in Ivory Towers Apr 99:
European Seminar, University of East Anglia, Norwich
Allegations of mismanagement and fraud have been made against the
European Commission ever since its birth in 1957.
Under pressure from Conservative MEPs the Court of Auditors was
established in 1977. It
failed to detect and eliminate fraud & mismanagement, especially in
the European Commission.
UCLAF (Unite de Coordination de la Lutte Anti Fraude) – a
specific anti-fraud unit under direct authority of the President of the
Commission, was established in 1987. UCLAF has not succeeded in fighting
fraud because it is an in-house unit of the Commission and it is reluctant
to investigate senior officials. Where serious fraud or mismanagement may
be proven against senior officials they are “retired” generously under
Article 50 of the Staff Regulations, enabling them to depart with their
reputations intact and with a generous pension!
In 1990, Edward McMillan-Scott, the Conservative MEP, denounced
mismanagement and fraud in the European Year of Tourism (EYT) Programme
& called for the Court of Auditors to investigate. Neither the Court
of Auditors nor UCLAF succeeded in uncovering serious irregularities.
Four years later (March 1994), the Commission suspended two
officials from DGXXIII on full pay! A month after these suspensions (April
1994), the European Parliament adopted a critical report on fraud in the
EYT programme (The Holzfuss Report) despite objections from the Socialist
Six months after publication of this Report (October 1994), the
Commission “retired” the
DG XXIII responsible on grounds of “ill health” with full pay, pension
and with his reputation untarnished! The Belgian Police, called in by
McMillan-Scott in 1995, are still investigating some of those involved in
In March 1995, the EP appointed Rosemarie Wemheuer- a German MEP
and the PES spokeswoman on EP’s Budgetary Controls Committee - to report
on the fraud allegations and the cover-up in the EYT programme. Her
Report, overwhelmingly approved by MEPs, confirmed McMillan-Scott’s
In December 1996, the Second Report on this matter was published by
the Court of Auditors. Quite amazingly, it failed to identify the extent
of fraud and those responsible despite the findings of McMillan-Scott and
Rosemarie’s Report approved by the EP!
In March 1998, the EP postponed the vote on the Commission’s 1996
Annual Accounts. It demanded from the Commission a response to allegations
of fraud with respect to the EYT programme.
In July 1998, eight years after the matter was first raised by
McMillan-Scott, the Commission produced a report on the Tourism Unit
confirming that at least £3.75million had gone astray!
Soon after this (October 1998), James Elles, the Conservative MEP,
persuaded the EP to pass a resolution calling for the creation of an
independent Fraud Prevention Unit – a measure strongly opposed by the
Early in 1998 UCLAF revealed that some £600 million of the
humanitarian aid budget between 1993 and 1995 could not be accounted for.
Nobody can tell us how this money was spent. None of the Commissioners
have been held responsible or prosecuted!
Commissioner Mr.Manuel Marin, responsible for the MED programme of
aid to Mediterranean countries, tolerated irregularities in expenditure of
millions of pounds in situations where there was conflict of interest,
over-invoicing and absence of supporting documents.
Commissioner Cresson, responsible for the LEONARDO programme,
failed to act in response to known and continuing serious irregularities
over several years. By October 1998, even the French press was reporting
on cronyism in her education and training department.
On the basis of what is known, six Commissioners out of 20 - 30% of
the team - have been found to
be responsible for mismanagement in recent times. Jacques Santer, the
President, failed to take appropriate action to stop such bad practices.
It was the honour and courage of Paul Van Buitenen - a Commission
official & a member of the audit team on EYT - that finally revealed
the cover-up of widespread fraud and financial mismanagement in the
Commission. Sadly, he was
suspended on half pay – think about it: suspended on half pay for
telling the truth whilst others were given severance allowance and
generous pensions for fraud and mismanagement!
Conservative MEPs called for the resignation of all those
Commissioners responsible for mismanagement. The Labour MEPs, led by
Pauline Green, opposed such a move. Eventually, the EP passed a motion in
January 1999 to appoint a Committee of Independent Experts to investigate.
This Committee’s report was published on 15thMarch,
1999. The Report identified specific Commissioners responsible for gross
mismanagement. Conservative MEPs called for the President and all 20
Commissioners to resign and they did so a few hours later!
A lot of money – money paid by taxpayers and citizens of Europe -
has disappeared. Crucial documents have been altered, destroyed or
removed. Those responsible have either been pensioned off or will retire
with generous settlements! Article 160 of the EU Treaties authorises the
Council of Ministers to demand that the European Court of Justice
prosecute individual Commissioners guilty of misconduct. Sadly, I have not
heard of any such move!
The EU budget is about £60 billion. Annual accounts of the EU
remain uncertified for years. For instance, in November 1995, the Court of
Auditors refused to certify the EU’s annual accounts after discovering
that almost £3 billion – 5% of the EU budget – could not be accounted
for! No Government of a member state would tolerate such irresponsible
conduct. No public or private company would allow its Board of Directors
to stay in office.
Commissioners and their cronies who have been identified as
responsible for misconduct are the faceless men of Brussels; living in
their ivory towers; appointed not elected; invading our lives; answerable
to none and paid for by us! They do not give us value for money! They
enjoy high tax-free salaries, huge expense accounts, diplomatic immunity
and duty free allowances that are not even offered to our Prime Minister!
Why should we pay such outrageous amounts to these incompetent
Eurocats when there are thousands of experienced professional people in
Britain, and across Europe, who are eager to serve on terms of employment
comparable to those in their own countries?
Of the 6292 Eurocats in the top “A” Class, 12.7% are French
compared to only 9.3% British although the two countries have the same
populations. There are almost as many Belgians (9.1%) in the top “A”
Grade as British although Belgium’s population is much smaller than
The wine & dine fraternity of 18000 employed by the EU, enjoy
jobs virtually for life with salaries as much as double those offered to
the counterparts in their own countries. They pay a special low rate of
tax and have a quasi-diplomatic status that gives them immunity from
prosecution for any crime they may commit during their work. Despite all
these extra benefits, they have not performed as well as British Civil
Servants; many of these Eurocats are guilty of mismanagement and some of
Clearly, we must stop these Eurocats from wasting public funds! We
must stop them from receiving perks they do not deserve. We must hold them
accountable for what they do and how they spend our money – taxpayers
The principle of openness, transparency and accountability are at
the heart of democracy and are the very instruments allowing it to
function properly. Openness and transparency imply that the decision
making process, at all levels, is “visible” to the general public.
It means that the reasons for decisions taken, or not taken, are
known. Those taking decisions should assume legal responsibility for them.
They should be ready to accept the personal consequences when such
decisions are subsequently shown to be wrong.
Tenders for supply of goods and services should be open and
transparent such that any bidder is in a position to know why his bid was
not accepted in favour of another.
To this day the relationship between the Commissioners and the
Director Generals (DG) do not meet these standards. The Commissioner’s
political role and the Director General’s administrative role have led
to divided responsibility. This has not worked. Abolishing the role of DG
and introducing the role of Assistant Commissioner will require them to
share common responsibility for efficient management and elimination of
fraud. They will be expected to liase with each other and with the
regulatory bodies of the EU.
I propose the following action plan to reform the European
Commission and its relationship with the European Parliament:-
Establish a new Employment Contract for the European Commission
based on fixed term contracts; clearly defined rules on recruitment, pay
scales, mobility between departments and promotion. There should be
detailed specification of job requirements including personal
responsibility for fraud & mismanagement plus an obligation to declare
financial interests. These conditions would apply to all employees from
Commissioner to the most junior rank.
The European Parliament should be empowered to approve, by a simple
majority, the appointments of individual Commissioners and Assistant
The European Parliament should be empowered to dismiss, by 2/3rd
majority, any individual Commissioner or Assistant Commissioner for proven
Establish an independent Fraud Prevention Office (FPO), located
outside the EU institutions, with power to investigate any matter relating
to fraud & mismanagement in any EU institution. It would have power to
summon anyone and examine any document. All its findings would be made
public in each member state to ensure that it is widely known in Europe.
The Commission’s power to initiate and propose legislation must
be withdrawn. This responsibility must be transferred to the directly
elected European Parliament so that it proposes the legislation necessary
to meet the requirements of the citizens of Europe. The Commission should
act, like the British Civil Service, and respond by drafting legislation
requested and required by the EP. This measure will correct the democratic
deficit that exists at present and reduce the workload on the Commission
as only essential legislation will be considered and processed.
We must reform the European Commission to restore the confidence of
the citizens of Europe. Commissioners and their staff should be seen to
work in the interest of the EU and its people. The directly elected
European Parliament should establish its authority over the Commission to
ensure that there is accountability and transparency at the heart of