Brussels, 23/03/2001 (Agence Europe) - The "Fléchard" affair concerning the way the European Commission dealt, between 1991 and 1994, with a fraudulent operation in the export of subsidized butter, again returned to front stage, Tuesday and Wednesday, at a hearing of five Commissioners organised by the Parliamentary Committee on Budget Control (Cocobu) in the framework of the follow-up to the discharge for the 1998 financial year (report by German Christian-Democrat, Gabriele Stauner). The conclusions that Cocobu may draw will be taken into account, in the form of amendments, in the report by the Danish Socialist Freddy Blak for the 1999 discharge. The MEPs responsible for the "Fléchard" issue (Freddy Blak, Herbert Bosch, Jan Mulder and Gabriele Stauner) did their best, without for that indulging in personal attacks, to place the Prodi Commission in an awkward position in relation to the Delors Commission, which was in place at the time of the facts, and to secure guarantees that such an affair could not happen again.
In his answer to Mr. Blak MEP, the former German Commissioner for the Budget, Peter Schmidhuber, justified why he had not, at the time, deemed it necessary to further the enquiries into suspicions of fraud. He said that he had accepted the decision of the financial controller to reduce from 17.6 million to 3 million euro the amount seized as provision laid down by Fléchard for the delivery of 6,750 tonnes of intervention butter. This decision, which ended the legal procedure, was based on the fact that the butter in question had not returned to the Community market. "I had not to interfere with the work of the financial controller, who acts independently", he said.
Rene Steichen, former Luxembourg commissioner for Agriculture, denied having been under pressure in this affair, but remembered French approaches (by the Minister of the Budget, Nicolas Sarkozy and the company Fléchard) to Jacques Delors' cabinet to defend the company's interests. "But it was nothing exceptional, as, at the time, there were many requests that landed on the desk of the President's Cabinet", he said. On 21 December 1993, Mr. Schmidhuber had written to his colleague Steichen that any settlement of the affair presupposed that first it be established to what extent the company Fléchard was involved in the misappropriation of the deliveries. Mr. Steichen replied that this note had remained unanswered from the time the financial controller had opted for the solution in favour of Fléchard, at the meeting of 7 January.
While acknowledging that, retrospectively, investigations into fraud should have been pursued, Commissioner Pascal Lamy said that "for lack of facts that could have demonstrated Fléchard's intention of engaging in fraudulent activity", it was justified "to take back everything that corresponded to undue profit (1 million euro) as well as the commercial margin of 2 million euro gained from this operation" (difference between the refunds for Russia, planned destination, and Poland, where the deliveries were made: Ed.) And the Commissioner acknowledged that it had been a "question of appreciation" and that "the context of how the Fléchard affair was dealt with may be criticised". Concerning the disappearance of the minutes of the meeting of 7 January 1994, the Commissioners questioned said that there had been no reason to doubt the drawing up of these written conclusions. The officials from the Directorates General present at the meeting "a no jokers" declared Pascal Lamy, in answer to a question from Gabriele Stauner.
Franz Fischler, who had not been a "direct witness", recognised that there was no "alternative or complementary information to provide" and that he rallied around the Commission's position. He simply set out the changes and improvements made to the procedure for controlling agricultural spending, as soon as he took office in 1995 (at that date, the former section to combat fraud and recover undue payments was part of the Agri DG was transferred to UCLAF): separation between budgetary issues and those of budget control within DG VI, "decentralisation of control mechanisms so that the authorizing officer is also responsible for the financial implication of decisions" (ex ante control) and more account taken of the principle of proportionality regarding account clearance by combining the two principles "of dealing on a case by case basis and the respect of internal guidelines".
Michaele Schreyer provided certain details on the Commission's refusal of freeing officials and former officials of their duty of discretion. She recalled that the lifting of the obligation of confidence, imposed on all members of the Commission, could only be requested in "exceptional situations" during a proceeding before the courts. Ms. Schereyer recalled that a Green paper would be published, by the end of the year, on the European prosecutor who would be responsible for defending the Community's financial interests.
The Blak and Stauner reports will be adopted at the meeting of the Cocobu on 26 and 27 March.