question is how to get those 200 million individual items, ranging from cartridges to HIMARS and medium-range air defense systems, recorded under the correct entries. Let me give you an example: A HIMARS long-range rocket artillery system is not recorded as a single entry. It includes low-value assets, fixed assets and expense items and I believe they are recorded across six or seven separate accounting entries. The sheer quantity and volume involved is enormous.

That is understandably complicated. If the Defense Forces has outdated information systems, as has been pointed out today, which do not allow them to document these rapidly increasing investments and stockpiles, is that really a problem for the EDF Headquarters or is it a problem of political leadership?

It is primarily the responsibility of Defense Forces Headquarters and J8, which is responsible for financial accounting.

They don't have the people capable of carrying out that task.

Then those people have to be found. The Ministry of Defense allocated additional funding to the Defense Forces specifically to hire a 10-person team. Essentially, this is a team whose job will be to start inventorying assets, taking that burden off company sergeants major or other personnel. These people would do work that military personnel may not have been trained to perform, something the commander of the Defense Forces has also said repeatedly.

A great deal has been done. The new action plan is 11 pages long, it is detailed and it has to be implemented. Once it has been implemented, I hope that next year the new government will be able to reap the benefits of the measures for which I am taking responsibility today and which have, in fact, already been agreed upon and are to be carried out.

The permanent secretary acknowledges that he did not fully grasp the scale of the problem. Did you?

The permanent secretary correctly said that, at the ministry level, competence and responsibility for financial management fall to the permanent secretary. That was something he was supposed to handle on a day-to-day basis. As I have said, the minister does not count socks and cartridges. The minister has to make the political choices. I suppose we will have to get a sense of the full picture tomorrow (today — ed.) when we present this overview to the government.

What proposal will you make to the prime minister?

Naturally, everyone — former leaders, the permanent secretary and everyone down to the financial officers and accountants — has to understand their responsibilities. If your responsibility is to negotiate contracts and carry out due diligence to a reasonable standard, then that is what you do. It cannot be the minister's job to conduct background checks or enter accounting figures into Excel spreadsheets.

These systemic shortcomings have been repeated in National Audit Office audits for several years running. Was the National Audit Office's criticism not taken seriously in these circles? Did people just hope it would blow over — that the National Audit Office always finds things to criticize and perhaps it wouldn't turn into the kind of mess that would force Hanno Pevkur to resign?

I don't know of any other minister who has had to deal with financial accounting as much as I have over the past couple of years. When the new internal auditor arrived, I told him on his very first day that his biggest task was to communicate with the National Audit Office and make sure we got our financial accounting in order. We got to work. We haven't managed to complete everything yet — it is a large system — but we are continuing that work.

I will certainly hand over the entire action plan to the new minister, along with recommendations on what needs to be done so that, at this time next year, the minister then in office does not have to answer the same questions from you that I am answering here today.

As I understand it, prosecutors actually opened this criminal investigation back in October 2025. When did you learn about it?

A few weeks ago, when the secretary general told me.

Why wasn't the public informed about it then?

As far as I know, most criminal cases are not public during the investigative stage. When prosecutors open proceedings, there is naturally a closed phase and an open phase in a criminal investigation. During the closed phase, they gather as much evidence as they can. Perhaps journalists got a tip from somewhere and went to check it out. The Prosecutor's Office obviously does not lie. But it is also possible that the Prosecutor's Office will conclude that the investigation should not proceed and will close it. If it does proceed, then naturally the Ministry of Defense must cooperate fully.

Returning to the €70 million artillery shell deal, the Ministry of Defense assured the Riigikogu that Estonia's role in procuring weapons as aid for Ukraine posed no risk to the Estonian state budget, but the National Audit Office interprets the contract quite differently. Does that mean the Riigikogu was actually given false information?

That was the information I also relied on, based on what I received from the Estonian Center for Defense Investments.

How can the two interpretations be so diametrically opposed in black and white?

I certainly can't provide answers to every question today. When the issue was discussed at the Riigikogu and in the Finance Committee at the time, the information I received was that there was no risk to the Estonian taxpayer because the vast majority of the funding involved frozen Russian assets. But if that interpretation has changed ... Let me give you another example of an interpretation changing. When we began establishing the explosives plant, the understanding from the European Commission was that it would not count toward the budget balance. We have now received an assessment that it may count toward the budget balance. So even when it comes to tens of millions of euros affecting the state budget balance, we see situations where Europe gives us one interpretation at one point and then another later. We learn more as time goes on.

Today, you cannot guarantee that Estonian taxpayers will not have to foot the bill for this boldly taken risk: ordering €70 million worth of ammunition from a company that had never manufactured ammunition before and that has so far been unable to deliver it to Estonia in working order?

First, to get the facts straight: As far as I know, the advance payments relating specifically to this company amount to around €60 million. Second, the company did make deliveries, but we had an agreement with the Ukrainians that none of the ammunition would reach them until we had inspected it and made sure that it worked.

And it was useless?

We can't say it was useless — it was incomplete. There is an important distinction. Tens of millions of euros' worth of this ammunition has been delivered and is sitting in a warehouse in a European country. Just a few months ago, our ministry's auditors and internal control staff went there once again to verify that the items that had been declared were actually there. The product delivered by the manufacturer is not of sufficient quality and there is now an ordinary contractual dispute over one party having failed to fulfill the obligations it undertook. We believe the Estonian state has a sufficiently strong case to win that legal dispute.

Who do you see as your successor and what would you recommend to them?

Fortunately or unfortunately, the defense minister's powers and authority do not include choosing his own successor.

It would be nice if they did, but you'll have to ask the prime minister about that. I expect to continue doing my job until parliament reconvenes on September 14, at which point I will hand over my responsibilities.

But if you could give one recommendation for restoring trust, so that Estonian taxpayers can continue to believe that the money going into defense really does make Estonia better protected, what would it be?

There are actually several recommendations. First, we have to be open with the Estonian people and talk to them the way we are talking now. Second, all the measures we began last year and this year have to be completed so that the National Audit Office can also give its stamp of approval and confirm that things really are as we say they are. Third, all procurements must be based on the agreements reached with the commander of the Defense Forces — in other words, on the commander of the Defense Forces' military advice.

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