Wednesday

18th Jan 2017

EU commission seeks answers from Kroes

  • Mint Holdings Ltd is registered in the Bahamas, an offshore tax haven. (Photo: Neelie Kroes)

The European Commission has asked former competition chief Neelie Kroes to clarify her links to an offshore firm.

The commission head, Jean-Claude Juncker, wrote to her on Thursday (22 September), to ask questions such as when she had joined Mint Holdings, a company registered in the Bahamas, and what instructions she had given to her lawyers pertaining to the company.

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"All this needs to be clear," said an EU official.

Juncker did not give her a deadline to respond, but she is expected to write back quickly.

Her lawyer had already written to Juncker by email last Friday to say that Kroes had forgotten to mention Mint in her declaration of interests back when she was commissioner.

The lawyer also said that she had received no payment from the firm and that she relinquished her directorship of it in 2009.

That email had been overlooked, EU officials said, until the Kroes story broke in media on Wednesday.

A confirmed violation of the EU Treaty’s article 245, which outlines the code of conduct for commissioners, could see the perpetrator lose their pension and their “transitional allowance”, a portion of their wage paid for three years after they depart office.

In Kroes’ case, the 76-year old is entitled to an EU pension but does not draw one. "She didn't ask for it so she is not receiving it," said an EU official.

That means she could only lose her allowance, which, for Carl Dolan from the NGO Transparency International, would be more symbolic than anything else.

Kroes has already waded into controversy by landing a job on the advisory board of US car-sharing firm Uber, a company she had defended during her time as digital agenda commissioner.

It is unclear if she does any other lobby work, but earlier this month, she also defended US tech giant Apple in its tax clash with the commission by writing an op-ed in The Guardian, a British newspaper.

The intern

Kroes' ties to Mint Holdings has also raised questions on her links to Jordanian businessman Amin Badr-El-Din.

Badr-El-Din is another director at Mint Holdings and had reportedly worked with Kroes to create "the world’s premier gas company" by buying up Enron's international assets.

The plan fell apart after Enron, an American energy giant, collapsed.

In another twist, Amin Badr-El-Din's son, Khaled, on his outdated website said he had an internship lined up with Kroes in 2007 when she was the EU competition commissioner in late 2007.

"He [Khaled] will attend meetings in her private office," notes the personal website.

Asked by press in Brussels on Thursday if Kroes had granted the internship, the EU commission said it actually never took place.

Ethics and oversight

The EU's anti-fraud office Olaf, for its part, said it was aware of the Kroes reports but declined to comment on the matter.

The agency is not consulted on the declarations of interest prior to the commissioners taking office, but it can, if it so chooses, investigate cases of alleged serious misconduct by EU officials.

Emily O'Reilly, the EU ombudsman, has also refrained from commenting directly on the Kroes case.

But she told the Washington-based International Consortium of Investigative Journalists (ICIJ) that such incidents reflected badly on the EU.

"The negative impression it leaves with the public tends to resonate more strongly than any positive counter steps subsequently undertaken," she said.

The Kroes affair comes shortly after former commission president Jose Manuel Barroso took a job at Goldman Sachs, a US mega-bank that helped to cause the 2008 financial crisis.

"There are certain things that even the strictest rules like ours cannot fix. This is the case of our former president who made the choice to work go for a certain bank and this is now the case of a former commissioner, who apparently did not respect the rules and did not tell the commission about it," said EU commission spokesperson Margaritis Schinas on Thursday.

EU should raise own taxes, says report

A group chaired by former Italian PM and EU commissioner Mario Monti says Brexit should be used to create EU-level levies to depend less on member states contributions, and to abolish member states rebates in the EU budget.

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