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Moment the facade starts to crumble

The Daily Telegraph: February 8, 2002

Little has changed since charges of fraud, mass resignations and Kinnock's promise of radical reform, writes Ambrose Evans-Pritchard in Brussels

Neil Kinnock has had three years to deliver on promises of "root-and-branch" reform in Brussels and to get a grip on the £62 billion of taxpayers' money that passes through European Union hands.

But yesterday it appeared that little had changed since the disgrace and mass resignation of the Santer Commission on charges of fraud, mismanagement and misuse of the security service for dirty tricks against whistle-blowers.

A withering report by the EU's most powerful watchdog, the Court of Auditors, excoriated the current commission for clinging to eccentric bookkeeping and a defective computer system that created "obvious risks" for the diversion of money.

"No account has been taken of generally accepted accounting standards," said the leaked draft. "Failures abound and are a waste of public funds. [It is impossible to put a figure on the amount involved.] The commission has been warned about them, but to date has not taken any remedial action."

There is no allegation of fraud. No official is being accused of dipping into the cookie jar. This is not a repeat of Edith Cresson, steering fictitious contracts to her live-in male "dentist".

The report merely hints that crooks could exploit the system to shift money without leaving an electronic fingerprint, a suggestion denied yesterday by the commission.

But after such a verdict, Mr Kinnock must regret pledging to make the EU's bureaucracy so squeaky clean that British Euro-sceptics would no longer have their favourite political football to kick around. Plainly, his new-fangled "Activity Based Management", imported from America, has yet to gain traction.

He may also regret a two-month campaign of vilification against Marta Andreasen, his chief accountant, after she refused to sign off the Commission's books, deeming them "out of control".

Since May she has been sacked from her post, hauled up on disciplinary charges for "defamation" and smeared in a well-crafted whispering campaign .

Just last week he told the Brussels press corps that Mrs Andreasen's claims were "so far unsubstantiated". He insisted that "Mrs Andreasen has been the object of entirely fair procedures". She begs to differ after having been harassed by goons in Brussels.

"Every time I left the building, they followed me," she said yesterday. "There were usually two of them, one just in front and one behind, and they made it so obvious that I assumed it was meant to be intimidation. Maybe they wanted to stop me meeting anybody."

The allegations are devastating; far worse than the dispute itself over the budget. They also have the ring of truth.

Bernard Connolly, a British economist, suffered similar treatment when he blew the whistle on abuses in the 1990s. He said his house was staked out by men at night whenever he was away, clearly in an attempt to frighten his wife.

The campaign against Mrs Andreasen fits into a pattern of harassment in recent months against whistle-blowers alleging misconduct in EU institutions or against the officials defying pressure to compromise their work.

A Danish civil servant working for Eurostat, the EU's statistical office, said she was removed from her post this March after trying to stop fraudulent contracts being awarded to outside consulting companies. The case has prompted a criminal inquiry by the anti-fraud office, Olaf.

Earlier this summer the director-general in charge of fisheries, Steffen Smidt, was summarily fired on orders of the Spanish government as a punishment for trying to save Europe's declining stocks from catastrophic over-fishing, much of it by Spanish vessels.

The move was a breach of EU treaty law. But what most irked Euro-MPs was the way that the commission hierarchy tried to cover up the deed by presenting it as part of long-term reshuffle.

The Danish reformer Jens Peter Bonde said it was scandalous. "Kinnock's people put out an orchestrated lie, and that is something that can never be tolerated," he said.

A time-bomb waiting to go off is Paul Van Buitenen, the whistle-blower who brought down the Santer Commission. In August he submitted a fresh 234-page report, backed by 5,000 pages of documents, alleging that fraud was still endemic.

The secret dossier claimed that the old cases had been swept under the carpet, while corrupt officials were still at their posts.

Mr Van Buitenen has kept silent so far, agreeing to give the commission more time to respond, but he is now said by close friends to be deeply disillusioned.

For three years Mr Kinnock has enjoyed the benefit of the doubt on his reforms. The Andreasen affair has almost certainly put an end to that.

Euro-MPs already sniff a hint of fin de regime in the air - the moment when the facade starts to crumble.

Chris Heaton-Harris, a Tory MEP on the budget committee, said the European Parliament was now going to flex its muscles. "This Commission hasn't learned anything in the past three years, except how to do cover-ups," he said.

"There's very old practices being used and no one's really interested in change."

The report now provided "first-hand ammunition" to tackle the "malaise" in the commission.