Tuesday

16th Jul 2019

Exclusive

EIB 'maladministration' verdict over VW fraud report

  • European Investment Bank president Werner Hoyer in 2017. The EIB has so far refused to publish an anti-fraud report into their €400m loan to Volkswagen Group (Photo: EU2017EE Estonian Presidency)

EUobserver should have been granted access to a fraud investigation into a €400m EU loan to Volkswagen Group (VW), and recommendations on how to avoid future misuse, the European Ombudsman has concluded.

The European Investment Bank's (EIB) refusal to make the documents public constituted "maladministration", according to the Ombudsman's conclusions.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • 'The Ombudsman found that there was a very strong public interest in disclosure of the relevant documents,' she concluded. (Photo: European Union)

"The Ombudsman found that there was a very strong public interest in disclosure of the relevant documents and that this overrode the EIB's concerns," it said in a statement published on the Ombudsman website on Monday (1 April).

Ten years ago, the EIB granted the loan to VW to finance a project aimed at reducing emissions.

While the loan was repaid in 2014, the following year VW admitted to having cheated on emissions tests in a scandal which became known as Dieselgate.

The EU's anti-fraud body, the European Anti-Fraud Office (Olaf) investigated the case. In mid-2017, Olaf sent the EIB a report in which it said VW had misled the bank because it asked for the loan while also planning to cheat the EU's emissions tests.

This website had asked both Olaf and EIB to release this report, and filed an access to documents request.

After the EIB had twice refused access to the conclusions of the investigation into the loan, EUobserver complained to the European Ombudsman, an independent watchdog of the EU institutions.

The Ombudsman, Emiliy O'Reilly, and her team, found after a year of investigating the case that the bank's fears of negative consequences of publishing were ungrounded - and did not outweigh the "very strong public interest in disclosure".

"The case concerned serious misuse of €400m of public funds and misrepresentations by a leading European company as to their purpose," she said.

"The public interest therefore in knowing the details of how such money was acquired and used was both obvious and significant," she added.

The Ombudsman had opened her investigation a year ago this month and had several meetings with the EIB to find a solution.

One complexity in the case is that the EIB felt it needed permission from Olaf to publish the report - something the anti-fraud agency was not willing to give, out of fears that publication would undermine how Olaf carries out its investigations.

"Concerning the protection of investigative functions, the EIB stated that disclosure of investigative reports risks revealing the methodology or modus operandi of investigations, with a consequent risk of weakening the impact of the investigation," said the Ombudsman.

She said that she shared the concern of not giving away how the EU is uncovering fraud, but said that in this case Olaf's investigative activities had been "quite normal and routine for any investigative body".

In response to the Ombudsman inquiry, the EIB published a summary of the Olaf report in February 2019.

However, the Ombudsman still considers the full report should be made public, as well as Olaf recommendations on measures the EIB should take to prevent being misled in future.

The only redaction which the Ombudsman said would be acceptable, would be personal data.

"The Ombudsman proposed that the names of persons who worked for Volkswagen should be redacted for the protection of their personal data rights," she said.

Internal EIB papers

She also said that two internal EIB notes on the case, written in October, should be made public.

Initially, the Ombudsman had accepted the EIB's wish to keep those internal documents private, because the bank was still considering how to follow up on the Olaf report.

But in December 2018, the EIB had announced that it reached an agreement with the German carmaker.

The agreement included that EIB would "conclude its investigation" - which according to the Ombudsman means that the internal papers can now be made public, since there is no risk that the EIB's follow-up action is undermined by their disclosure.

The deal involved Volkswagen to "voluntarily not participate in any European Investment Bank project during an exclusion period of 18 months" and to contribute €10m to "environmental and/or sustainability projects in Europe".

To put this financial figure in perspective: VW's sales revenue in 2017 was €230.7bn.

The Ombudsman's recommendations are legally non-binding.

MEPs want Volkswagen EU loan fraud report published

The European Investment Bank has kept a report explaining how it was tricked into giving Volkswagen Group a €400m loan secret. MEPs want to make it public, plus a paper with recommendations on how to prevent future deceptions.

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.

EU investment bank rejects MEPs' plea for VW fraud report

European Investment Bank cites privacy and ongoing investigations as reasons for refusing to release an anti-fraud report into how it lent €400m to Volkswagen, while the company was rigging emission tests.

Exclusive

EU bodies dodge questions on secret VW loan report

The European Anti-Fraud Office (Olaf) and the European Investment Bank (EIB) have refused to answer detailed questions about the demand from the European Ombudsman to publish an Olaf report on a €400m EIB loan Volkswagen Group (VW) received through deception.

News in Brief

  1. Ansip's ex-cabinet chief to head EU cybersecurity agency
  2. Malta starts trial of journalist murder suspects
  3. Full text of von der Leyen candidacy speech to MEPs
  4. Von der Leyen open to further Brexit delay
  5. Von der Leyen promises carbon border tax
  6. Brexit: both UK PM candidates say Irish backstop is 'dead'
  7. Mogherini: Iran's nuclear enrichment 'reversible'
  8. Report: Selmayr to leave 'next week'

Magazine

The changing of the guards in the EU in 2019

The four most powerful EU institutions - Commission, Parliament, Council and Central Bank will all have new leaders in the coming ten months. Here is an overview.

Magazine

Explained: What is the European Parliament?

While domestic political parties often use the European Parliament as a dumping ground for unwanted politicians - and a majority of citizens don't bother to vote - the parliament, over the years, has become a dominant force in the EU.

Stakeholders' Highlights

  1. UNESDAUNESDA reduces added sugars 11.9% between 2015-2017
  2. International Partnership for Human RightsEU-Uzbekistan Human Rights Dialogue: EU to raise key fundamental rights issues
  3. Nordic Council of MinistersNo evidence that social media are harmful to young people
  4. Nordic Council of MinistersCanada to host the joint Nordic cultural initiative 2021
  5. Vote for the EU Sutainable Energy AwardsCast your vote for your favourite EUSEW Award finalist. You choose the winner of 2019 Citizen’s Award.
  6. Nordic Council of MinistersEducation gets refugees into work
  7. Counter BalanceSign the petition to help reform the EU’s Bank
  8. UNICEFChild rights organisations encourage candidates for EU elections to become Child Rights Champions
  9. UNESDAUNESDA Outlines 2019-2024 Aspirations: Sustainability, Responsibility, Competitiveness
  10. Counter BalanceRecord citizens’ input to EU bank’s consultation calls on EIB to abandon fossil fuels
  11. International Partnership for Human RightsAnnual EU-Turkmenistan Human Rights Dialogue takes place in Ashgabat
  12. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North

Latest News

  1. European Commission has first ever woman president
  2. Son: Malta trial for murdered journalist 'not enough'
  3. Von der Leyen's final appeal to secure top EU post
  4. EU talks tough on Turkey, but arms sales go on
  5. The Abortion Exodus - more Poles and Croats going abroad
  6. Poland's ex-PM loses EU parliament chair again
  7. Von der Leyen reaches out to left and liberal MEPs
  8. Farmers among new MEPs deciding on EU farming money

Stakeholders' Highlights

  1. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  2. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  3. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  4. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  5. Nordic Council of MinistersNordic commitment to driving global gender equality
  6. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  7. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  8. Nordic Council of MinistersNordic talks on parental leave at the UN
  9. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  10. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  11. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  12. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership

Join EUobserver

Support quality EU news

Join us