Schreyer: anti-fraud office must improve its flow of information

Date: 20/03/03

By David Cronin

OLAF, the EU's anti-fraud office, has been told it must improve its rules for notifying the European Commission on cases it hands over to national prosecutors.

This follows the revelation that OLAF decided last July to send a "restricted note" to David O'Sullivan, the Commission's secretary-general, informing him that it had transferred documents relating to its probe into Eurogramme, a contractor for the Union's data agency Eurostat, to Robert Biever, Luxembourg's public prosecutor.

Portuguese MEP Paulo Casaca says it is "unbelievable and unacceptable" that Pedro Solbes, the economics and monetary affairs commissioner, was not informed of the move by OLAF, as Eurostat falls within his portfolio.

The Socialist deputy, author of a report on the Union's 2001 budget, said he considered recommending that colleagues refuse to sign off the Commission's accounts for that financial year. He decided against this, however, after Budget Commissioner Michaele Schreyer promised to revise the rules. The European Parliament's budget control committee is due to vote on granting discharge for the 2001 accounts today (20 March).

In a letter dated 28 February, Schreyer told Casaca: "This case highlights the need to improve the flow of information from OLAF to the Commission and we will, together with OLAF, explore the means of achieving this improvement, whilst fully respecting the legal framework for OLAF."

Franz-Hermann Brüner, OLAF's director-general, has also agreed to examine this matter. "I share your view that adverse findings about a company with contractual links to the Commission should be communicated to the relevant Commission services," he wrote to Casaca. Brüner explained that his officials, who sent the restricted note to O'Sullivan alone, were following procedures drawn up shortly after OLAF was established in 1999.

Eurogramme was at the centre of allegations made by whistleblower Dorte Schmidt-Brown last year. The Danish Eurostat employee highlighted how it had secured a €250,000 contract to compile industrial output statistics despite claims it had presented a false picture of its financial situation.

In her letter to Casaca, Schreyer explained that the British company which owned Eurogramme had transferred its stockholding to a Luxembourg-registered firm, Calethon. "Given the uncertainty about the exact nature of the transaction between Eurogramme and Calethon and the lack of complete information on the financial and operational capacity of Calethon, Eurostat has decided to suspend all payments under current contracts to Eurogramme or Calethon on a precautionary basis," she added.

Eurogramme had contracts worth €1.6 million with Eurostat by the time the case was referred to the Luxembourg prosecutor last summer. According to Schreyer, "an exhaustive analysis of the amounts contractually due compared to the work carried out until now will be undertaken before proceeding to any payment".

The Commission's relationship with OLAF has been the subject of some controversy since the time of its inception - in the wake of the fraud accusations which triggered the collapse of the Santer Commission. Although the office nominally enjoys political independence, it is answerable to Schreyer for its activities.

OLAF, the EU's anti-fraud office, has been told it must improve its rules for notifying the European Commission on cases it hands over to national prosecutors.