Brussels, 09/07/2003 (Agence Europe) - On Wednesday, even before the imminent results of the investigation by the European Commission fraud squad are made known, the Commission decided to take a number or drastic measures in an attempt to deal with repeated cases of fraud committed at Eurostat, possibly over many years. The Commission believes that it has sufficient proof, after reading two internal reports (an analysis by DG Budget and provisional report by the Internal Audit Capability of Eurostat, for deciding on disciplinary proceedings against three senior officials at Eurostat (the Director General, A1 grade official Yves Franchet and two of the five of the latter's deputies, including Daniel Byk from France and the suspension of contracts with the French company, Planistat.
According to a communication from Commissioner Neil Kinnock, initial conclusions from the two internal reports reveal that, "a number of serious breaches of the Financial Regulation have taken place and that the follow-up to several significant aspects of internal audit reports has not shown the necessary breadth and thoroughness or led to essential action" and that serious wrongdoings on a much wider scale that imagined had taken place. This communication was discussed and adopted by the College. The Commission is not at this stage saying how much money the officials accused, had pocketed but did say that the relatively frequent practices at Eurostat resulted in irregular reserves of money, the use of which was done through "parallel accounts". Information would suggest that certain appeals to tender were fabricated (which appears to be the case for the contract signed with Planistat ad that there were many crossed subsidies. It is on this basis that the Commission has also decided to:
- transfer a number of Eurostat senior official (they will be given advisory positions);
- confirm the appointment of Michel Vanden Abeele to the post of Eurostat Director General (the latter had been called on to temporarily replace Mr Franchet, who will be definitively relieved of his functions as Director General for translations). Mr Vanden Abeele will act under the direct authority of Commissioner Pedro Solbes with a task of implementing necessary reforms in order to bring to an end all possible management weaknesses and irregularities;
- decide before the end of the month if contracts with other companies should be suspended;
- set up a multidisciplinary Commission Task Force to take rapidly forward the internal and external sides of the enquiries currently managed by OLAF alone. The Task Force will also carry out a full-scale administrative enquiry aimed at assessing the personal responsibilities of other staff involved with any financial irregularities.
- make the Eurostat archives secure.
As indicated in EUROPE yesterday, the Commission has taken not of the synthesis of the annual activities reports for 2002 from all the Directors General and has approved a series of measures for improving internal communication (a weak point in the context of investigations into Eurostat). In particular, reinforced measures are taken on the obligation for Directors-General to discuss with their Commissioner at least twice a year the state of internal control and internal audits in their service. Furthermore, it will be compulsory for the Directors-General to inform their Commissioners on any elements that are sent by their Directorate to OLAF. In order to improve the co-operation between OLAF and the Commission, and to allow the Commission to take early decisive action whenever necessary, a Code of Conduct on information flows between OLAF and the Commission will be drawn up before 23 July 2003. The Commission has approved the creation of an internal Financial Irregularities Panel, which will assess potential breaches of the Financial Regulation as a result of an omission by a member of staff.
Romano Prodi said that although the Commission was: "patiently waiting for the outcome of different on-going investigations…our own analyses now provide us with the basis to act and for the process to be accelerated. We are taking drastic measures today and they will hurt but they're indispensable. Whatever has happened in the past will be dealt with and the functioning of EUROSTAT brought in line with the rules and principles this Commission has sworn to apply," warned Mr Prodi.
In reply to journalists who asked him why the Commission had not taken action before the leaks appeared in the press last May, Mr Kinnock declared that, "if the Commission had already had sufficient proof, it would have enabled it to act and justify such measures. It would have never ignore this information in the hope that nothing would have come out and the problem would have gone away. Following rumours in the press, the Commission had decided to take certain measures on 21 May (transfer at their request of the two senior officials from Eurostat to other positions and the launch of an investigation by DG Budget). This was followed on 11 June by the Commission requesting the internal audit services to examine Eurostat contracts.
Relative satisfaction expressed by Pat Cox and Diemut Theato,
who wonder why it took so long
"I have a feeling of 'déjà vu'", President Pat Cox told the press after the discussion by the Conference of Presidents on measures taken by the Commission in the Eurostat affair. "It is disappointing that we again find ourselves in this situation four years after the Santer Commission resigned", he added. At the present time, "it is not yet known where some funds are", Mr Cox deplored. The EP president also acknowledged the "frankness shown by the Commission" and notes the "comprehensive nature of its action after the discovery of different evidence". However, he insists, one should know why it took so long. This is one of the questions to be raised by the Cocobu next week.
The Commission is responsible for gaps like the "lack of communication between services", Diemut Theato, Chair of the Committee on Budgetary Control, told the press. He noted that the Commission then reacted in just a few days, which shows that something is possible, he said.
One must respect the presumption of innocence and let justice take its course, Pat Cox also said. He was invited to compare the current situation with that which had resulted in the resignation of the Santer Commission. Mr Cox noted that the previous Commission had ended in resignation mainly because it had lacked transparency regarding the Parliament, while Prod's Commission reacted with praiseworthy vigour after having received evidence that things were not as they should be.