Overview: EU expenses

It was, in a sense, a story that could shock no-one. Members of the European
Parliament are alleged to be abusing their expenses. Tell us something we don’t
But the row could cause bigger shockwaves than you imagine and herald change in
the corridors of Brussels and Strasbourg.

What’s happened…

An EU parliament internal audit report has raised serious concerns about
MEPs’ staff payments. Whistleblower Chris Davies, a Liberal Democrat MEP, has
seen the report due to his membership of the Budget control committee of the EU.

He claims it shows widespread abuse of taxpayers’ money ­ revealing that less
than 30% of MEPs’ staff expenses are fully backed up. Each of the 785 MEPs is
allowed up to £125,000 a year for staff expenses ­ so almost £70m could be being
paid out without proper supporting documents.

Shocking? Well, it was to Brian Gray, the EC’s chief accountant. The issue is
not under his control, and he hasn’t seen the report, he says, but it is still a
worrying issue for the EU as a whole, he argues.

‘Parliamentarians I work for have a large staff, who do good reports. It’s
shocking if [other] MEPs are trying to profit from the regime. There are some
parliamentarians who don’t seem to have great moral belief,’ he said.

Most MEPs use a ‘service provider’ to handle cash for staff, which some argue
makes it easy to defraud the system. It is believed the report suggests seven
MEPs had set up companies to pay staff who apparently did not exist. Others
employ unqualified family members or pay the whole allowance to one person each
month. The MEPs in question are not named.

What’s next…

Whether the report’s precise contents will ever be revealed remains to be
seen. But OLAF, the EU’s anti-fraud body, did eventually receive a copy and has
launched an investigation. Chris Davies has said he hopes to see MEPs exposed
for defrauding Parliament and sent to prison.

In the meantime a long-standing proposal to ‘simplify’ payments to MEPs’
staff is to be brought forward to start after the next elections in June 2009.
This involves a new central recruitment system. In addition, salary disparities
between MEPs of different countries will be eliminated and MEPs will no longer
be allowed to claim expenses without proper receipts.

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