EC to set up new fraud unit

The European Commission is planning to establish a new independent fraud unit for all European institutions, which could triple the existing numbers of investigators working on financial control, Accountancy Age has learned.

In a speech on Monday night, president of the EC Jacques Santer recognised the inability of the present anti-fraud body (UCLAF) to combat fraud committed by European officials, and confirmed he would support a proposal from German chancellor Gerhard Shroeder for a new unit.

Santer told the European Parliament: ‘I welcome the suggestion to build a top-level group with representatives of the European Parliament, the council and the commission to examine the suggestion … and research an agreement before the end of March.’

Santer did not go into detail, but Accountancy Age understands that the unit will be called OLAF (Organisation Lutte Anti-Fraude) and staffed with up to 600 people.

Independent of the commission, OLAF will monitor all of the European institutions including the parliament, council and commission itself.

The move aimed to pre-empt today’s censure motion over assistant internal auditor Paul van Buitenen’s revelations of widespread fraud. The motion could result in Santer’s administration being sacked.

In a letter to MEPs, written on 9 December, van Buitenen said: ‘I have been in a privileged position to witness the incompetence and unwillingness of the commission administration to deal efficiently with fraud and irregularities, despite the persistence of my colleagues.’

Leader of the Conservative MEPs Edward McMillan-Scott said he had met with van Buitenen. He said: ‘I found him an honest man and hope that any new unit would be staffed with people like him.’

Julian Paleson, head of the English ICA’s EU unit, said: ‘We are talking about hundreds of millions of pounds, but the commission has been behaving like the Red Cross.’

Jacques Santer’s spokesman Martine Reicherts said the new unit could become a reality by June or July this year.

Leader, page 14.

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