Thursday

2nd Apr 2020

Anti-fraud office targets EU agencies

The EU's anti-fraud body, Olaf, has devoted "particular attention" to investigations targeting the bloc's own institutions, especially newly-created agencies prone to fraud and embezzlement, its 2009 activity report shows.

The bulk of ongoing investigations carried out by the European Anti-fraud Office (Olaf) at the end of 2009 were internal ones, the report published on Wednesday (14 July) shows.

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  • The UK-based police training agency spent EU money on personal cars (Photo: Cepol)

The 133 cases mostly concern officials from the European Commission, the EU parliament and EU agencies, but also the Committee of the Regions, the Data Protection Supervisor, the EU ombudsman and the European Investment Bank.

"Allegations forwarded to Olaf cover a wide range of wrongdoings from embezzlement, favouritism, fraudulent claims by staff and wrongdoing in tender procedures to conflicts of interest," the document reads.

A special focus is devoted to EU agencies: "The move by the EU towards delegating the responsibility for a number of its activities to a wide range of agencies across the scope of the activities of the Union poses new and different risks in terms of fraud and corruption. Olaf's operational experience has identified a number of issues particularly in the period immediately after the creation of new agencies."

The total financial impact of these investigations is estimated at €25 million. Although it is by far the lowest sum, compared to the 43 cases looking into fraud with EU structural funds, for instance, where the damage could be over €650 million, Olaf explains that it can choose to go after low-value cases "if the fraud represents a systemic problem or the reputation of the EU is jeopardised."

Asked why Olaf decided to focus on EU agencies in 2009, Olaf spokesman Pavel Borkovec told Euobserver that "there has been an increased number of cases concerning EU agencies" but also because the anti-fraud office "wanted to demonstrate the holistic approach it has taken in dealing with the risks of fraud and other irregularities."

Without specifically naming the agency, the report highlights the case of the Britain-based Cepol, EU's newly-created police training college, where the management used community money to buy personal cars, furniture and phones. "In the rush to set up the agency, key elements of the financial management and control had not been implemented," the report says, noting "the serious and systemic nature" of the irregularities.

The case was flagged up by another control unit - the European Court of Auditors - and was followed up by Olaf. The European Parliament subsequently refused to sign off Cepol's accounts, as long as the investigation over the €22,000 in question was ongoing.

"The responsible officials resigned from their posts and fundamental changes were made to the agency's internal procedures," the report says.

The highly-mediatised case of former UK Independence Party MEP Tom Wise is also mentioned, without naming him, as it is the only euro-deputy to have ever been sentenced to prison over claiming false expenses.

In one year, Mr Wise was paid close to €50,000 to reimburse the costs of employing a parliamentary assistant. The assistant, however, received less than a sixth of the money, while the rest was put into Mr Wise's private bank account. Despite Mr Wise having paid back the falsely claimed expenses, "the Olaf investigation concluded that there was sufficient evidence to demonstrate the MEP had been aware his actions were illegal" and his case was referred to British prosecutors. After pleading guilty, Mr Wise was sentenced to two years in prison.

The report also describes the case of a recently-recruited EU commission official who used falsified documents to support his request for a higher grade. Judicial authorities in this case did not pursue the case, because Olaf "only received the relevant information four years after the facts occurred." As a consequence, the commission "permanently downgraded" the official, a "severe disciplinary measure," as the report puts it.

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