Aid programme on hold as Slovakia faces fraud probe

Date: 26/04/01

By John Shelley

THE European Commission has suspended its pre-accession aid programme to Slovakia amid accusations of massive fraud.

Staff in the Commission's office in Bratislava have been told to put on hold approval of any new infrastructure projects aimed at preparing the country for enlargement.

The move comes after a senior Slovakian government official resigned from his post at the head of the department responsible for choosing which companies are awarded tenders for EU-funded projects because of corruption allegations.

The Union's anti-fraud office OLAF has also been alerted and started an investigation.

A spokesman for Enlargement Commissioner Günter Verheugen said: "At this stage we don't know what amounts might be affected."

The EU gives around €140 million in aid each year to Slovakia. According to a report in a Slovakian newspaper, some €40 million of that could have been "stolen".

Enlargement director general Eneko Landaburo has written to the Slovakian government demanding a full account of the claimed illegal tendering. Until he gets answers, the whole tendering process has been put on hold - although schemes which are already under way will not be halted.

The move comes following the resignation of the director of the Slovakian foreign aid department, Roland Toth. According to Slovakian reports, he was forced to stand down after his wife handed over documents to police and journalists which indicated widespread abuse of his position.

A spokesman for the Slovakian government confirmed that a police investigation was now under way against Toth, who has been responsible for the distribution of EU aid since 1996.

He is alleged to have taken kick-backs for giving lucrative contracts and channelling work to firms which he part owned as a "silent partner".

Toth is also suspected of wrongly claiming a 25% bonus on his civil servant's pay, given on condition he abstains from private business activity.

Non-governmental organisations in the Slovak Republic have reacted with anger to the developments, saying they have been warning for months that the distribution of EU aid was at best opaque and at worst corrupt.

Juraj Zamkovsky, coordinator of the economic programme at Friends of the Earth Slovakia, said: "The basic strategic documents for Slovakia's use of pre-accesssion aid are of a poor quality, frequently reflecting the priorities of influential interest groups."

In a joint statement, an alliance of Slovakian NGOs and CEE Bankwatch - a group campaigning for greater accountability in EU spending - said any fraud could not have been possible without a "blind eye" from the Slovakian government and "without an environment in Brussels which lacks the sufficient oversight that assures transparency and protects against various forms of corruption."

"The culture of decision-making over the EU pre-accession aid in our country creates a fertile soil for non-transparency and corruption," said the statement.

Verheugen's spokesman Jean-Christophe Filori said the Slovakian government was responsible for the spending of its EU aid money and that the Commission would recover any cash if it emerged it had been improperly spent.

The European Commission has suspended its pre-accession aid programme to Slovakia amid accusations of massive fraud.