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2nd Mar 2024

EU probe into VW loan remains opaque

  • Volkswagen equipped millions of diesel engines with defeat devices (Photo: Volkswagen)

There is a lot of uncertainty surrounding the conclusion of an anti-fraud investigation into a €400-million European Investment Bank (EIB) loan provided to Volkswagen, which cheated on EU vehicle emission tests.

The EU's anti-fraud office, Olaf, finished its investigation in late July, but does not want to comment on the record about what it found.

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  • Last January, EIB chief Hoyer said the bank had 'not found any indication' its loans to Volkswagen had been misused. Seven months later, he said the EIB never concluded its own probe (Photo: EIB)

When this website asked the Olaf press office whether it would publish the report, it was told to ask the EIB. The EIB then referred back to Olaf.

“Olaf has produced the report. Hence it is Olaf’s decision to publish or not publish the report,” an EIB official told EUobserver on Thursday (24 August).

The EIB did not want to comment on the record, but made the official available to respond anonymously.

On 31 July, news website Politico reported that Olaf had concluded that Volkswagen acquired the EIB loan through “fraud” and “deception.”

Olaf's press office did not want to go on the record to confirm or deny that press report, based on anonymous Olaf sources. However, it did provide a statement that hinted at misconduct.

“Olaf sent its final report and a judicial recommendation to the German national authorities, namely the public prosecutor’s office in Braunschweig, Germany,” it said.

Braunschweig prosecutors are leading the investigation into Volkswagen's suspected emissions fraud.

Disappointed

The EIB has confirmed publicly that it has been "misled" by the German carmaker.

EIB president Werner Hoyer gave a statement on 1 August, revealing one of the report's conclusions.

“We are very disappointed at what is asserted by the Olaf investigation, namely that the EIB was misled by VW about the use of the defeat device,” said Hoyer.

Volkswagen used defeat devices in millions of diesel cars to pass EU emissions tests. According to the Politico article, the car company used the EIB loan to finance work on the EA 189 diesel engine, which contained a defeat device.

“We still cannot exclude that one of our loans … was linked to emission control technologies developed at the time the defeat software was designed and used,” said Hoyer.

No indication of fraud?

That was a very different approach compared to what Hoyer said last January, at the EIB's annual press conference.

“We have not found any indication that our loans might have been used for fraudulent purposes, which are the source of the problem for Volkswagen” Hoyer told journalists on 24 January.

“As far as we know - and we have investigated very, very thoroughly - our loans to Volkswagen have not been abused,” he added.

In August, however, Hoyer said “the EIB had not concluded its own investigation of the case”.

The bank chief has now said that the internal probe was put on hold “to avoid duplication” with Olaf's inquiry, something that he did not mention in the January press conference when he implied all investigating had been concluded.

Anti-fraud policy

The case raises questions about the bank's implementation of its anti-fraud policy, something Olaf's press office highlighted.

“Olaf recommended that the European Investment Bank (EIB) take active steps in implementing their anti-fraud policy,” Olaf said.

That advice implies that the EIB had until now not implemented its anti-fraud policy, at least not to the fullest extent.

Hoyer, however, said that the EIB “needs no encouragement to apply the provisions of its anti-fraud policy wherever relevant”.

The anonymous EIB official said the bank is now discussing what can be learned from the VW case.

The Volkswagen loan had already been paid back. Taxpayer money is usually not involved because the EIB borrows from the open market, backed by member states' guarantees.

EIB silent on report into 'fraudulent' VW loan

European Investment Bank vice-president Taylor tells EUobserver the fraud investigation into a €400 million EIB loan to Volkswagen had 'considerable ramifications', but didn't want to explain why the report was kept secret.

EIB 'more sensitive' to fraud after Dieselgate

The president of the European Investment Bank, Werner Hoyer, said the bank had high standards - but did not explain why an anti-fraud report on a loan to Volkswagen was being kept secret.

Secrecy of VW fraud report 'unacceptable', says MEP

Finnish MEP Heidi Hautala won a trailblazing court case two decades ago for the right of EU citizens to receive 'partial access' to documents. Now she says it is "outrageous" the European Investment Bank is refusing to release Volkswagen documents.

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