Top official fails to satisfy MEPs over growing Eurostat scandal

Date: 03/07/03

By Martin Banks

THE European Commission's top official David O'Sullivan this week attempted to defend the role he has played in the burgeoning Eurostat scandal before members of the European Parliament's powerful budgetary control committee.

MEPs cross-examined the Commission's secretary-general, on 30 June in Strasbourg, about the Eurostat affair, which threatens to engulf the Union's executive.

The Commission, MEPs have claimed, did too little too late about the alleged "looting" of €900,000 from Eurostat, the EU's statistical agency, despite the fact that it promised radical reform after the fraud-induced demise of the last Commission led by Jacques Santer in 1999.

The Luxembourg-based agency is currently the subject of investigations by OLAF, the EU's anti-fraud office, and authorities in France and Luxembourg.

It is claimed that Eurostat's two most senior officials - Yves Franchet and Daniel Byk - illegally transferred Eurostat money into unofficial bank accounts.

Both deny wrongdoing and have been moved from their posts at their own request.

MEPs have claimed that the Commission had known about the problems at Eurostat in 1999 but had failed to act. However O'Sullivan, who as secretary-general is informed if OLAF starts an investigation, told the committee that he had known about the various investigations into Eurostat but did not inform the relevant commissioners.

He said it would not be useful to "systematically" inform commissioners of preliminary inquiries, partly for fear this might look as though the Commission was trying to interfere in the EU's anti-fraud office work.

O'Sullivan said OLAF did not necessarily inform him of the nature of investigations nor who was under investigation. In the case of Eurostat, he was "not aware of the possible involvement of senior officials" until 3 April this year.

He told members he was informed by OLAF about the details of its investigation in early April but had been asked not to divulge this information for two weeks.

"Ever since I took up my post as secretary-general I have always been a little uneasy when I have been asked to agree that people should not be informed about something," he said.

When asked why the Commission had not been seriously alarmed by the fact that, since 2000, OLAF had started a number of different inquiries at Eurostat, he admitted that, in retrospect, alarm bells should have sounded. At the time, however, it was thought things were under control, he said, and he was not aware of the "nuclear" fact that OLAF had raised questions about Eurostat's top officials.

But O'Sullivan's hour-long appearance did little to convince committee members. "This is a very serious matter and, although it was a competent performance by Mr O'Sullivan, he did not provide too many answers to our questions and left many members dissatisfied," UK Conservative MEP Chris Heaton-Harris said.

Some committee members threatened not to approve the Commission's annual accounts next year because of the way it is handling the Eurostat affair and other cases of suspected fraud within its departments.

German Christian Democrat MEP Diemut Theato, the committee's chairwoman, drew a comparison with the Commission's performance in 1999, when Jacques Santer was forced out of office over allegations of fraud and mismanagement.

"We see that there has been no progress," Theato said.

David O'Sullivan, a top European Commission official, was called before the European Parliament's budgetary control committee on 30 June 2003 to discuss his role in the Eurostat scandal.