Saturday

27th Aug 2016

EU anti-fraud office in 'open hostility' with independence panel

  • Giovanni Kessler - in the spotlight over his office's handling of the Dalli affair (Photo: ec.europa.eu)

The EU's internal fraud office, Olaf, has had a "significant breakdown" in relations with its supervisory committee - a panel designed to ensure the fraud investigators are working independently of external pressure.

The findings are part of a report published Wednesday (17 April) by the UK's House of Lords looking into fraud in the EU budget.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

The report found that between Olaf and its five-member supervisory panel, "the situation had progressed ... to a point where the relationship has broken down into open hostility."

The grounds for dispute says the report is the "lack of agreement" over the exact scope of the supervisory panel's power. The panel wanted virtually unlimited access to Olaf investigations.

But according to Rita Schembri - who has in the meantime resigned from the committee - Olaf "abruptly limited" access to its files in March 2012.

The head of the panel, Johan Denolf, indicated it was the supervisor rather than Olaf itself that was being supervised, while panel member and MEP Herbert Bosch said that without the panel's supervision "Olaf is an unguided missile."

Olaf chief Giovianni Kessler, who also testified at the hearing of the Lord's EU committee, argued the panel wanted access to "everything" and was turning itself into a court.

The report comes at a difficult time for Kessler, who is already in the spotlight over his office's handling of an investigation into John Dalli, an EU commissioner forced to resign late last year amid allegations he had accepted bribes.

But the exact nature of the scandal and Dalli's subsequent resignation remains murky.

A report by the supervisory committee on how Olaf handled the Dalli investigation is accessible only to a handful of MEPs, who must first sign a non-disclosure agreement.

Meanwhile, after Dalli resigned, allegations surfaced that Olaf was aware that one of the key events in the Dalli affair - a meeting between the disgraced commissioner and tobacco lobbyists - never took place.

The parliament is keen to shed light on the matter.

On Wednesday, (17 April) it voted in favour of an investigation into the Dalli case and into accusations by the supervisory board that Olaf had breached certain fundamental rights.

Misused EU funds - 'tip of the iceberg'

Meanwhile, the same Lords' report also looked at the broader issue of corruption in EU budget spending - around 80 percent of which is managed by member states.

It suggested that Olaf has too little funds to do its anti-graft job properly and that its corruption findings are prone to being ignored.

The commission said that in 2011 fraudulent activities swallowed around €404 million in EU monies. But this was disputed by experts.

"You can only see the very tip, and we really do not have any idea how much [fraud] there is," Rosalind Wright, a former member of Olaf's supervisory panel, told the Lord's hearing.

Using the UK's own level of corruption as a benchmark, the report concluded that in 2011, the total corruption sum for the EU budget could have been10 times higher, or €4.82 billion.

Looking at the UK specifically, the report noted no government agency took responsibility for how EU money was spent.

"No one was able to tell us with any confidence how much known EU fraud is perpetrated from within these shores," said the report.

News in Brief

  1. Hungary plans to reinforce border fence against migrants
  2. France's highest court suspends burkini ban
  3. Greeks paid €1bn more in taxes in June
  4. Greek minister denounces EU letter on former statistics chief
  5. Turks seeking asylum in Greece may cause diplomatic row
  6. Merkel becomes digital resident of Estonia
  7. Report: VW will compensate US dealers with €1bln
  8. EU mulls making Google pay news media for content

Stakeholders' Highlights

  1. GoogleBrussels - home of beer, fries, chocolate and Google’s Public Policy Team - follow @GoogleBrussels
  2. HuaweiSeeds for the Future Programme to Bring Students from 50 countries to China for Much-Needed ICT Training
  3. EFASpain is not a democratic state. EFA expresses its solidarity to Arnaldo Otegi and EH Bildu
  4. UNICEFBoko Haram Violence in Lake Chad Region Leaves Children Displaced and Trapped
  5. HuaweiMaking Cities Smarter and Safer
  6. GoogleHow Google Makes Connections More Secure For Users
  7. EGBAThe EU Court of Justice Confirms the Application of Proportionality in Assessing Gambling Laws
  8. World VisionThe EU and Member States Must Not Use Overseas Aid for Promoting EU Interests
  9. Dialogue PlatformInterview: "There is a witch hunt against the Gulen Movement in Turkey"
  10. ACCAACCA Calls for ‘Future Looking’ Integrated Reporting Culture With IIRC and IAAER
  11. EURidNominate Your Favourite .eu or .ею Website for the .EU Web Awards 2016 Today!
  12. Dialogue PlatformAn Interview on Gulen Movement & Recent Coup Attempt in Turkey