Commission cold shoulder for firms linked to Eurostat

Date:24/07/03

By David Cronin

THE European Commission has decided to stop doing business with four firms which have been linked to the suspected fraud scandal in its data collation arm Eurostat.

Two of the firms have been under investigation by OLAF, the EU's anti-fraud office. These are Planistat, the French firm which OLAF has implicated in the "vast looting" of EU funds, and Centre Européen pour la Statistique et le Développement. The latter formerly boasted Yves Franchet, the recently removed head of Eurostat, as its president.

The other two are Luxembourg-based 2SDA, which worked in tandem with Planistat on many statistical projects, and the Training of European Statisticians (TES) Institute. Also located in the Grand Duchy, TES's board has previously included Franchet.

Earlier this month Neil Kinnock, the internal reform commissioner, announced he had received "compelling prima facie evidence" that illegal "double accounts" were being run by Eurostat.

It is believed that EU funds, running to tens of millions of euro, were diverted to these reserves.

Despite Franchet's past links with the firms under suspicion, Commission spokesman Reijo Kemppinen said yesterday (23 July) no evidence has been gathered to suggest the Frenchman had made any personal profit from his extra-curricular work. The contracts are being cancelled as a "precautionary measure", Kemppinen added. The Commission declined to give an estimate of their value.

Meanwhile, the 20 commissioners have decided to quiz the top civil servants in the departments under their political responsibility on whether they run any illegal accounts similar to those allegedly detected in Eurostat.

Kinnock and Michaele Schreyer, the budget commissioner, have drafted a questionnaire, which is due to be circulated among the 35 directorates-general and services in the Commission.

It asks their top officials if they know of any payments made by their departments for services that were not actually rendered or expenses that were not actually claimed since 2000.

Union Syndicale, the main body representing officials in the EU institutions, first raised concerns in the mid-1990s that Eurostat's reliance on outside firms could be open to abuse.

The Commission has now decided to carry out an in-depth study on all of the agency's external contracts. This is due to be completed by the end of October.

According to Kemppinen, the Commission agrees that one lesson of the Eurostat affair is that its activities should be undertaken internally by its officials as much as possible.

In future, he said, outsourcing of work will only be possible after a feasibility study, examining all other options, is undertaken.

The European Commission will no longer do business with four firms - Planistat; Training of European Statisticians Institute; 2SDA and the Centre Européen pour la Statistique and le D´veloppement - which have been linked to the Eurostat fraud scandal.