Procurement: The Missing Mountain of Munitions

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December 19, 2005: Ukraine has discovered that $32 billion worth of weapons and military equipment is missing. Throughout the 1990s, Eastern Europe was a prime source of cheap, Cold War surplus weapons. When the Soviet Union was dissolved in 1991, it was agreed that each of the 14 new countries would keep whatever weapons and equipment were on their territory. In the early 1990s, the new Ukrainian government was taken over (via elections) by former Soviet bureaucrats. These guys were finally deposed last year (by by massive demonstrations, and an election), and the new, rather less corrupt government, has been checking the books. They have found that between 1992 and 1996, $32 billion worth of weapons and military equipment disappeared. Apparently this gear was transferred to companies which then either sold the stuff for scrap, or to arms dealers who shipped the stuff all over the world. Government officials, at the time, apparently received substantial bribes to facilitate all this. It appears that the Ukrainians are valuing the lost equipment using the purchase price. The actual value is much less, but still worth a few billion bucks. The bribes paid probably exceeded $100 million. Most of the guilty dealers and officials have apparently left the country.

 


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