Fraud office called in over CoR accounts allegations

Date: 10/04/03

By Martin Banks

OLAF, the anti-fraud office, has been asked to investigate alleged "shocking" financial irregularities at the institution which represents the EU's regional authorities.

The move came after the European Parliament's budgetary control committee (Cocobu) approved the European Commission's management of the EU budget in 2001.

However, MEPs refused to grant a similar discharge for the Committee of the Regions (CoR) after evidence emerged of fraudulent travel claims and misuse of official cars by members.

Two weeks ago, the CoR's own financial controller, Robert McCoy, presented a dossier of irregularities to the budgetary control committee.

The report highlighted:

• Over-charging for the cost of journeys and over-estimates of distances travelled;
• expense claims without proof eg airline boarding cards;
• a train ticket presented for reimbursement that had been altered with correction fluid, and;
• one CoR member under investigation for making €3,600 worth of private travel in official cars.

On Tuesday, at the European Parliament plenary in Strasbourg, Dutch Socialist MEP Michiel van Hulten exposed "fresh evidence" of wrongdoing.

He referred to claims that a high-ranking CoR member arranged fake meetings on the eve of official gatherings to claim additional daily allowances worth ll0,000.

"Another member is alleged to have been engaged in airline ticket fraud amounting to some €11,000."

Perhaps the cause for greatest concern, said the MEP, was that the Internal Audit Service had been subjected "to huge pressure and even intimidation designed to discourage them from pursuing their activities in a free and impartial manner".

Van Hulten told MEPs that the CoR auditor had described his appearance before Cocobu as a "cry for help".

"In those circumstances, Parliament has no choice but to postpone discharge of the CoR while an investigation takes place to determine the exact nature of the problem," said the deputy.

"The situation at the CoR can only be described as alarming and shocking and, in view of the seriousness of these allegations I have referred the case to OLAF."

Welsh Socialist Eluned Morgan, also a member of the budgetary control committee, said it would have been "irresponsible" to approve the CoR accounts "when there are loopholes and when some of the rules are open to interpretation which can lead to fraud".

The CoR is made up of 222 representatives of local or regional government and some elected politicians. It gives opinions on legislation but has only consultative powers.

The fraud claims will damage the body's already shaky reputation at a time when the role of EU institutions is being put under the microscope by the Convention on the future of Europe.

Parliament has approved the Commission's accounts for 2001 despite concerns raised by former accounting officer Marta Andreasen, who was suspended after going public with claims that the executive's auditing system was vulnerable to fraud.

Budget Commissioner Michaele Schreyer told MEPs that long-planned reforms of the accounting system were now "well under way".

OLAF, the anti-fraud office, has been asked to investigate alleged financial irregularities at the Committee of the Regions, the institution which represents the EU's regional authorities.