Member States must share blame for Eurostat fiasco, says Santer

Date:25/09/03

By Martin Banks

JACQUES Santer, the former European Commission president, says the Eurostat fiasco demonstrates that lessons have not been learned from his own tainted term in office.

Santer, who was forced to resign with his colleagues in 1999 in the wake of a damning report into fraud and mismanagement, told European Voice that the furore surrounding the EU statistical agency had once again put the Union in a "disastrous" light.

But the Luxembourger, now an MEP, said the Commission should not alone shoulder the blame for the current situation - member states were also at fault, he claimed, for providing the executive with insufficient means to do its job.

"The fundamental problem here is that member states and the Council [of Ministers] have invested far more duties and responsibilities in the Commission than was the case when I was president. They have done so, though, without at the same time increasing the Commission's resources.

"The result is that the Commission has increasingly had to "outsource" a lot of its work, as in the case of Eurostat. Clearly, some of the lessons which you thought would have been learned from my period in office have not been learned. Unless the Commission is given more staff and resources, then there is a very good chance of another Eurostat happening in the future," warned Luxembourg's former prime minister.

Santer was also highly critical of the length of time the EU's anti-fraud office OLAF is taking to investigate the allegations against the data-collecting agency.

"The matter was first raised in 2000, yet we are still waiting for their report."

Santer's comments were dismissed by Commission Vice-President Neil Kinnock, who said the executive had responded to the Eurostat affair "rigorously and thoroughly".

He told MEPs: "Let us remember that this affair resulted in the Commission setting up the biggest task force in its history. This is hardly evidence of a lax Commission - although, I accept, nor does it suggest that the sky is permanently blue.

"We have acknowledged where things went wrong and the Commission has installed real, strong safeguards to ensure there is no repetition of any sort of double-accounting."

Liberal Democrat group leader Graham Watson was not persuaded by Britain's former Labour party leader, declaring: "There is a question to answer and I think Kinnock's head is on the block."

And European Parliament President Pat Cox admitted he felt a "dreadful sense of déja vû" from the events of 1999.

A KEY member of the Parliament's budgetary control committee (Cocobu) said he would boycott today's (25 September) crunch meeting with Commission President Romano and political group leaders.

Austrian Socialist Herbert Bösch said it was wrong to hold the meeting behind closed doors. He was one of only three committee members due to be allowed to question Prodi. The others are Paulo Casaca and the Cocobu chairman, German Conservative Diemut Theato.

The committee will decide next week whether to ask Viviane Reding, the education and culture commissioner, to appear before it over allegations that irregularities took place in the publications office which she oversees.

The Commission this week released details of an internal questionnaire for senior staff, which it said proved that the irregularities seen at Eurostat, such as "phantom" bank accounts and fake contracts, had not occurred in other directorates or agencies.

Following the money - how scandal unfolded

• 12 December 1996: Staff union Solidarité Européenne expresses concern about the number of temporary staff employed by Eurostat.
• 22 January 1997: European Commission memo notes Eurostat's heavy dependence on outside firms. Among those mentioned are the TES Institute: its board includes Yves Franchet, also head of Eurostat.
• 30 January 1997: Union Syndicale, the largest EU staff union, alleges Eurostat has bypassed proper tendering procedures in awarding contracts. It warns that officials are conducting unauthorized business activities at work.
• 28 March 2000: Internal auditors discover that Eurocost, a "not-for-profit" firm established by Franchet in 1989, had overcharged Eurostat.
• May 2000: Commission orders Eurocost to repay €1 million to Eurostat.
• December 2000: Commission report backs allegations by Eurostat whistleblower Dorte Schmidt-Brown. She had claimed that a firm called Eurogramme had won a big Eurostat contract by providing falsified turnover figures.
• 31 August 2001: Paul van Buitenen, the official whose fraud revelations triggered the collapse of the Santer Commission in 1999, produces dossier highlighting further suspected irregularities. Eurostat features prominently.
• 8 July 2002: OLAF, the Commission's anti-fraud bureau, sends a file detailing suspect Eurostat contracts to Luxembourg's public prosecutor.
• 18 March 2003: OLAF sends file to Paris prosecutor on Planistat, a French firm which had contracts worth more than €40 million with Eurostat.
• 15 May 2003: European Voice reveals that Franchet and Daniel Byk, another senior Eurostat official, are implicated in the "vast looting" of taxpayers' money.
• 17 June 2003: Commissioners Pedro Solbes (economic and monetary affairs) and Michaele Schreyer (budget) tell MEPs they were not made aware of serious allegations involving Eurostat until 14 May this year.
• 9 July 2003: Commission learns it was common practice for Eurostat to funnel funds into irregular accounts until at least 1999. It announces disciplinary probe against Franchet, Byk and their colleague Photius Nanopoulos.
• 16 July 2003: Solbes, who has overall responsibility for Eurostat, faces calls to quit when he appears before the Parliament's budgetary control committee (Cocobu).
• 23 July 2003: Commission ends contractual links with four companies that had worked with Eurostat.
• 25 September 2003: Romano Prodi presents reportson Eurostat affair to Parliament's political group leaders and Cocobu.