Prodi under the spotlight over Eurostat scandal

Link: EC rocked by fraud claims

He will fear anger from EP budgetary control committee members should a report, from the commission’s internal audit service into the award of contracts and grants by the European Union statistical agency from 1999 to 2002, be damning.

Its release coincides with the publication of another paper, by a specialBrussels taskforce, into other personal responsibilities of Eurostat staff involved with any financial irregularities.

The key problem will be whether either report suggests similar budget rule-breaking has taken place elsewhere in the commission, especially since Germany’s Stern magazine has reported that EU anti-fraud office OLAF is investigating such allegations at the European publications office in Luxembourg.

Prodi will appear before a closed extraordinary meeting of the parliament’sparty leaders, to which budgetary affairs committee members have been invited.

The scandal is particularly damaging given that his commission swept into office promising ‘zero-tolerance’ against corruption, fraud and mismanagement, following the disastrous tenure of predecessor Jacques Santer.

If MEPs feel he also has dozed on his watch, while Eurostat officials allegedly submitted fake contract cost estimates and then spent the excess cash as they wished, he will get a rough ride.

Parliamentarians will not have been sweetened by a letter from the lawyersof suspended Eurostat director Yves Franchet, which claimed he never concealed information from the commission’s central secretariats.

The letter said he sent all Eurostat internal audit reports since February2000 to Brussels, and had not received comments even though these documentswere subsequently used to substantiate the fraud allegations.

This followed a meeting earlier this month where the EP budgetary committee recommended freezing 50% of Eurostat’s operational funds and one quarter of its administrative funds (? ¬21.3m and ? ¬2.93m) until the commission has ‘clarified andimproved its internal communication lines enabling senior management officials and commissioners to take prompt and efficient action to tackle irregularities and assume their respective responsibility’.

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