Turkey’s intel agency escaped auditing, hides its spending in a new veil of secrecy

Abdullah Bozkurt/Stockholm

In a further blow to transparency in the governance of Turkey, the government of President Recep Tayyip Erdoğan has prevented the intelligence agency, a key institution that it has increasingly relied on to rule, from submitting an expense report, thereby hindering the auditing of the agency.

For the first time Turkey’s National Intelligence Organization (Milli İstihbarat Teşkilatı, MIT) did not submit its spending and asset report to the Court of Accounts this year in defiance of Turkish law, hampering parliament’s oversight of the intelligence agency.

Until last year the Court of Accounts (Sayıştay) had been reviewing the agency’s accounting data, confirming whether the spending was done according to regulations and later submitting its report to parliament before deliberations for the next year’s budget.

Law No. 6085 on the functioning and structure of the Court of Accounts, as amended in 2010, authorizes the court to audit the spending and budget of the intelligence agency according to internationally set accounting standards. The court has the right to audit a public institution not only in terms of its spending but also in terms of performance. The secondary legislation and regulations govern how the data are publicized.

In the past Turkey’s one-time powerful army used to have broader exclusions from auditing, especially for business ventures, and the audit report was kept secret from the public. But that practice was abolished in 2012 with amendments introduced as part of Turkey’s process of EU harmonization

Now MIT appears to have replaced the army in enjoying that heavy veil of secrecy and is not being held accountable for spending taxpayers’ money. The Erdoğan government has amended intelligence bills in recent years, effectively providing blanket immunity from any criminal prosecution for the agency and its employees.

MIT’s failure to send data to the Court of Accounts is seen as yet another step toward transforming Turkey into a state increasingly run by the intelligence service through fear and intimidation. The agency has been led by Hakan Fidan,a pro-Iran Islamist and Erdoğan confidant, since May 2010 and has been involved in extrajudicial murders, kidnappings, orchestrating false flags and plotting politically motivated operations to shore up the Erdoğan regime.

The available accounting data from last year, although not very detailed, nevertheless revealed how the government poured a huge amount of cash into the agency to finance the expansion of clandestine operations, which are mainly designed to undermine the opposition and sustain the Erdoğan regime.

The Court of Accounts’ report from last year indicated that the agency spent nearly half a billion Turkish lira in secret operations in 2020 while enjoying a huge spike in the assets it holds, valued at more than 32 billion lira.

MIT spent 495.4 million lira in what was described as “secret service expenditures.” What is more, its assets jumped to 32.7 billion lira, a whopping increase of 92 percent over the previous year.

In 2018 MIT had only 3.8 billion lira in assets, but the agency has become a wealthy institution over the course of two years, growing its wealth to 32.7 billion lira, an increase of 761 percent in a short period of time.

The report also showed that the agency spent 1.3 billion lira on operatives in 2020 and burned through 756.1 million lira of a budget item that was described as “unidentified.” The same figure was attributed to the amortization of properties owned by the agency in another section of the report.

Government document shows MIT spent nearly half a billion lira in secret operations in 2020:

The agency also spent far more than its 2.2 billion lira budget allocated by parliament for the year 2020, exceeding its spending cap by 274 million lira, which was later provided to the agency from the supplemental budget.

Yet, that was not the entire picture, either. The agency managed to draw on the coffers of the Defense Industry Support Fund (SSDF), an extra-budgetary resource for defense managed by the Presidency of the Defense Industry, formerly known as the Undersecretariat for the Defense Industry (SSM).

With a modification in the relevant law in 2014, Erdoğan simply allowed MIT to tap into the SSDF for its expenditures. MIT’s obligation to be bound by SSDF regulations governing tenders was lifted. As a result, the agency was not required to disclose any information concerning what it needed the money for and could hold tenders to procure arms in line with its own regulations, and the SSDF would merely provide the funds, no matter how much.

According to the report MIT used 76.3 million lira from this defense fund, which was originally set up in 1985 to procure arms and related items for the military. The Turkish army was not comfortable with the new practice, but criticism was muzzled after a failed coup on July 15, 2016, when hundreds of generals and thousands of senior officers were discharged from the army.

MIT balance sheet for 2020 shows the agency accumulated enormous wealth in two years’ time, reaching over 32 billion Turkish lira:

In line with Erdoğan’s goals and strategy, MIT also enjoys a considerable share of the discretionary fund given to the president to spend on anything he wants without having to disclose any details. The money spent from the discretionary fund last year was TL 2.7 billion, an increase of 35 percent from 2020.

According to data from the Public Financial Administration and Transformation General Directorate, the money spent from the discretionary fund for the first eight months of this year was TL 2.5 billion.

Although crippled and rendered almost ineffective by the Erdoğan regime, the Court of Accounts is still the major auditing body of the Turkish state, reviewing the spending by government agencies on behalf of the taxpayers. Although limited in scope and unsatisfactory in content, the Court of Accounts report was still one of the few clues available as to the operations of MIT. That limited oversight of the agency’s budget and spending appears to have been destroyed this year.

MIT had always enjoyed some immunity from state auditing due to the sensitive nature of its operations, but it has become practically untouchable, particularly as Erdoğan has grown more autocratic. The Turkish leader purposely weakened the already feeble oversight conducted by parliament, hobbled the judiciary’s auditing authority and gagged the press, letting it speak only when beneficial to him.