Defence Procurement: What’s Going on in Denmark?

Given little attention in the international press, an interesting story in Denmark led to a consequential cabinet reshuffle in August, including the firing of the permanent secretary of state of the Ministry of Defence. This is a result of a controversial arms deal with Israeli defence contractor, Elbit Systems, to replace the Danish army’s artillery, the majority of which has been sent to Ukraine. Let’s take a look at what’s going on.

In March, the Israeli arms company, Elbit Systems, announced a deal with the Danish Ministry of Defence for a battalion of ATMOS artillery systems purchased to replace Denmark’s fleet of 18 Ukraine-bound CAESAR self-propelled howitzers. The deal, worth $252 million (DKK 1.7 billion), was announced after over a month of negotiations. According to a Danish government press release, the decision to turn to the Israeli system to arm a Danish Army artillery battalion was based on the Israeli manufacturer’s more competitive financial terms and delivery schedule, in the face of offers from its European competitors, France’s Nexter with the Caesar 8×8, and Sweden’s Bofors with the Archer. 

It would appear, however, that other factors were at play in this decision. Danish publication Altinget has been running an investigation into the deal, which has as of yet garnered little attention in the international press. It has been asking some serious questions about why the Danish government was so hasty in its decision to award the contract to such a problematic defence firm. It turns out that the decision was made based on erroneous information.

A chronological look at the affair 

The process was described as “completely grotesque” and “hopeless” by the Danish opposition.”This is the kind of rushed case processing that is completely unacceptable,” said the Conservative Party’s finance spokesman, Rasmus Jarlov. It all started back on Jan. 19, 2023, when the SVM government informed the Foreign Policy Committee that Denmark would donate the Danish Army’s fleet of new French-produced CAESAR artillery systems to Ukraine.

The Danish Army always maintained that it needed the artillery systems itself, and so the Danish Defence Materiel and Procurement Agency (Forsvarsministeriets Materiel- og Indkøbsstyrelse – FMI) was asked to conduct a market survey into what could be purchased as a replacement and how quickly it could be delivered.

Dec. 22, 2022

The Danish Defence Materiel and Procurement Agency receives a draft settlement agreement from the Israeli arms manufacturer Elbit Systems, which has filed a lawsuit against the Danish state. According to Elbit Systems, the settlement is the result of a negotiation between the Israeli CEO and FMI’s deputy director.

Jan. 23, 2023

FMI Director Lieutenant General Kim Jesper Jørgensen travels to Israel. Among other things, he visits Elbit Systems. It should be noted that the Elbit artillery system was being considered by the Danish Ministry of Defence back in 2015, but the move was blocked in the Folketing (the Danish Parliament) following massive opposition from the Radikale Venstre and SF parties.

Jan. 25, 2023

Minister of Defence Jakob Ellemann-Jensen convenes the parties behind the current defence agreement for a meeting at the Ministry of Defence in Copenhagen. All parties in the Danish Parliament with the exception of Enhedslisten and Alternativet participate. The meeting lasts a total of 35 minutes.

During this session, the government proposes the purchase of Elbit’s ATMOS artillery system and PULS rocket launcher system at a total price of DKK 1.7 billion. It was also stated that the first ATMOS systems can be delivered in a year, and PULS can be delivered as early as this year, meaning that the Danish Army would only be without artillery for a few months.

In spite of proposals from Nexter and Korean firm Hanwha, it was Elbit’s ATMOS system that receives the clear recommendation of Deputy Chief of Defence, Kenneth Pedersen. His recommendation and the prospect of a quick delivery mean that the politicians chose to follow the recommendation to procure the Israeli ATMOS artillery system. At the same time, they nod in favour of the government’s plan to procure the PULS rocket launcher system.

Jan. 26, 2023

The Danish Finance Committee receives a document, obtained by Altinget, that outlined the urgency of the deal. “The documents are urgent, as the contract with the supplier must be signed as soon as possible and before the end of January to ensure the validity of the offer, production possibilities and a rapid rebuilding of the operational capacity,” it read. 

That same day, the Finance Committee approves the purchase of artillery worth more than DKK 1.7 billion from Elbit Systems, to the dismay of some committee members, who were given very little warning. “Because I hadn’t been on my phone for three or four hours, I was accused of having voted in favour of something in the Finance Committee that I hadn’t read. It was completely hopeless and unacceptable,” said Rasmus Jarlov. “It was a completely grotesque process. We were given exactly two hours from the time we received the confidential documents until the meeting was to be held,” said Pelle Dragsted, finance spokesperson for the Red-Green Alliance (Enhedslisten), who did not vote in favour of the procurement. “This meant that there was no opportunity whatsoever to thoroughly familiarise ourselves with the case.” If members did not have time to respond, their silence was considered to be a vote in favour. This has caused some serious political outrage. “It reeks of the fact that they knew it was a bad deal. And that’s why it had to go through quickly,” added Dragsted.

Feb. 6, 2023

Jakob Ellemann-Jensen goes on sick leave due to stress. Troels Lund Poulsen (V) takes over as acting Minister of Defence.

May 26, 2023

Through access to documents, Altinget reveals that Jakob Ellemann-Jensen has provided false information in order to rush through the billion-dollar purchase of the Israeli artillery in January. Although the offer from Elbit Systems actually had a deadline at the end of June, the rapporteurs were told that the offer had to be approved by the end of January at the latest.

May 30, 2023

Troels Lund Poulsen, Deputy Minister of Defence, announces that he has asked for an account of the process.

Repercussions

This summer, the investigation by Altinget led to political change. Jakob Ellemann-Jensen is also leader of the Liberal Party which, although in governing coalition with Mette Frederiksen’s Social Democratic Party, was largely weakened during the elections in November 2022, when it lost almost half of its seats to the center-right Moderate Party created in June 2022 by former Prime Minister Lars Løkke Rasmussen, now Minister of Foreign Affairs. Ellemann-Jensen‘s position has come under fire after Altinget suggested on May 26 that he had knowingly provided false information on the Elbit deal.

In June, Altinget also reported that both Korean firm Hanwha and French firm Nexter had denied having received a request from Denmark to submit a tender for the rapid delivery of artillery. Several spokespersons say that they would not have approved the artillery purchase from Elbit if they had known that no offers had been obtained from other suppliers.

Returning in early August, Ellemann-Jensen ordered a new and independent investigation into the matter, following the publication of a report that appears to exonerate him from any knowledge that he had mislead the Folketing, instead placing the blame on a misunderstanding between the FMI and the Ministry of Defence. According to the Ministry of Defence’s Permanent Secretary Morten Bæk, FMI has apologised to the ministry that the agency “was not precise in the wording about the validity of the tenders”.

But Altinget then uncovered a memo disproving Bæk’s statement, and he was consequently fired by Ellemann-Jensen: “The report on erroneous information contained erroneous information,” the minister said. Two weeks later, Ellemann-Jensen would leave his post, being replaced by Poulsen, and take up the role of Minister of the Economy. “There are really many unanswered questions in this case. I know there’s a lot of confusion out there – it’s the same here…The defence needs a minister who is 100 percent focused on the task at hand. And it is big,” he said in a statement. 

A tarnished reputation?

Such political strife and moral clumsiness is not something we have come to expect from such a socially liberal country as Denmark. There must have been knowledge about the dubious dealings with Elbit before Altinget’s investigation that revealed all the facts, but its political volatility led, it would seem, to certain interested parties trying to keep it under wraps, to the dismay of those who later learnt the real facts of the deal.

Ellemann-Jensen‘s reassignment to Minister of the Economy highlights the political weight of the affair for the Danish government, but he has been somewhat protected from more serious consequences so far, even if his position within the ruling coalition has certainly been weakened. The real loser, though, is Denmark itself, whose virtuous image could be severely tarnished if the independent enquiry to be launched shortly confirms the suspicions of turpitude and lack of transparency between the country’s government and parliament.

[ATMOS 2000 (Autonomous Truck MOunted howitzer System). Photo by Rowielip, CC BY-SA 3.0, via Wikimedia Commons]

*Donald Carpenter has worked in major infrastructure programs, in private groups and as an advisor to international organisations. He has always been interested in geopolitics, and enjoys his retirement to share his views on current affairs. The views and opinions expressed in this article are those of the author.

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