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New threat by official who told of EU fraud

The Daily Telegraph: February 27, 2002
By Ambrose Evans-Pritchard in Brussels

THE European Commission faces a corruption scandal after a leading whistleblower threatened a showdown by the weekend unless action is taken to root out fraud in Brussels.

Paul van Buitenen, the Dutch official who forced the mass resignation of the commission led by Jacques Santer three years ago, told Euro-MPs that he would speak out unless Neil Kinnock, the commissioner in charge of administrative reform, responded seriously to a 235-page dossier of corruption allegations he submitted last August.

The dossier, backed by 5,000 pages of documents, is becoming a test of whether anything has changed in Brussels since the exposure in 1999 of rampant mismanagement, nepotism and fraud by senior commissioners and their 20,000 fonctionnaires.

Mr Kinnock has promised "root-and-branch" reform and a new anti-fraud office, Olaf, was set up.

But the European Parliament's anti-fraud rapporteur, the German MEP Gabriel Stauner, told the Telegraph yesterday that the climate was already reverting back to the bad old days.

She said: "I am getting really angry. The commission have lied to me about this case and I have the strong impression that they're trying to hide everything again."

A similar clash between the European Parliament and the commission over Mr van Buitenen's findings in 1999 led to an inquiry by a panel of independent experts and set in motion the downfall of the Santer commission.

The panel endorsed allegations of endemic graft in the aid and education programmes, and confirmed the use of fictitious research contracts by the French commissioner Edith Cresson.

Mr Kinnock's office said every allegation in Mr van Buitenen's latest dossier was being thoroughly examined. One official said: "We're bending over backwards to investigate all these claims, but there's due process to be followed."

Seven Olaf investigators have been working full-time on the material and have just completed their report. No details have been released.

European Union sources say the files point to a cover-up by the commission to protect officials guilty of past misconduct, as well as alleged fraud in construction contracts at EU sites in Luxembourg and misuse of vocational training funds.

Mr van Buitenen, now a mid-ranking official in Luxembourg, is reported to be dismayed that officials linked to malpractice or worse have been rotated to new jobs without loss of pay or privileges.

Sources say he is highly sceptical of the Kinnock reforms, arguing that the old staff rules provided the essential tools needed to combat corruption, but they were not enforced properly.

Chris Heaton-Harris, a Tory MEP in charge of scrutinising Olaf in the European Parliament, says the new anti-fraud office has been used as a dumping ground for compromised officials and is staffed at the top level by people accused of turning a blind eye to allegations in the 1990s.

"It's supposed to be totally independent but obviously isn't. So far it has handled 92 cases where there was evidence of criminal activity, but has only pursued a prosecution in two of the cases," he said.