Thursday

19th Oct 2017

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.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

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.

Tusk summits to create new-model EU

Tusk has proposed a series of 13 top-level talks to take forward European reform, but his backing for a multi-speed Europe risks deepening divide.

Catalonia to declare independence in a few days

Spain's king, Felipe VI, said Catalonia's leaders were breaking up the country's unity as hundreds of thousands of Catalans rallied against police violence at Sunday's referendum.

Focus

Health MEPs want to phase out glyphosate by 2020

A committee resolution said the proposal to renew the glyphosate permit for a decade "fails to ensure a high level of protection of both human and animal health and the environment".

News in Brief

  1. Tusk: 'No space' for EU intervention in Catalonia
  2. Austrian PM calls Brexit talks speed 'big disappointment'
  3. PM Muscat: journalist murder 'left a mark' on Malta
  4. Belgian PM: No crisis with Spain over Catalan remarks
  5. Ireland PM: Further Brexit concessions needed from UK
  6. Merkel: rule of law in Turkey going 'in wrong direction'
  7. Finnish PM: EU 'frustrated' with slow Brexit talks
  8. Dutch PM: Catalan crisis is not a European issue

Stakeholders' Highlights

  1. European Jewish CongressEJC Applauds the Bulgarian Government for Adopting the Working Definition of Antisemitism
  2. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  3. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  4. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  5. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  6. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  7. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  8. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  9. CECEE-Privacy Regulation – Hands off M2M Communication!
  10. ILGA-EuropeHealth4LGBTI: Reducing Health Inequalities Experienced by LGBTI People
  11. EU2017EEEHealth: A Tool for More Equal Health
  12. Mission of China to the EUChina-EU Tourism a Key Driver for Job Creation and Enhanced Competitiveness

Latest News

  1. Digital debate will be first test of Tusk's new policy crowbar
  2. EU Parliament: EU migrant quotas do have a future
  3. EU countries praise Tusk's new summit plans
  4. Commission employs double standards in Spain
  5. Legal study sounds alarm on 'Baysanto' merger
  6. Health MEPs want to phase out glyphosate by 2020
  7. Tusk: EU migrant quotas have 'no future'
  8. Spain still wants to host EU agency in Catalan capital