Auditors say city exaggerated costs charged to Parliament

By Simon Taylor

Date: 08/06/06

The European Parliament's internal audit service has concluded that the city of Strasbourg could not justify around 32 million euro it received from the EU institution.

The city had claimed that compensation and a share of rent were justified by costs of _78m that it had incurred for two buildings occupied by the Parliament. The auditors estimate that 32m euro of the 78m euro is unjustified.

Their findings were presented yesterday (7 June) to a working group of MEPs which is investigating the rental arrangements for two buildings in Strasbourg.

In April MEPs learned that the city of Strasbourg had been taking part of the annual rent the assembly has paid for the buildings since 1979 and was expecting 29m euro in compensation if they were sold.

Members of the European Parliament's budgetary control committee are holding out against moves to buy the two buildings at the heart of the row before the working group's investigation is complete.

The Dutch Liberal MEP Jan Mulder told the bureau, the committee of senior MEPs responsible for administration, that he would not propose freeing up funds to buy the two buildings.

Under the Parliament's rules, funds from the budget for buying items such as buildings can only be released on a proposal from the budgets committee.

Mulder is responsible for buildings policy on the budgets committee and also a member of the budgetary control committee.

German centre-right MEP Markus Ferber, a member of the working group, criticised plans by the bureau to buy the buildings for 107 million euro.

The figure of 107m euro represents the 136m euro the Parliament had earlier agreed minus 29m euro which the city of Strasbourg would have received upon the sale.

At a meeting of the working group yesterday (7 June), in an exchange with French Green MEP Gérard Onesta, who is responsible for buildings policy in the bureau, Ferber asked how he could negotiate the purchase "before we have the final figures on the profit Strasbourg has made?".

He added: "We don't want to pay twice."

Onesta told MEPs that unless a decision on the purchase was taken soon, the owner of the buildings, SCI Erasme, might not accept the 107m euro price and might even sue the Parliament for failing to proceed with buying the properties. This could lead to the assembly paying a higher price for the buildings, he warned.

The funds set aside for buying buildings could also be lost if they were not spent by the end of the year, he warned.

The MEPs' inquiry should be concluded by the end of this month so the assembly could approve a report in October.

Fabienne Keller, the Strasbourg mayor, said that the city had had to pay for improving the buildings' security, insuring against the Parliament quitting Strasbourg and to cover exchange-rate fluctuations. International accountancy group PricewaterhouseCoopers is currently investigating the accounts and are expected to present their findings on 20 June.

MEPs have agreed to withhold rent until the affair was resolved. But according to a report by Parliament's legal services, the Parliament has no legal basis for suing the city of Strasbourg for the money it paid unwittingly.

Article reports that the European Parliament's internal audit service concluded on 7 June 2006 that the city of Strasbourg could not justify around €32 million it had received from the EU institution. The city had claimed that compensation and a share of rent had been justified by costs of €78 million that it had incurred for two buildings occupied by the Parliament. The auditors estimated that €32m of the €78m were unjustified.

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