Eurostat scandal
Encyclopedia
In 2000, internal auditors raised concerns about fictitious Eurostat
's contracts with outside companies and referred the matter to the European Anti-Fraud Office, OLAF
. OLAF did not react.
In 2001, Paul Van Buitenen, whose earlier report had indirectly led to the resignation of the previous Santer Commission
, produced a second report, but this at first led to no action, until Hans-Martin Tillack
and the press started to take interest in the matter. Questions were asked in the European Parliament
, OLAF produced a new report entitled "A vast enterprise for looting community funds" as it was reported by Financial Times
on May 16, 2003.
Finally the Prodi Commission acted. Three senior Eurostat officials were removed from their posts and a number of contracts with outside companies were cancelled.
It was alleged that, at least during the 1990s, Eurostat used a double accounting system to transfer large amounts of money to secret bank account
s not monitored by auditors and that the value of some contracts was inflated. Allegedly there was evidence of cronyism
and financial irregularities, though no evidence of personal enrichment was found. Between four and five million euros
was thought to have been "siphoned off", mostly between 1996 and 2001. Some of the money was recovered.
On July 8, 2008 the European Commission was condemned by the European Court of Justice
for several failures of OLAF.
The Commission had to pay €56,000 to two senior Eurostat officials.
Eurostat
Eurostat is a Directorate-General of the European Commission located in Luxembourg. Its main responsibilities are to provide the European Union with statistical information at European level and to promote the integration of statistical methods across the Member States of the European Union,...
's contracts with outside companies and referred the matter to the European Anti-Fraud Office, OLAF
OLAF
The European Anti-fraud Office is charged by the European Union with protecting the financial interests of the European Union: Its tasks are to fight fraud affecting the EU budget, as well as corruption and any other irregular activity, including misconduct, within the European Institutions, in an...
. OLAF did not react.
In 2001, Paul Van Buitenen, whose earlier report had indirectly led to the resignation of the previous Santer Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
, produced a second report, but this at first led to no action, until Hans-Martin Tillack
Hans-Martin Tillack
Hans-Martin Tillack is a German reporter. Born 1961 in Königs Wusterhausen near Berlin, he grew up in Stuttgart.He studied politology and sociology in Marburg and Berlin, worked for five years as reporter for taz before coming to Stern in 1993 – first in Bonn, from 1999 to 2004 in Brussels, today...
and the press started to take interest in the matter. Questions were asked in the European Parliament
European Parliament
The European Parliament is the directly elected parliamentary institution of the European Union . Together with the Council of the European Union and the Commission, it exercises the legislative function of the EU and it has been described as one of the most powerful legislatures in the world...
, OLAF produced a new report entitled "A vast enterprise for looting community funds" as it was reported by Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
on May 16, 2003.
Finally the Prodi Commission acted. Three senior Eurostat officials were removed from their posts and a number of contracts with outside companies were cancelled.
It was alleged that, at least during the 1990s, Eurostat used a double accounting system to transfer large amounts of money to secret bank account
Bank account
A Bank account is a financial account recording the financial transactions between the customer and the bank and the resulting financial position of the customer with the bank .-Account types:...
s not monitored by auditors and that the value of some contracts was inflated. Allegedly there was evidence of cronyism
Cronyism
Cronyism is partiality to long-standing friends, especially by appointing them to positions of authority, regardless of their qualifications. Hence, cronyism is contrary in practice and principle to meritocracy....
and financial irregularities, though no evidence of personal enrichment was found. Between four and five million euros
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
was thought to have been "siphoned off", mostly between 1996 and 2001. Some of the money was recovered.
On July 8, 2008 the European Commission was condemned by the European Court of Justice
European Court of Justice
The Court can sit in plenary session, as a Grand Chamber of 13 judges, or in chambers of three or five judges. Plenary sitting are now very rare, and the court mostly sits in chambers of three or five judges...
for several failures of OLAF.
The Commission had to pay €56,000 to two senior Eurostat officials.
See also
- Accountability in the European UnionAccountability in the European UnionAs with all public budgets, the EU's budget is also at risk of maladministration. Every year, the Court of Auditors reports on the management of the budget...
- « Eurostat : une « affaire » peut en cacher une autre », L'Expansion, 20 janvier 2004
- "De analyse van de Eurostat fraude", KUL 2005, Bayens Godelieve, in dutch language