That's hardly news. Saudi Arabia, Egypt and other regional states have been implicated in scandals involving major Western defense companies such as Lockheed Martin of the United States or Britain's BAE Systems over the years.
But the anti-graft watchdog noted in a report that two years after the pro-democracy revolutions of the so-called Arab Spring that toppled longtime dictatorships in Tunisia, Egypt, Libya and Yemen, the defense sectors in all 19 countries of the region remain riddled with corruption.
Endemic across-the-board official graft was one of the key issues that triggered the uprisings that began in Tunisia in January 2011.
Egypt, Algeria, Libya, Syria and Yemen are listed with "critical" levels of defense corruption in the report, released in Beirut this week. It took two years to compile. That means "there is hardly any accountability of defense and security establishments in all of these states," the report observed.
The best-scoring countries were listed as Israel, Kuwait, Lebanon and the United Arab Emirates.
But the report concluded that the risk of military corruption in all 19 states, including Israel, is "high."
The region, overwhelmingly made up of absolute monarchies or totalitarian republics, "has several key problems: excessive secrecy, lack of oversight and lack of citizen engagement," the report noted.
With defense procurement usually in the hands of extended royal families or ruling clans, with no accountability or public scrutiny -- with the exception of Kuwait where a feisty Parliament with limited powers has blocked deals that enrich members of the ruling dynasty in recent years -- this makes for widespread graft in official circles.
"Networks based on close family and business ties as well as restrictions on public debate and civil society freedom were found in most countries assessed in the region," the report noted.
"Not one of the countries has a credible or safe 'whistle-blowing' system through which concerned officers and defense officials can report suspected corruption ... Yet the potential for changes exists."
For instance, in Syria, gripped in a two-year-old civil war, TI reported that attempts to initiate debate on defense issues were crushed and those involved thrown into prison by the minority regime in Damascus that's battling for survival.
Defense procurement was firmly in the hands of the Assad dynasty, which has ruled since 1970, and its associated clans in the minority Alawite sect. But even if the current president, Bashar Assad, is toppled, TI postulated that doesn't mean the defense sector corruption will automatically go away.
The evidence so far, with four dictators brought down and Assad's demise widely predicted, indicates "that replacing authoritarian leaders with elected one sis not enough to eradicate corruption," said Mark Pyman, director of TI's defense and security program.
"Corruptive structures have been allowed to develop and mature within defense institutions and armed forces over 20 or 30 years and a regime change will not make them go away."
Egypt's military establishment controls a large segment of the economy and run commercial enterprises that aren't subjected to public scrutiny, as is also the case in Algeria, Syria and Yemen.
Incoming regimes seek to keep the generals on their side, if indeed the generals aren't directly involved in the regime change as has been the case in Yemen.
Two years after Egypt's President Hosni Mubarak, a former air force commander who gave the generals free rein in business, was toppled, "there are no signs that elected leaders are working to open defense institutions to public oversight," Pyman observed.
In Israel, which boasts it's the only democracy in the Middle East, the military establishment wields immense political power and holds sway over the country's high-tech defense industry, the most advanced in the region.
Over the years, many shady defense sales have been conducted by former military officers turned arms dealers accredited to the defense ministry. Few have been brought to book, largely because of their military connections.
In March 2012, India, a major buyer of Israeli weapons systems, banned Israel Military Industries, a major arms manufacturer, from bidding on contracts because of alleged massive kickbacks in a 2009 bribery scandal.