Commission chiefs face new quiz over Fléchard

Date: 22/02/01

By John Shelley

MEPS will summon two senior European Commission officials to explain their actions in a subsidies fraud investigation amid increasing signs the Parliament will delay signing off on the EU's budget this year until it gets answers.

External relations department head Guy Legras and director-general of legal services Jean-Louis Dewost are to be called for a second time to give evidence relating to a fraud case against the French company Fléchard.

The pair were quizzed on the issue in 1999, but MEPs are set to demand that they answer further questions in the wake of a scathing Court of Auditors report on the case and new concerns about the operations of the company since the original fraud was uncovered.

MEPs on the influential budgetary control committee say they have still received no satisfactory explanation for the Commission's decision to reduce a fine imposed on the firm from € 17.6 to € 3 million after it was caught fiddling export subsidies for butter.

Legras, head of the agriculture department at the time of the decision, and Dewost are the highest-ranking of around ten officials MEPs plan to call next month.

Although it is now eight years since Fléchard was fined, the case has attracted renewed attention because the firm has been named in connection with a more recent scandal.

Commission inspectors discovered last summer that organised criminals had been producing adulterated 'butter' containing chemical additives and beef by-products normally only used in cosmetics, and marketing it with the help of Italian, French and Belgium firms. Fléchard is being investigated over claims that it handled the butter - although it has not been proved that the company knew it was contaminated.

MEPs are concerned that the French company may still be receiving subsidies, despite the outcry over the reduced fine they received in the original case.

The Parliament believes that the fine was cut after the French government put pressure on the Commission. "We have been hearing for years that if a government pulls enough strings they can get what they want in this kind of case," said Jan Mulder, one of a team of four prominent MEPs scrutinising the Commission's actions. "This should not be allowed."

Some Commission officials admit they were uncomfortable with the decision to reduce the fine. "I felt that what the French suggested was going to be too generous to Fléchard," a senior aide involved in the decision told European Voice this week.

MEPs say the results of the latest interviews with Commission officials could have a significant bearing on the 1999 budget sign-off, due to take place this spring. The Parliament could postpone the 'discharge' or insist that the Commission introduces safeguards to protect decision makers from undue political influence.

Parliament's refusal to sign off the EU budget in 1999 triggered the chain of events that led to the downfall of the Santer Commission.

Both Legras and Dewost insist they already told MEPs everything they know at a similar hearing held in 1999.

"If the Parliament wants me to come I would have no problem with that, although in my view everything has already been said," said Legras.

The Fléchard issue is not the only one that could de-rail the Commission's hopes of a smooth discharge of the 1999 budget.

MEPs say the investigation into subsidies fraud in the flax sector that took place in Spain while current Commission Vice-President Loyola de Palacio was agriculture minister of that country is also a potential trouble issue.

Commission President Romano Prodi has insisted that De Palacio should not be held accountable for any wrongdoings that may have been committed by others.

MEPs will summon two senior European Commission officials to explain their actions in a subsidies fraud investigation amid increasing signs the Parliament will delay signing off on the EU's budget for 2001 until it gets answers.