Press Release

19/03/99: Euro-fraud since 1990: The anatomy of a cover-up

Today (Fri - 19/3), Leader of Conservative Euro-MPs Edward McMillan-Scott (Yorks) re-tabled Parliamentary questions about national fiefdoms in the European Commission after receiving assurances that they would now be answered fully.

"It has long been known that a national flag flies over many European Commission jobs. When I tried to find out six years ago what was going on, I was given a brush off. Last week, I was assured by the same EU Commissioner that I would now get a full reply", explained McMillan- Scott, who has sought to expose fraud and corruption in Brussels since 1990.

In 1993, McMillan-Scott asked the Commission to give a breakdown by nationality of the number of EU officials occupying senior grades. EU Commissioner Karel van Miert replied: 'Under the staff regulations of Officials of the EC, promotion decisions are based on a comparative examination of the merits of eligible officials and of the staff reports on them. Nationality is never an eligibity criticism, and the Commission has no statistics on the nationality breakdown of promotion decisions.'

McMillan-Scott stated: "According to evidence given to MEPs by a former Director General in the European Commission who was given early retirement - Stefano Micossi - the system is open to abuse. Micossi told the European Parliament: 'Against this background, the main potential of degeneration of this system lies in the role of cabinets [Commissioners' private offices] in personnel and organisation matters'."

"For too long these questions have gone unanswered as the European Commission hid behind Labour MEPs. The facts show how Labour's position over Euro-fraud twisted and turned at every stage in a desperate attempt to keep Socialist EU Commissioners in office", McMillan- Scott told Conservative Party activists at a meeting in Yorkshire tonight (Fri - 19/3).

In addition, McMillan-Scott has tabled a further series of questions relating to the 'Wise Persons' enquiry and, in particular, the current status of officials formerly employed in the blighted EU Tourism Unit, who he believes have in some cases been promoted over and above routine advancement - possibly to buy their silence.

Editor's Note: Please find attached chronology of Euro-fraud events entitled "Anatomy of a cover-up".

For details, please call Edward McMillan-Scott on +32-2-284 5959, or +44-(0)1757 630282, or GSM +44-(0)385 263007; or Brussels Press Office on +32-2-284 3024 / 3248, or GSM +44-(0)385 730131Conservatives in the European Parliament
March 1999


ANATOMY OF A COVER-UP FROM THE SPECIFIC (FRAUD IN THE EU TOURISM UNIT) TO THE GENERAL (THE 1996 BUDGET SAGA AND THE WISE PERSONS REPORT IN ITS POLITICAL CONTEXT)

1977 (Jul)    Court of Auditors established after pressure from Conservatives.

1990 (Apr)    Conservative MEP Edward McMillan-Scott denounces mismanagement and fraud in the European Year of Tourism - EYT - (administered by the European Commission's DG XXIII) and calls for investigation by Court of Auditors and the EP.

1992 (Apr)    Special Court of Auditors report on EYT fails to uncover serious irregularities.

1994 (Mar)    Commission suspends two officials from DG XXIII on full pay.

1994 (Apr)    EP adopts more critical report on EYT (The Holzfuss Report). McMillan-Scottdemands incoming EP goes further and inserts amendment calling for re- examination of the case (Socialist Group - the PES - vote against).

1994 (Oct)    McMillan-Scott discovers internal Commission disciplinary panel is to retire suspended DG XXIII officials on grounds of "ill-health".

1995 (Feb)    McMillan-Scott calls in Belgian police to investigate fraud in the Commission - an unprecedented move.

1995 (Mar)    EP appoints German MEP Rosemarie Wemheuer to report on Tourism Fraud allegations and the cover-up by the Commission. Her report confirms McMillan- Scott's allegations and is overwhelmingly approved by MEPs.

1996 (Dec)    Second Court of Auditors report on tourism published. Again there is no serious analysis of fraud and corruption: it simply states that 40% of tourism contracts were "problematic".

1998 (Mar)    EP postpones vote on Commission's 1996 accounts. Instead passes resolution containing specific demands, drafted by Conservative Budgets Spokesman James Elles MEP, for measures to be taken by the Commission to a detailed timetable.

1998 (Jul)    Commission produces report on Tourism Unit, finally admitting that fraud and irregularities led to at least £3.75 million going astray.

1998 (Oct)    At Elles' instigation, Commission produces report on fraud and mismanagement in its humanitarian unit (ECHO) in which names have been deleted. PES do not support his condemnation of this.

1998 (Oct)    EP- led by Elles - passes resolution calling for the creation of an independent anti-fraud office, provoking a reversal of Commission policy as Jacques Santeraccepts the need for this.

05.11.98    Conservative MEPs launch campaign "Platform for Reform: No to a Bigger Brussels!"

09.12.98    Conservative MEPs call on EU Heads of Government at the Vienna Summit to support EP to force the Commission to clean up its act.

09.12.98    Commission official Paul van Buitenen (a member of the audit team on EYT) turns whistleblower and reports cover-up of widespread fraud and financial mismanagement in the Commission. He is later suspended on half-pay.

11.12.98    Conservative Budgets Spokesman James Elles tables his report on the EU's 1996 accounts. In the Committee debate, Labour MEPs Lord Tomlinson and Terry Wynn - supported by British Labour MEPs - attack Elles' approach to fraud and mismanagement in the Commission.

16.12.98    PES Spokesman on Budgetary Controls, Rosemarie Wemheuer, resigns in protest at Pauline Green's insistance that the PES supports her position and does not attack the Commission. Splits develop in the PES. UK Labour MEPs ordered to support the Commission.

17.12.98    EP passes Elles Report on the 1996 accounts (270 to 225) - majority of PES votes against. The report refuses to clear the accounts and specifically criticizes Commissioners Edith Cresson and Manuel Marin. Also the majority of PES votes against a paragraph calling for "urgent action to modernize the structures in preparation for an incoming Commission".

17.12.98    Pauline Green tables a censure motion but declares it is intended as a motion of confidence in the Commission (there is no provision in EP Rules of Procedure for this). McMillan-Scott denounces this move and describes Green as "the most confused woman in Europe".

06.01.99    Paul van Buitenen tells BBC Radio Four 'Today' programme, "I am a bit disappointed about the attitude of the Socialist faction and notably Mrs Green. She seems to support the Commission."

14.01.99    Jacques Santer admits "irregularities" but denies a cover-up. Majority of PES and all EPLP present - 51 - vote against a resolution championed byConservative MEPs calling for resignation of Cresson and it is defeated.

14.01.99    After Pauline Green withdrew her censure motion, EP votes on an alternative censure motion Majority of PES and 53 Labour MEPs vote against and it is defeated (232 to 293).

14.01.99    Committee of Wise Men established to investigate cronyism, corruption, fraud and mismanagement in the European Commission. Pauline Green sealed "Wise Men" lifesaver for Commission over midnight drink with Santer beforehand.

23.02.99    Edith Cresson appears before EP Budgetary Control Committee. Labour MEP Michael Tappin calls for her resignation. PES Group seeks to distance itself from this and issues press release entitled: "Socialists reject call for Cresson's resignation."

11.03.99    Joyce Quin MP, UK Minister for Europe admits in a letter to Conservative MEP Roy Perry that "the Council has not formally discussed the way in which the Commissioners have performed their duties."

15.03.99    Committee of Wise Men publish report. Conservative MEPs call for all 20 Commissioners to resign. They do so a few hours later. PES Group welcomes resignation. In his first public statement on the issue in 1999, Tony Blair tells the House of Commons on 16 March "it is absolutely right that the Commission resigned en masse".

EP - European Parliament; PES - Party of European Socialists; EPP - European People's Party; EPLP - European Parliamentary Labour Party; EYT - European Year of Tourism