Fraud cannot be tackled by OLAF alone, commissioner says
VALENTINA POP
20.11.2008 @ 18:05 CET
EUOBSERVER / STRASBOURG – Member states need to assume more responsibility in correctly managing EU funds and follow up what happens in the national courts to the fraud cases investigated by the block's antifraud office (OLAF), commissioner Siim Kallas has told EUobserver.
With both the Court of Auditors and OLAF identifying structural funds - in which "member states decide who gets the money", he says - as those that are the most prone to irregularities and fraud, audit reporting from national governments is a necessary step to increase countries' responsibility in regards to EU funds, Mr Kallas said.
Commissioner Siim Kallas says OLAF's institutional arrangement is "schizophrenic" (Photo: European Commission)
He was speaking ahead of a debate in the European Parliament in Strasbourg on Thursday (20 November) on the latest Court of Auditors report, where MEPs also called on member states to be "named and shamed" for the errors and fraud with EU funds.
Asked why only a few OLAF cases were followed up by the national judiciaries, Mr Kallas replied: "The priorities of national judiciaries are very different from the priority of handling European money."
"The European Parliament, the commission and the Council are all asking for vigorous action. But these actions are the competence of national judiciaries, which have enormous workloads," he explained.
He also mentioned "national sensitivities" of the member states' judicial systems when it comes to outside investigations, exemplifying his home country, Estonia, as rather reluctant to the European arrest warrant before becoming an EU member state in 2004.
The anti-fraud commissioner also asked for "more reporting from the member states on what is happening to the cases."
"We know the cases went to court, but sometimes it is unclear when they are taken in the process and what sentence is pronounced," he added.
According to OLAF's activity reports, between 200 and 300 investigations are opened each year, yet the judicial follow-up is much lower. In 2007, there were only 67 verdicts delivered in cases based on OLAF investigations, out of which 24 were imprisonments, 19 financial penalties, 18 suspended sentences and five fines.
German MEP Ingeborg Grassle, responsible for shepherding through parliament a new regulation meant to strengthen OLAF's independence and adopted on Thursday by the full sitting of the chamber, told the EUobserver that her proposal foresaw stronger co-operation with member states precisely in order to tackle this problem.
"We have member states that have never had a single OLAF case followed up in their justice system, such as Luxembourg. And there are 10,000 EU staff working there. Of course there were cases, but they were simply never followed up by the national authorities.
"It's inadmissible," she said. "When you are an EU staff member in Luxembourg and are involved in a fraud case, you can be sure that nothing will happen."
She also spoke of the need to expand the admissibility of evidence collected by OLAF in national courts by more consultation with member states.
"As soon as EU money is in play, national courts don't want to deal with it, because they think it's complicated and it takes time," she said.
OLAF 'schizophrenic'
Speaking during the plenary sitting of the parliament, Mr Kallas called the current OLAF institutional arrangement "a schizophrenic situation" - being both a commission directorate general and an independent investigative body, but with the commission bearing responsibility for it.
He said the commission was asked by the upcoming Czech EU presidency to draft a working paper on the institutional arrangements of OLAF that could be put forward in early 2009.
There were two options – to keep OLAF as part of the commission or to make it an entirely independent body – Mr Kallas said.
He disagreed with several proposals of the draft bill, for instance for the OLAF director general to have the right of intervention with EU and national courts. This was not legally possible, as long as the OLAF chief was also still included in the commission's hierarchy as a director general, Mr Kallas argued.
The future of the draft bill, based on only one of the three regulations that lay the groundwork for OLAF, was seen as uncertain even by the MEP responsible for taking the bill through parliament, with EU leaders calling rather for a "consolidated proposal" based on all three existing bills.
Austrian Socialist MEP Herbert Bosch, chair of the budgetary control committee, noted that no representatives of the EU presidency were present and called on member states to support the transformation of OLAF from a "temporary body," into a fully independent one.
His calls were echoed by Hungarian MEP Antonio de Blasio, who also noted: "Since the creation of an EU public prosecutor office" was postponed due to the rejection of the Lisbon Treaty in the Irish referendum, the only way to effectively fight fraud and corruption was to bolster OLAF and its investigative capacity.