The Hindu : Commission widens Eurostat scandal investigation

Online edition of India's National Newspaper
Friday, Jul 18, 2003

International

International

Commission widens Eurostat scandal investigation

By Batuk Gathani

BRUSSELS JULY 17. As the European Commission, under the authority of its Vice-President and Administration Commissioner, Neil Kinnock, today widened the fraud probe, the European Union is much concerned over the so-called " Eurostat affair" in which millions of euros had just `disappeared ' in secret bank accounts in private banks in Luxembourg.

The accounts were operated by senior European bureaucrats working for the Eurostat or European Statistical department. Such secret bank accounts were set up by the European Commission officials to hold money paid through inflated contracts to sub-contractors for supplying or in some cases even not supplying European statistical data to private firms.

It is even alleged that many contracts "never even materialised." The payments were stashed away in secret bank accounts. There is much speculation about the sum involved but "it certainly runs into millions of euros", according to informed observers. The European Commission investigators and officials are stunned by the fraud which has gone undetected for about three years, although there was a feeling in some quarters that "something was wrong" with the Eurostat office. A widespread inquiry into secret bank accounts and fictitious contracts was launched on Wednesday amid much speculation about the scope and scale of the alleged fraud.

The incident has evoked grim memories of the dark days of Jacques Santer, former President of the European Commission, when a financial scandal led to the collapse of his regime in 1999. Mr. Santer was toppled from power amid allegations of financial misconduct by one of his commissioners.

The current moves by the European Commission also reflects underlying fears that the "vast enterprise of looting" that fraud investigators found at the office of Eurostat, the European Commission's statistical arm, may also have occurred in other departments of the Commission. Members of the European Parliament last night expressed their concern about the issues of "credibility and honesty" and called on Romano Prodi, the current President of the European Commission, to give an explanation.

Some European Parliamentarians accused Mr. Kinnock and Petro Solbis, the Commissioner in charge of Eurostat of failing to heed several previous warnings about the wrongdoings and some asked for the resignation of Mr. Solbis.

The internal audit identified some problems in 1997 but no action was taken by the senior E.U. officials concerned.

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