Nuclear project fraud allegations rebuffed

Date: 29/10/1998

By Simon Coss

THE European Commission has strongly rejected allegations of fraud in the management of the Union's multi-million-ecu programme to improve the safety of nuclear power plants in the former Soviet bloc.

Earlier this week, reports in several newspapers across Europe quoted a confidential study by the Court of Auditors, the EU's financial watchdog, as saying that several million ecu had effectively gone missing in Russia. The funds were allegedly spent on a number of nuclear research projects, only one of which had produced any results by the end of last year.

But the Commission insists that the report contains no allegations of fraud or mismanagement. “There is no mention of fraud in the document,” said Lousewies van der Laan, spokeswoman for Foreign Affairs Commissioner Hans van den Broek.

The institution does concede that the report mentions “irregularities”, but says this cannot be equated with fraud, which is a criminal act.

It is clear, however, that the Court of Auditors believes improvements need to be made in the way the nuclear programme - part of the Phare and Tacis assistance schemes to central and eastern Europe and the former Soviet Union - is managed.

The document is understood to criticise the fact that projects are often slow to get off the ground because administrative procedures are too cumbersome. In addition, it takes the Commission to task for spending too much money on employing consultants and experts to carry out work. It says it is more difficult to keep track of funds if they are dispersed through a network of local contractors and subcontractors. The financial watchdog also criticises the high salaries paid to many consultants and argues that some of the programme's accounting procedures are less than transparent.

But while the Commission insists that the Court of Auditors' report does not contain allegations of fraud, some members of the European Parliament remain concerned about the way the nuclear safety programme is being run.

British Conservative MEP Giles Chichester said he had heard “persistent rumours” of money going astray, notably in Russia. He has also written to Commission President Jacques Santer asking him for clarification as to how the nuclear safety programme is being managed.

Meanwhile, a report produced this week by the environmental campaign group EU Enlargement Watch claims Union funds are often being used in the former Soviet bloc to upgrade unsafe reactors which should be shut down.

“Grants and agreements never intended to increase the lifetime of high-risk reactors have actually been used as part of larger retrofitting programmes while insufficient funds have been given to assist with decommissioning. As a result, all the high-risk reactors in accession countries are still operating,” says the report.