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19th Jan 2020

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EIB blames Ombudsman for not helping redact VW report

  • The European Investment Bank, led by president Werner Hoyer (l), refuses to publish a report on how the bank was misled by emissions-cheating Volkswagen Group (Photo: European Parliament)

The European Investment Bank (EIB) has rejected a request by the European Ombudsman to publish a 2017 report on how the bank was duped into lending Volkswagen Group €400m.

In an 11-page response, the EIB blamed the Ombudsman for not agreeing to join a "high-level inter-institutional meeting" with the bank and the author of the report, the European Anti-Fraud Office (Olaf).

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  • Emily O'Reilly, the European Ombudsman. The Ombudsman is an independent watchdog, although its recommendations are not legally binding (Photo: European Ombudsman)

The bank was "in principle" willing to publish a redacted version of the report, but wanted to sit down with the Ombudsman and Olaf to discuss how to redact it.

"The EIB is of the opinion that the outcome of the present inquiry would have been different if the EO [European Ombudsman] had accepted the EIB's invitation to a high-level inter-institutional meeting," the EIB said.

In a comment to EUobserver, the Ombudsman office said "it is not our practice on access to documents cases to meet the institution and discuss redactions one by one".

"We made our assessment based on an inspection of the documents, and views already received in writing from the EIB," said the Ombudsman, which had recommended that the EIB publish the report in full, with the exception of personal data.

"Furthermore, such a meeting would only needlessly prolong the inquiry yet further for the complainant," the Ombudsman added.

Indeed, the case is almost two years old now, and involves an Olaf inquiry into the €400m VW loan, granted in 2009, as well as recommendations to the EIB to prevent future fraud.

In mid-2017, Olaf concluded that VW had "misled" EIB when it applied for the loan, which has been fully repaid since then.

When EUobserver asked Olaf to publish the report, it referred to the EIB - which then referred back to Olaf.

This website then filed a formal access to documents request, which the EIB rejected in March 2018, citing concerns of undermining privacy, ongoing court proceedings, and investigations.

In the meantime, a majority of members in the European Parliament had also called on the EIB to publish the report. So did non-governmental organisations like CEE Bankwatch.

Following the EIB's rejection of an appeal, EUobserver filed a complaint to the European Ombudsman, which was able to access the documents to make an independent assessment.

'Maladministration'

Last April, the Ombudsman said that the EIB should have published the report and recommendation - and that not doing so was "maladministration".

The EIB had until Saturday (29 June) to reply to the Ombudsman's recommendation, which is legally non-binding. The Ombudsman published the EIB's response on Monday.

"The bank deems that the confidentiality of documents pertaining to the Olaf investigation was justified by the need to ensure that the EIB could adequately follow up on Olaf's recommendation," it said.

The EIB said that it was willing to publish a redacted version of the Olaf report "subject to a condition: that a fair balance is made between the public interest in disclosure and other public interests, which should be protected by redacting the Olaf report beyond personal data".

It disagreed with the Ombudsman's assessment that, because the commercial information was more than a decade old, it was outweighed by the public interest.

"...[The] EIB persists in considering that the disclosure of commercial information, shared with EIB clients as part of a banking relationship based on trust and confidence, would result in a loss of confidence of future EIB clients," said the EIB.

The Luxembourg-based EU body concluded its reply by saying that "despite its unsuccessful attempts, the EIB reiterates its invitation to EO and Olaf".

The EIB would not comment on the record why it could not make the redactions itself without the Ombudsman. One source in the bank pointed to the last paragraph to stress the invitation to the Ombudsman and Olaf was still open.

Anna Roggenbruck, campaigner for environmental lobby group Bankwatch, has also been trying to have the documents published.

"Both Olaf and EIB as the EU institutions have duties related to transparency," she told EUobserver in an email replying to the EIB's latest rejection.

"They both failed to consider and notice that in this case of VW's fraud an overriding public interest prevails over the company's economic interest," she said.

"The EU's institution failed to explain how VW imperceptibly fraud the EU's financial support at the cost of our health and environment. Now, the Bank tries to cover this malfunction by imputing wrong procedure by European Ombudsman," said Roggenbruck.

Arrogance

"I must say that the arrogance of EIB shows total lack of respect of the European Ombudsman, an important legal defender," said Green Finnish MEP Heidi Hautala.

"To complain that EO did not conduct interinstitutional negotiations with OLAF about publishing the report of VW cheating is only a way for this EU institution to deny its own accountability towards the citizens. EIB cannot refer to OLAF on access to the document in its possession. It should already have followed the recommendation of EO," she told EUobserver in an email.

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