I did nothing wrong, Lamy tells Fléchard fraud inquiry

Date: 22/03/01

By John Shelley

COMMISSIONER Pascal Lamy strongly defended himself against accusations of wrong-doing at a hearing called by MEPs probing an export subsidies fraud case.

The EU trade chief said the part he and his staff played in the decision to reduce a fine against the French firm at the centre of the case was entirely proper.

The firm, Fléchard, had its fine cut from €17.6 to €3 million after it was caught claiming subsidies for butter supposedly earmarked for the Soviet Union but actually destined for Poland.

Former Commissioner René Steichen - farm chief at the time of the decision in 1994 - told the hearing that he believed the fine should have been double the figure that was eventually decided.

Both he and Lamy admitted that the French government had lobbied the Commission to reduce the fine.

Lamy said: "I think the pressure clearly had an effect in the sense that the maximum fine was not regarded as justified. As for the rest of the procedure I don't think it was influenced."

Lamy's comments came as the European Parliament's budgetary control committee grilled him, Steichen, former Budget Commissioner Peter Schmidhuber, and current Commissioners Franz Fischler and Michaele Schreyer on exactly what had happened in the Fléchard case.

MEPs believe that the pressure applied by France over the fine was unlawful. The decision to cut it was taken during a meeting chaired by then Commission President Jacques Delors' deputy chief advisor in January 1994. The minutes of that meeting have since disappeared.

Steichen told MEPs that this was the only case he had known of in which a decision of this type was taken at such a meeting. He also questioned whether the decision to reduce the fine so drastically, because of fears about the impact it would have on the company, was fair.

"The €3 million solution was adopted on the basis of the profits and losses of the company," he said. "Whether that was right is a question open to discussion."

Lamy, who was chief advisor to Delors at the time, insisted that the decision was not taken because of political pressure; ultimately it was down to the Commission's independent financial controller, he said. "Neither I, nor the budget Commissioner, nor my deputy, nor the president of the Commission had the power to give instructions to the financial controller," he said.

Tempers occasionally ran high in the hearings, stretching over two days, with the Commissioners complaining they were being asked questions they had already answered several times and MEPs accusing them of not giving full responses.

German centre right MEP Gabriele Stauner, asked if it was possible that Delors' private office had a network of sympathetic officials who could influence decision making and by-pass the Commissioners.

"You might well want to investigate such networks, but it's not for me to do so," said Schmidhuber.

Commissioner Pascal Lamy strongly defended himself against accusations of wrong-doing at a hearing called by MEPs probing an export subsidies fraud case.