22nd Oct 2020

EU spending still open to fraud, ex-top official says

The EU's €120 billion or so a year budget continues to suffer from "weak accounting controls" that leave it "vulnerable to error and fraud," the European Commission's former chief accountant, Marta Andreasen has told EUobserver in an interview.

Her comments come after the UK's House of Lords published the conclusions of a year-long study into Brussels spending on Monday (13 November), saying the EU Court of Auditors has applied unrealistic criteria in giving a negative verdict on the commission's accounts 12 years in a row.

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But the Court of Auditors' main concerns - that there is not enough transparency on the portion of the EU budget spent by EU member states - tell just part of the story, Ms Andreasen argues, with the detailed figures of the court's findings unmasking wider problems.

"When you look at the [commission's] restatement of the accounts for 2004 there is much room for serious concern," she explained, stating that Brussels has now recorded over €20 billion of so-called "pre-financing" for 2004 that had not appeared on the books before.

"These changes of more than €20 billion that have surfaced in some chapters would certainly cause heads to roll and the prosecution of the directors if they happened in the private sector," Ms Andreasen, who worked in the private sector for more than 20 years before coming to the commission in 2002, said.

"The European Commission [typically] blames member states but the responsibility for the control of funds, the authority to require supporting documentation and eventually suspend payment lies with the commission," she explained.

"The problem lies with a culture, characterized, among other things, by a persistent state of denial on the depth of the problem [by senior Brussels officials]. As in any situation in life unless you recognise the problem in its right dimension it will not be possible to find the adequate solution," the accountant added.

Ms Andreasen gave a withering assessment of the 25 strong-college of European commissioners, who go into Brussels for five years with good intentions but end up "more worried about their own political career than battling vested interests" in the EU executive.

In October, industry commissioner Guenter Verheugen was dragged through the mud over relations with his colleague, Petra Erler, after he complained that "too much is decided by [EU] civil servants" on spending in a non-accountable way, she pointed out.

Ms Andreasen also criticised the European Parliament for signing off EU accounts despite the Court of Auditors' negative reports and predicted that the likely new parliament president, German conservative MEP Hans-Gert Poettering, will toe the old line.

Andreasen hearing to reopen old wounds

The Argentine born woman - a 51-year old mother of two who now lives in Spain - was hired to run commission accounts in 2002 but suspended five months later after going public with worries that the EU's accounting system is open to fraud.

The commission, which eventually sacked her in 2004, says she broke confidentiality rules. But Ms Andreasen denies having said anything more than what can already be deduced from the public Court of Auditors' reports.

She is currently fighting to get her old job back via the EU civil service tribunal in Luxembourg, with a hearing tabled for 23 November, arguing that her dismissal is void as she was judged by EU officials of a lower professional grade than stipulated by staff regulations for such a case.

Ms Andreasen's story also gives an insight into personal pressure faced by malcontents in the EU administration. "They put pressure on me to sign off accounts and payments the legality of which I could not be assured of. I was literally threatened that I would lose my job if I did not obey," she stated, looking back to events in 2002.

"This time was difficult for me," she added on her two-year long suspension pending her 2004 dismissal. "I never knew how or when they would deal with my case. In the meantime, my professional life was stopped and I haven't been able to get a job since."

Commission has 'ways of breaking people'

Commenting on Ms Andreasen's case in an internal email in 2004, commission official Jules Muis called the affair "her personal and professional graveyard" while remarking that he himself had once been told by a colleague "we have ways of breaking people like you."

"It has not broken me," Ms Andreasen, who currently occasionally lectures on EU financial reform in Europe and the US, told EUobserver. "I never regret what I did. I wouldn't have done anything differently," she stated.

"Reinstating me might give a message to the public that the commission is serious about [financial] reforms."

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