Lawyers blast Prodi as Eurostat row hots up

Date: 09/10/2003

By David Cronin

LAWYERS for two of the officials at the centre of the Eurostat controversy have accused Romano Prodi of pinning the entire blame for the affair on Yves Franchet, the agency's former director-general, based on "non-definitive" evidence.

The allegation comes in a letter to Diemut Theato, chairwoman of the European Parliament's budget control committee (Cocobu).

The letter, obtained by European Voice, claims the "sole purpose" of theattack made by the European Commission president against Franchet two weeks ago was "to hide the truth under mollifying terms".

In his 25 September address to Cocobu and political group leaders in the Parliament, Prodi contended that Franchet had "betrayed the legitimate trust his political masters had placed in him".

This allegation was based on findings by OLAF, the EU's anti-fraud office, that Eurostat's data shops had been complicit in the "vast looting" of taxpayers' money.

MEPs criticized Prodi for trying to shift the blame onto Franchet, rather than accepting that Pedro Solbes, the commissioner in charge of Eurostat, should shoulder political responsibility.

Franchet's lawyers, Laure Levi and Georges Vandersanden, of Brussels firm DeBacker, argue that they should be granted an opportunity to appear before Cocobu to put their client's side of the story. The firm also represents Daniel Byk, another former official at Eurostat who is facing disciplinary proceedings.

The lawyers state that Franchet "equally wishes to respond to your questions and he is at your disposal".

"He has, in effect, been accused of fraud, lack of transparency and misinformation on the sole basis of non-definitive reports and without having the possibility to explain and defend himself," they write.

It is understood that they regard interim reports prepared by the Commission, its internal audit service and OLAF as 'non-definitive' because some of the investigations into Eurostat are continuing. Prodi's spokesman Reijo Kemppinen said he could not comment as "an issue of principle" about a letter sent to the Parliament.

The DeBacker letter was discussed at a meeting of political coordinators in Cocobu yesterday (8 October). An MEP attending said no decision was taken on whether the lawyers or Franchet would be asked to address the committee.

In a separate development, Pedro Solbes has confirmed that yet another company which undertook work for Eurostat is under investigation by OLAF.

Geographic Information Management (GIM), which is based near the Belgian city of Leuven, received four contracts worth more than €500,000 in total from the Commission's directorate-general for regional policy in 1997. The management of two of these - concerning the compilation of road transport statistics - was later transferred to Eurostat in 2002.

GIM was originally set up by a Bahamas-registered firm, Kival Consultants. In 1998, Scottish MEP Winifred Ewing said "the Bahamas is one of the places that are known to have laws which make it impossible to verify the shareholdership of companies", adding it was "not advisable" for the Commission "to conclude contracts with companies of which the majority shareholders are located in such places".

In response to a Parliamentary question, Solbes insisted the Commission had not heard of Kival Consultants before.

However, GIM's managing director Vital Schreurs maintained that his firm had given the Commission details of its statutes before contracts were awarded. These, he added, declared that Kival had formed GIM. He also alleged that one of GIM's competitors had made allegations to the Commission which were "patently untrue", but declined to state what those claims were or name the competitor.

MEP Herbert Bösch, who raised the query with the EU executive, said GIM's background should have been researched before it was awarded contracts. The Austrian Socialist said he was "astonished" the Commission has decided "to name and blame just a few people in public" and then maintained the Eurostat scandal "has nothing to do with us".

A number of other firms with links to Eurostat are already known to be under scrutiny by OLAF; they include CESD, which has Franchet as a former president.

Viviane Reding, the education and culture commissioner, told this newspaper yesterday she has fallen victim to a "political game" after recent calls for her to give evidence to Cocobu in relation to the Eurostat inquiry. MEPs suspect irregularities in links between the European publications office, which comes under Reding's brief, and the EU data agency, for which it acted as a sales agent.

Lawyers acting for two officials at the centre of the Eurostat scandal have written to Diemut Theato, Chairwoman of the European Parliament's Budget Control Committee, accusing European Commission President Romano Prodi of placing blame for the entire affair on Yves Franchet, Eurostat's former Director-General.