Tuesday

18th Dec 2018

Commission admits huge Eurostat fraud

  • NEIL KINNOCK and colleagues dogged by the Eurostat scandal (Photo: European Commission)

The European Commission has come clean and admitted the huge extent of fraud in its statistical office, Eurostat.

At a hastily arranged meeting on Wednesday (9 July), administrative reform Commissioner Neil Kinnock and his monetary affairs colleague Pedro Solbes told the European Parliament that Eurostat offices had been raided the night before and all its files secured.

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 Commission acted after receiving two reports on Monday providing evidence that "serious wrong-doing on a much more widespread scale than previously thought may have taken place".

The Commission has decided to open proceedings against three Commission officials and, as a precautionary measure, a number of Eurostat managers will be moved to advisory functions.

It was also decided that the current General Director of Translation, Michel Vanden Abeele will take over as head of Eurostat.

Inquiry team

The Commission has further decided to set up an "inquiry team" of twenty officials to look into the Eurostat case.

The overall coordination will continue to be overseen by a group chaired by the Secretary General David O'Sullivan, who will also report on a monthly basis to the Commissioners responsible.

Some of the Presidents of the different political groups in the Parliament have expressed reservations about Mr O' Sullivan's role in the investigation, sources said.

Diemut Theato, head of the budgetary control committee, told the EUobserver that she would have preferred the internal auditor to do the job.

The Commission also suspended all contracts with Planistat, which is a French economic and statistical consultancy responsible for managing Eurostat’s sales to some private users. It has received 41 million euro from the Commission over 10 years.

Monetary affairs Commissioner Pedro Solbes said there are around 40 to 50 contracts between Eurostat and Planistat. The company also has a number of different contracts with several other departments of the Commission as well.

Financial envelopes

The Commission has discovered that some Eurostat officials proposed a fake sum of money to be used for contracts and then spend the leftover money as they pleased - this practice was used only with certain 'trustworthy' contractors.

The EUobserver was told that money was used to fund the Commission's volleyball team, for missions of officials and lunch receptions.

The paper notes that it was "relatively extensive practice in Eurostat until 1999 to set up irregular reserves (known as financial envelopes) through a number of contracts held with various specific contractors".

In 1999, when this came to light, the Eurostat senior officials asked that this practice be stopped. However, this instruction was delivered orally and no systematic following-up or monitoring notes the paper.

Some of the money may have been lost due to bankruptcy of the companies in question, but it seems that some of these secret bank accounts still exist.

Murky practices

OLAF has for some time been examining the case of Yves Franchet, the former Director-General of Eurostat, and Daniel Byk, a former departmental director, who are accused of siphoning Union money into a private account during their tenure of key posts at the Luxembourg-based organisation.

As part of the general attempt to be more transparent towards the Parliament, which recently approved the Commission accounts without knowing about the Eurostat affair, the paper notes that the Parliament must be kept informed of developments.

The question remains as to what extent the Commissioners were aware of the Eurostat scandal even as the Parliament was asked to approve the accounts.

The President of the European Parliament, Pat Cox said that the list of problems arising left him with a sense of deja vu and that he was "deeply disappointed" that four years after the resignation of the previous Commission, they found themselves in this situation.

For their part, MEPs in the budgetary control committee will hold a meeting within the next few days to assess these extraordinary revelations.

Letter to deepen Eurostat scandal

The European Commission could have reacted much sooner to stop alleged corruption at its statistical arm in Luxembourg according to Stern, a German news magazine.

Orban protests target state media in new front

Unprecedented protests against Hungarian prime minister Viktor Orban's "illiberal" style mark a rare united front of opposition parties, amid new violence against opposition MPs.

Anti-semitism 'disturbingly normalised' in Europe

Almost 40 percent of European Jews contemplate leaving their home country because they no longer feel safe, and almost 85 percent say their number one concern in Europe is anti-semitism and racism, according to a new EU survey.

Merkel loyalist AKK wins CDU leadership battle

Annegret Kramp-Karrenbauer, seen as championing similar policies to Angela Merkel, has won the CDU party leadership contest and is thus the frontrunner to become chancellor once Merkel leaves. But a split party will mean challenges.

News in Brief

  1. 3,500 UK troops on standby for no-deal Brexit
  2. Brexit: Opposition disagrees over no confidence vote
  3. EU court confirms suspension of Polish judges law
  4. France to tax Google, Apple, Facebook, Amazon
  5. EU negotiators agree CO2 targets for cars
  6. May: Brexit vote will be week of 14 January
  7. Rome finds extra budget funds to fit EU demands
  8. Polish climate talks end in agreement on rulebook

Opinion

EU parliament vote strengthens whistleblower protection

We must not undervalue what a massive step the European Parliament vote represents. The hard work has paid off. We can take a moment to celebrate, but the hard work begins again for finalising strong protection for European whistleblowers.

Stakeholders' Highlights

  1. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  2. Nordic Council of MinistersSeminar on disability and user involvement
  3. Nordic Council of MinistersInternational appetite for Nordic food policies
  4. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  5. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  6. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  7. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  8. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  9. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  10. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  11. Nordic Council of MinistersThe Nordic gender effect goes international
  12. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General

Latest News

  1. Muscat's one-man rule poses challenge for EU
  2. Orban protests target state media in new front
  3. Brexit and the Queen Sacrifice
  4. EU gives Switzerland another six months for a deal
  5. Fiscal discipline rules in eurozone are devastating
  6. EU capitals see weekend of tear gas and water cannon
  7. Bulgarian 'EU passports' whistleblower wants justice
  8. No more Brexit talks, despite May's pleas

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic design sets the stage at COP24, running a competition for sustainable chairs
  2. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  3. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  4. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  5. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  6. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  7. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  8. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  9. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  10. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  11. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  12. Mission of China to the EUChina: Work Together for a Better Globalisation

Join EUobserver

Support quality EU news

Join us