Overseas EU aid blighted by corruption, claims TV probe

Date: 12/04/01

By John Shelley

EU aid intended to help native Indians in Paraguay was tainted by corrupt practices and squandered on ill thought-out projects, a TV investigation claimed this week.

The UK documentary suggested that a key appointment on a €10-million Union aid programme was made under political pressure from the Paraguayan government and that projects on which the money was spent were poorly followed through.

Andrew Nickson, a lecturer in Latin American development at Birmingham University, was put in charge of the aid programme. But he was sacked after complaining about the appointment of a finance director with no accounting experience, the BBC Correspondent programme alleged.

Altair, a Spanish consultancy managing the project on behalf of the EU, admitted they had urged him not to blow the whistle to the European Commission. But its spokesman insisted that a political appointment would not have been ultimately sanctioned.

The programme investigated two instances of poorly-executed aid ventures. In one village, film-makers found a windmill built to pump water out of a marsh had been turning aimlessly since last June because it was never connected to a pipe network.

In another Indian community, EU funds were spent on training for villagers to keep bees and provided them with hives. But the nearest town was four hours drive away and none of the participants owned a car, making it virtually impossible to sell their honey.

External Relations Commissioner Chris Patten admitted that his team faced a struggle to reform overseas aid procedures to "turn the tanker round". "Every time they open a cupboard a skeleton falls out," he said.

Patten's spokesman Gunnar Wiegand said the claims made about Altair would be investigated. "This is one aspect which caused concern," he conceded.

The Commission recognised the need to have "optimal monitoring in place on the ground" and this was being achieved through a team led by Stella Zervoudaki, head of the EU delegation to Paraguay. "You can rightfully ask questions about the sustainability of projects, but there is not any real scandal in this case," Wiegand added.

The situation highlighted in Paraguay is an example of the mismanagement of external funds which has prompted anger from the European Parliament.

Last week they refused to sign off the budget for the European Development Fund for the financial year for 1999, postponing it until they have received a report from the Commission's internal audit service.

Feature on a BBC documentary which highlighted examples of the mismanagement of the EU's external aid funds.