OLAF puts ex-auditor in dock over alleged corruption

Date: 17/10/02

By David Cronin

GREECE'S former member of the European Court of Auditors faces legal action for alleged fraud and nepotism, European Voice can reveal.

OLAF, the EU's anti-fraud office, is finalising a probe into Kalliopi Nikolaou, who was Athens' representative at the Luxembourg-based watchdog in 1996-2001. The investigation centres on claims that Nikolaou helped falsify documents, enabling a senior advisor to receive €28,000 in holiday pay, for which he was not entitled.

She is also said to have hired a relative and family friend on the basis of their relationship rather than qualifications. Nikolaou, a former MEP and ambassador to the Organisation for Economic Cooperation and Development, insists she is innocent.

Speaking from Athens last night (16 October), Nikolaou said she was cooperating fully with the inquiry. She admitted that a nephew worked for her as a cabinet advisor, but that she had merely 'suggested' him for the post and that his appointment was approved by the institution. Nikolaou said she needed an environment specialist and he had a relevant degree.

'He was a member of my cabinet for two-and-a-half years, then took the concours and now works for the Commission,' she said. Two other people she had known for 30 years also worked for her as highly qualified economists, she added. As to the expenses falsification claims, Nikolaou said: 'I am hearing this for the first time.

'All the expenses were accepted and approved by the relevant services in the Court. I deny all the allegations. I always followed the rules of the Court and never did anything that was against the Court.'

Nevertheless, EU insiders confirmed OLAF plans to recommend proceedings against Nikolaou at the Court of Justice. Her case is cited in OLAF's annual report, due to be published next week, although it does not name her. Some of the allegations were in a dossier sent to MEPs in May by Dougal Watt, an official at the Court of Auditors.

The OLAF report states there has been a 'large increase' in the cases brought to its attention. Some 63 new inquiries into alleged corruption in EU bodies were opened in July 2001-July 2002, compared to 57 in the period since the anti-fraud office began its work in June 1999 - and 34 cases from precursor UCLAF.

Some 75 of cases relate to the European Commission; 9 to the Parliament; 3 to the Court of Auditors; 2 to the Council of Ministers and 11 to other EU bodies. OLAF has paid particular attention to contracts awarded to firms working on the construction or refurbishment of buildings used by the institutions. For example, the renovation of the Commission's Berlaymont HQ is being investigated.

The report states that OLAF has adopted an attitude of 'zero tolerance' towards corruption or fraud within the European institutions. 'This meant that all allegations were investigated, even where the source was questionable or the amount of money at issue was minimal. This policy is resource-intensive but was necessary in the interests of the European institutions.'

OLAF was formed following the mismanagement scandals which led to the fall of the Santer Commission in 1999. Other current investigations include:

• A case involving Eleni Kopanezou, head of unit in the Commission's trans-European transport network department. Her office oversaw a road scheme contract awarded to the Greek Ministry of Economy, which used a company headed by Kopanezou's husband to manage the project. The Commission has said Kopanezou is not involved in any aspect of the project.
• A dossier prepared by Paul van Buitenen, the former official whose previous revelations triggered the collapse of the Santer team, and;

OLAF also has a mandate to assist national authorities. In the period covered by the annual report, it studied a €30 million VAT evasion scam involving computer components in the Netherlands; an EU car sales scheme which resulted in at least 1,800 fraudulent deals in 1999-2002; possible fraud in Spain with the Union's milk quota system; and claims that the EU's Phare funding programme has been misused in Poland.

Meanwhile, the Court of Auditors has renewed criticism of the Commission over its failure to improve management of EU funds. Their concerns, in a new report, echo allegations by the executive's former accounting officer Marta Andreasen.

A former member of the European Court of Auditors faces legal action for alleged fraud and nepotism. OLAF, the EU's anti-fraud office, is finalising a probe into Kalliopi Nikolaou, who was Greece's representative from 1996 to 2001.