Officials face trial over tourism fraud

Date: 11/01/1996

By Rory Watson

THE impending trial of two officials accused of misusing EU tourism funds underlines a new-found determination within the European Commission to crack down on fraud among its own staff.

The arrest of Greek fonctionnaire George Tzoanos and French temporary agent Pascal Chatillon, along with Mr Tzoanos' wife, came months after the two men were quietly dismissed last year. The two now face trial in Belgium and the Commission has confirmed that its staff will be actively involved in the proceedings.

The move highlights the Commission's commitment to working closely with national authorities in clamping down on possible fraud perpetrated by its own staff.

“Commission staff could be called in as witnesses and it is clearly established Commission policy to cooperate with the authorities concerned,” confirmed one EU official.

Criminal proceedings against officials in EU institutions for acts committed in the exercise of their functions are not unique. But they are extremely rare.

The last took place over six years ago and led to a prison sentence for a Commission official who was convicted of corruption in placing orders for office supplies.

The Commission's increasingly tough stand in the fight against possible fraud involving its officials has the backing of its own staff. As one senior staff representative explained: “It is a good thing the Commission tries to keep things as clean as possible. Otherwise bad habits in one area would contaminate others.”

The arrests are the latest development in the troubled saga of the EU's 1990 year of tourism, which was allocated 8 million ecu from the Union budget. Subsequently, annual EU funding to encourage one of the Union's major industries amounted to some 6 million ecu.

Tzoanos, who was head of the Commission's tourism unit, and Chatillon, who was recruited on the basis of over 20 years experience in the industry, are alleged to have received kickbacks in return for awarding projects to certain companies.

The payments are thought to have reached between 10 and 50&percent; of the total sums paid out and to have been worth hundreds of thousands of ecu.

Belgian police were alerted to the irregularities in the Commission's tourism department, particularly between 1989 and 1994, by both the Commission itself and by British Conservative MEP Edward McMillan-Scott, who had been pushing the Union since 1984 to play a more active role in helping the industry.

Police raided the men's homes during the nine-month investigation which involved checks on tourism and travel companies in Belgium, France and Greece.

The Commission, which had handed files over to the police concerning the tourism unit's dealings with firms in these countries, had conducted its own internal disciplinary inquiry earlier. This totally cleared a secretary in the unit of any involvement in the alleged scams.

Although the two officials were subsequently dismissed, Chatillon is understood now to be appealing against the decision.

McMillan-Scott, welcoming the latest turn of events, said: “I am pleased it appears that justice is now about to be done. But I am very concerned that I made it quite clear to the Commission and the Court of Auditors what was going on back in 1990. I had rock solid information and nothing was done.”

He also fears that the latest scandal could set back attempts to involve the Union in encouraging the tourist industry.

“It took eight years to get tourism on the agenda. This has soured things and I hope that we can make a new start in 1996. The credibility of the Commission has suffered a lot in the eyes of the tourism industry,” he said.

McMillan-Scott is now arguing that practical measures such as market research, promotions and pilot projects should be handled by an outside agency, modelled on the recently-established European Environmental Agency, while leaving legislative initiatives to the Commission.