Monday

19th Feb 2018

EU anti-fraud office accused of cover-up in Dalli affair

  • Former commissioner for health John Dalli is said to have suffered a nervous breakdown following his forced resignation in last year (Photo: ec.europa.eu)

The EU anti-fraud office, Olaf, has been accused of telling a key witness in the "Dalligate" affair to lie and of illegally listening in on people's phones.

The first allegation came out in a hearing by the European Parliament's budgetary control committee in Brussels on Thursday (21 March).

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French Green MEP Jose Bove dropped the bombshell.

He said he had met on Wednesday with two people, Johan Gabrielsson and Cecilia Kindstrand-Isaksson, from Swedish Match, a Stockholm-based firm which makes mouth tobacco or "snus."

Swedish Match confirmed to EUobserver the meeting with Bove took place.

The tobacco company was at the heart of the affair which last year cost EU health commissioner John Dalli his job.

Dalli lost his post after Olaf said that Dalli's associate, Maltese businessman Silvio Zammit, met with a Swedish Match lobbyist, Gayle Kimberley, in Malta in February 2012, and that Zammit offered her to fiddle an EU tobacco law in return for €60 million.

But according to Gabrielsson and Kindstrand-Isaksson, the February meeting never took place.

The pair told Bove that Kimberley met with Dalli himself in January.

But they said she made up the story about meeting Zammit in February and later came clean about her lie.

They also said they told Olaf about her retraction, but Olaf asked Swedish Match and Kimberley to stick to the fictional account for the sake of its investigation.

"Mr Gabrielsson said, and I've recorded it, that Olaf asked him not to change his story and stick to the idea that there had been two meetings," Bove told MEPs and press in Thursday's hearing.

"I think all this is far too serious. It shows a major dysfunction in the European institutions," he added.

Olaf denies any wrongdoing.

"All evidence was collected lawfully," its spokesman, Pavel Brokovec, told EUobserver in an email.

He noted that he cannot discuss the matter in any more detail because it would require the disclosure of confidential information.

In a second bombshell, Austrian left-wing MEP Herbert Bosch, told a separate parliament hearing that Olaf breaches people's fundamental rights and the terms of its mandate by recording private phone conversations in the course of its work.

"Olaf's legal basis to undertake these actions is not apparent from the text of the regulation [on Olaf] and no specific legal analysis has been made by Olaf prior to their execution [of the alleged wiretaps]," he noted.

Bosch is currently working on a report into Olaf's general conduct, due in April.

Olaf also denies the Bosch charge.

Its office told EUobserver it has never conducted wiretapping or illegally recorded telephone conversations.

Going back to Dalligate, it remains unclear why Kimberley lied and why she later came clean.

Asked why Kimberley had lied about the meeting, Swedish Match's spokesperson Rupini Bergstrom said "I have absolutely no idea. I only know that she had reported to us that she had two meetings".

On the alleged wiretaps, a parliament source further muddied the waters by telling this website that Bosch has in the past voiced interest in replacing Olaf head, Giovanni Kessler, in the Olaf top post.

Thursday's revelations sent a shockwave through parliament.

For her part, German centre-right deputy Ingeborg Grassle in a statement after the Bove hearing called for Kessler's resignation.

She also said that the presidents of parliament's political groups should fully disclose the contents of a report into Olaf's handling of Dalligate written by the Olaf supervisory board.

The report is currently sealed away in a safe in a small room in European Parliament.

Limited access is only given to the presidents, who must first sign a non-disclosure agreement. They are allowed just three hours to thumb through a paper, which sources say is extremely complex and long.

In a final twist showing the cozy relationships between lobbyists and EU officials, it came out that both Swedish Match's Gabrielsson and its freelance lobbyist, Kimberley, used to work for the commission's enlargement bureau before going into the private sector.

MPs demand Council become more transparent

Three Dutch MPs, on behalf of 26 national parliamentary chambers across the EU, are demanding more transparency. 'The Eurogroup is the most opaque of them all,' complained Dutch MP Omtzigt.

Eurogroup starts process to pick new ECB chiefs

Eurozone finance ministers will pick who they recommend to become the European Central Bank vice-president - the choice is between their Spanish colleague Luis de Guindos, and the governor of the Central Bank of Ireland, Philip Lane.

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