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Dispute over fighter jet: armaments office makes accusations of financial control

In a new report, the federal financial control agency expresses doubts about the agreed fixed price for the new combat aircraft. The Federal Office for Armaments reacted harshly: The inspectors acted against the country’s interests.

The F-35 is a latest generation fighter aircraft. The US platform is to replace the aging F/A-18 of the Swiss Air Force by 2030.

Christoph Ruckstuhl / NZZ

On the last day before the summer break, the political operating temperature in Bern rose again into the red: the Swiss Federal Audit Office (SFAO) published its report on risk management in the renewal of the Swiss Air Force on Friday afternoon. Especially in their sights: the price tag on the F-35 fighter jet, which is to replace the F/A-18 by 2030.

The SFAO expresses doubts about one of the most important arguments that Defense Minister Viola Amherd uses to advertise the selected aircraft: the fixed price that the US manufacturer guarantees Switzerland. The report says: According to the SFAO, there is “no legal security for a fixed price in the sense of a flat rate according to Swiss case law” when purchasing the F-35.

Neither absolute security nor arbitration

Financial Control points out that the price in question is not defined in the actual procurement contract. It is therefore not clear what type of fixed price was actually concluded. The SFAO comes to the unfortunate conclusion that there is “no absolute legal certainty”.

One could interpret the individual elements as an assurance from the American government that it has no intention of making a profit from the deal. However, the manufacturer’s costs would be passed on to the buyer. The SFAO also points out that the contracts do not provide for an arbitral tribunal.

“Endangers the interests of the Confederation”

Armasuisse, the Federal Office responsible for armaments, reacted unusually sharply. In the original language: The statements and the recommendation of the SFAO for a fixed price are “resolutely” rejected. “Ultimately, the SFAO is seriously endangering the interests of the Confederation if it calls into question the clear and expressly confirmed contractual agreements with the USA.”

Armasuisse explains in detail why, from their point of view, the fixed price is guaranteed. Otherwise, their reaction is harsh. For example, the SFAO’s statement that the F-35 does not include any financial risks in the project risks is “demonstrably wrong”.

The SFAO and Armasuisse are having a similar exchange of blows on a second issue: the operating costs of the new aircraft. The financial controllers question the estimates, and Armasuisse vehemently adheres to them.

In the subtext of their statement, the accusation resonates that the SFAO wanted to discredit the project – for whatever reason. From Armasuisse’s point of view, the financial control should have gone into much more detail on the positive findings, which certainly exist, especially in the summary.

Unfortunately, these aspects are neglected, which, according to Armasuisse, gives the broad readership a one-sided picture. Her conclusion: “Especially in the context of the current global political situation and in connection with the largest arms procurement in Switzerland to date – with the corresponding political extent – an absolutely clear and uncolored presentation of the situation is imperative.”

Statements by Washington ignored

When it comes to the main point of contention between the financial control and the defense department – the price – one question arises above all: Is the offer really binding? The SFAO focused on the paragraphs and practically ignored Washington’s statements. However, Switzerland’s contractual partner is the American government. At the beginning of June, they sent a clear statement via their embassy in Bern: The price is fixed.

Although Switzerland is only procuring a relatively small number of 36 jets, the deal in Washington seems to have a high priority: “While Switzerland continues its F-35 procurement, which also includes fixed-price contracts, the USA remains committed to the transparency that we demonstrated during this process,” the American embassy wrote, referring to the war in Ukraine: “In light of today’s security challenges, the capabilities of the platform are more relevant – and important – than ever.”

The US government is unusually accommodating to the Federal Council. Unlike usual, binding statements are made. Washington seems to want to prevent a security policy vacuum from developing in the Alpine region. The Swiss Air Force should be equipped with the best possible technology. The F-35 is not simply a combat aircraft, but a flying early warning system for dangers from the air.

Quarrels in the Federal Council

Almost at the same time as the financial control report, the SP published a media release in which it conjured up a “procurement scandal” involving the F-35. The intention seems clear: the ongoing collection of signatures for a constitutional initiative against the F-35 should once again be strongly supported. However, the Federal Council wants to conclude the contract in accordance with the regular procedure and does not want to wait for a second fighter jet vote.

Coincidence or not: Also on Friday, a SRF report caused additional excitement in the fighter jet dossier about quarrels in the Federal Council. It is about the events leading up to the decision in favor of the F-35, which the Federal Council made at the end of June 2021. In a nutshell: the finance, foreign affairs and economics departments negotiated counter deals with France on the taxation of cross-border commuters and on European policy. The talks are said to have continued even after it was already clear that the French plane Rafale was clearly inferior in the evaluation. The French reacted with a cold.

In this matter, the defense minister has alienated three colleagues: Ueli Maurer, Ignazio Cassis and Guy Parmelin. They were in charge of the negotiations. At the beginning of the year, Amherd went to the CH media newspapers on the offensive: She made public who had been informed and when. If negotiations continued after that, Amherd claims he didn’t know anything about it.

What did Amherd know?

The SRF report is now questioning this statement, citing anonymous sources. A week before the decision, the entire Federal Council asked the finance department to demand a guarantee from the French for the counter-transactions. It should have arrived five days later. Consequently, Amherd should have known.

Ultimately, statement stands against statement. At best, a report by the Audit Committee will provide clarification in the near future. What is certain is that something went wrong – and that despite the war in Ukraine, Switzerland is making political fuss about the procurement of a new combat aircraft.

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