Monday

24th Sep 2018

Anti-fraud chief: EU was 'wrong' to lift my immunity

Giovanni Kessler, the head of the EU's anti-fraud office, is facing a big legal battle.

On Tuesday (31 May), he spoke out against a decision in March by the European Commission to lift his immunity.

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"I humbly think, it was a wrong decision, of course I might be wrong, this is my judgment, our judgment," he told reporters.

Kessler, who was presenting Olaf's 2015 annual report, is now taking the EU commission to the European Court of Justice in Luxembourg to reverse it.

The commission's move was triggered following a request by Belgium's public prosecutor over wiretapping allegations in a case that saw former EU commissioner for health John Dalli lose his job in 2012.

Kessler had listened into a recording of a 3 July 2012 phone call between the European Smokeless Tobacco Council (Estoc) secretary general Inge Delfosse, a lobbyist, and Maltese restaurateur Silvio Zammit.

Zammit was suspected of trying to extract millions of euros in return for influencing Dalli, who is also Maltese, to lift an EU-wide sale ban on mouth tobacco, known as snus.

Delfosse had made the call from the Olaf office without Zammit's knowledge it was being recorded. The taped conversation disclosed nothing useful to Olaf.

But if convicted, Kessler could face up to two years in prison and a fine given Belgium's tough criminal code.

It is the first time someone at Olaf has had their immunity lifted and Kessler says it risks setting a precedent that may have knock-on effects elsewhere.

"It's me in this case but tomorrow it might be any investigator of Olaf or any official of the commission," he said.

He noted laws differ in each member state, making it difficult for his team of investigators to conduct their broader administrative probes into allegations of EU budget fraud.

"If we have to stick or consider all the national legislation regulating an investigative act, we might be affected in our investigative capacity and also in our independence," he said.

The EU commission, for its part, says Kessler had personally informed them of his decision to take them to the General Court.

The Brussels-executive also wants to minimise the importance of the case.

A EU commission spokesperson told this website on the phone that Kessler's legal assault "is neither shocking, nor exciting, nor unusual, it's just business as usual".

"The important thing is that Olaf continues to work well and as you can see from the annual report today, they are doing well. They are doing a good job and that is what counts," he said.

In an emailed statement, he also added there was no link between between Olaf's work as an independent watchdog and the issue of Kessler's immunity.

Kessler's arch rival, the German centre-right MEP Ingeborg Graessle, is less diplomatic.

In an op-ed published in The Parliament magazine in late March, Graessle, who chairs the EP's powerful budgetary controls committee, described Kessler as "dangerous and unpredictable" .

Olaf's record year

According to Olaf's own assessment report, it is producing record results.

Last year, it recommended to national and EU authorities a total of €888 million for financial recovery in the EU budget.

National authorities and EU bodies are then tasked to recover the losses. But they managed only €187.3 million, around 10 percent lower than the sum recovered to the EU budget in 2014.

Olaf had also concluded some 304 investigations despite a drop in overall staff numbers.

At just over 100 investigations, most involved structural funds, followed by external aid at 66.

Most probes were conducted in Romania with 45 cases, followed by Bulgaria (19), Hungary (17), and Greece (13).

Olaf's director of investigations Ernesto Bianchi said the high numbers among the four EU states is only a reflection of Olaf's workload.

"We just happen in 2015 to conclude the investigations that predominately concerned these countries," he said.

European Public Prosecutor's Office

Olaf is likely to face big changes next year when EU states are set to reach a political agreement on the European Public Prosecutor's Office (EPPO).

Unlike Olaf, the EPPO can launch criminal probes and prosecute people and bring them to court.

"We are very much in favour of this because it will strengthen the financial interests in the field against the fight against fraud," said Olaf's director of policy Margarete Hofmann.

Proposed by the EU commission in 2013, the EPPO is now being discussed by the Council, representing member states.

The Council opposes some of the most controversial features. The Commission wanted a hierarchical structure with a chief prosecutor.

But the Council wants one person per country. It means a case in Poland, for instance would be supervised by a Polish prosecutor.

"We would still need Olaf because we have shared competence with EPPO and we will complement and support EPPO," said Hofmann.

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