| Author (Person) | Cronin, David |
|---|---|
| Series Title | European Voice |
| Series Details | Vol.9, No.27, 17.7.03, p17 |
| Publication Date | 17/07/2003 |
| Content Type | News |
|
Date:17/07/03 MEPs are determined to find out why earlier fraud warnings were not probed, writes David Cronin IF THE [European] Commission had any substantive evidence on which to act, there is not a chance in hell it would have been ignored, in the hope that the issue would go away," Neil Kinnock declared last week. By all accounts, the internal reform commissioner gave a spirited performance before his colleagues in the College and political group leaders in the European Parliament, as he pledged a thorough probe into the alleged "vast looting" of taxpayers' money by data agency Eurostat. Yet in agreeing to prise open this Pandora's box, the Welshman is sure to face numerous questions about why the Commission is only now taking action against the Union's top number-crunchers, when suspicions of shady practices in Eurostat have been raised for many years. Sources in Union Syndicale, the biggest union representing the EU civil service, say they first appraised Erkki Liikanen, then the personnel commissioner, of concerns about Eurostat in the mid-1990s. They were worried that loopholes, enabling the agency to have individuals from outside firms working cheek by jowl with bona fide officials, were open to abuse. Memos from the union were sent to the Commission's Brussels headquarters in July and September 1996. Another union, Solidarité Européenne, broached similar fears in a leaflet, dated 12 December 1996 and circulated among Luxembourg-based Eurocrats. This queried whether the relevant tax and social security rules were being respected for staff employed on temporary contracts by Eurostat. The Commission did not turn a completely blind eye to the allegations. On 22 January 1997, Ubaldo Zito, then deputy head of its personnel directorate-general, wrote to his boss Steffen Smidt, about firms which were heavily dependent on the institution for their revenue. The firms mentioned included Centre Européen pour la Statistique et le Développement (CESD) and the Training of European Statisticians (TES) Institute in Luxembourg. Yves Franchet, the then Eurostat director-general who is now subject to disciplinary proceedings, was president of the former and a board member of the latter. Photius Nanopoulos, the former Greek official at Eurostat also subject to disciplinary action, sat alongside him on the TES Institute's board. Back in 1994, the European Court of Auditors had criticized the awarding of Eurostat contracts to CESD, as it had not taken part in a competitive bidding process. Zito, meanwhile, noted that a 1993 internal Commission document had urged a re-evaluation of the institution's relationship with external firms. Later, in January 1997, Michel Thierry, then political secretary of Union Syndicale, fleshed out his organization's concerns in a letter to Liikanen. Among the allegations he listed were that fictitious contracts had been drawn up for some firms working with Eurostat, that external contractors were undertaking tasks previously handled by fully-fledged officials, that confidential data was not being protected, that some officials were doing work for outside firms during normal office hours and that tendering rules were being bypassed. A subsequent note by an advisor to Liikanen, dated April 1997, says Yves Franchet had made a commitment to clarify his relationship with private organizations benefiting from Eurostat contracts. Neil Kinnock last week blamed Union Syndicale's failure to furnish Liikanen or Yves de Silguy, the then economics and monetary affairs commissioner whose portfolio covered Eurostat's activities, with further details about the agency for the fact the allegations were not investigated in greater depth. After the 1999 resignation en masse of Jacques Santer's Commission team, Danish official Dorte Schmidt-Brown was given responsibility for overseeing Prodcom, a Eurostat programme collating statistics on industrial output. She unearthed evidence suggesting that Eurogramme, the company subcontracted to run Prodcom, had presented a false financial picture of itself. The firm rejected the allegations, but the Dane was later vindicated by an internal audit report by the Commission in December 2000. Still, the executive continued working with Eurogramme, awarding it contracts worth €2 million in 1999-2001. It was only on 21 May this year that it decided to suspend all contracts between Eurostat and Eurogramme on what Pedro Solbes, the current economic and monetary affairs commissioner, called a "precautionary basis". Replying to a query from Danish left-wing MEP Freddy Blak last month, Solbes acknowledged the Commission continues to have "contractual obligations" with the firm worth almost €300,000. Whistleblower Paul van Buitenen, whose disclosure of mismanagement in the Santer Commission was instrumental in its downfall, then wrote in 2001: "Since I have started working in Luxembourg [as an EU food safety official] on 1 April 2000, information has reached me through numerous emails, conversations and anonymous envelopes, coming from Commission officials working in Eurostat, as well as external contractors. "This information always refers to financial malpractice, irregular tendering, secret networking and other mechanisms that might be harmful for the interests of the institution. At first, I did not pay much attention to these rumours, as such information is in circulation in every service. However, the number of officials that have contacted me on alleged irregularities happening in Eurostat is so high that I decided to present an inventory of these indications." That was included in a voluminous dossier which van Buitenen sent to the Commission's administration department and OLAF, its anti-fraud office, on 31 August 2001. The file alluded to suspicions that French firm Planistat had obtained contracts from Eurostat "through irregular procedures". In March this year, OLAF presented the public prosecutor in Paris with evidence of Planistat being used to divert €920,000 in EU funds to secret bank accounts. OLAF accused Franchet and high-ranking Eurostat official Daniel Byk of active complicity in this "vast looting" of taxpayers' money. Amid a growing clamour by MEPs for answers about Eurostat, the Commission recently requested its internal audit service (IAS) to investigate the agency. Although the IAS probe only began on 11 June it was able to produce what Kinnock called "compelling prima facie evidence" of wrongdoing by last week. The Commission acted quickly - within 48 hours it had initiated disciplinary proceedings against Franchet, Byk and Nanopoulos. But that is not enough to satisfy many Euro-deputies. Parliament insiders say they are determined not to let matters rest until they discover why earlier warnings did not receive greater attention. MEPs are determined to find out why the European Commission did not act soone ron warnings concerning serios fraud at its statistical arm, Eurostat. |
|
| Related Links |
|
| Subject Categories | Economic and Financial Affairs, Politics and International Relations |
