Aid coalition faces axe over ‘irregularities’

Date: 08/02/01

By Gareth Harding

THE largest coalition of development aid groups in the Union faces the threat of imminent closure after the European Commission's decision to freeze payments to the body over alleged irregularities.

Redundancy notices have already been handed out to the 20 staff of the Liaison Committee of Development NGOs to the EU, which is widely known by its French acronym CLONG. However, a final decision to wind down the work of the organisation can only be taken at an extraordinary general assembly in April.

CLONG spokesman Sam Biesemans said the 900 development groups that make up the coalition were "deeply frustrated" at the hard-line attitude taken by Development Commissioner Poul Nielson since the start of the affair. "Twenty-five years' work with the Commission establishes certain practices," said Biesemans. "Never have we had people who have tried to kill us off in such a way."

Nielson says that an independent audit of CLONG's financial affairs uncovered evidence of shoddy book-keeping and lax accounting. While the audit found no evidence of fraud, the Commissioner said it painted a "worrying picture of financial mismanagement".

MEPs and several governments have urged Nielson to throw a lifeline to the embattled coalition and unblock the €8-million annual subsidy the group gets from the EU executive. The figure accounts for 80% of the coalition's total funding.

But the Danish development chief insists that the Commission has an obligation to Europe's taxpayers to recover the funds. "I still remember the applause I received at my hearing in the Committee on Development and Cooperation a year and a half ago when I said that I and this Commission would take the line of a zero-tolerance policy relating to mismanagement and all these problems," Nielson told MEPs last week.

The Commissioner is calling on the NGO to pay back €1 million of mis-spent money and has blocked the release of further funds until the sum is repaid.

But CLONG takes issue with many of the accusations in the audit. While admitting that €100,000 might have gone astray, it says that the major reason why the figures do not add up is due to fuzzy spending rules and questionable auditing methods.

Privately, EU officials say it is unlikely the development group will fold. "Just because they are winding down, doesn't mean that they're shutting up shop," said one.

However, even if CLONG survives, campaigners say relations between the Commission and NGOs have been poisoned. "I don't know if Nielson realises it but the image of the Commission has been totally destroyed," says Biesemans. "By trying to split development groups into goodies and baddies he has created a deep crisis of confidence in the NGO world."

The largest coalition of development aid groups in the Union faces the threat of imminent closure after the European Commission's decision to freeze payments to the body over alleged irregularities. Redundancy notices have already been handed out to the 20 staff of the Liaison Committee of Development NGOs to the EU, which is widely known by its French acronym, CLONG. However, a final decision to wind down the work of the organisation can only be taken at an extraordinary general assembly in April 2001.