Will the Serious Fraud Office take EU Fraud Seriously? - Second Instalment
The head of the SFO has asked one of his staff to re-examine the dossier on EU fraud and corruption as a result of my recent letter.
The following additional information has now gone to him.
Head of Resources and Planning and Accountancy
Serious Fraud Office
London
February 2009
Sir
I understand you have been asked by Richard Alderman to re-visit the dossier which Marta Andreasen, former Chief Accounting Officer of the European Commission, and I submitted during Robert Wardle’s period in office.
That is good news. However I must emphasise that a great deal more has come to light since my original visit, much of it even more alarming than the information we provided then.
Three examples will suffice, although I will resist the temptation to go into details at this stage.
1. The European Commission has invented the concept of “tolerable risk” which it sets at 4% of the total budget. That, in absolute terms, is a huge sum of money. The concept has been devised as a means of “justifying” hopelessly inadequate record keeping and auditing. It also attempts to blur the distinction between genuine individual errors and weaknesses in policy and systems.
2. The application of what the EU chooses to call “shared management” fundamentally undermines any realistic prospect of auditable accounts. So long as member states’ governments’ are left to provide information about the way in which European funds have been distributed almost guarantees large scale misappropriations, if not fraud. Most of the worst offenders are in the south and east of the EU, specifically Greece, Bulgaria and Romania.
3. The European Parliament and Commission have systematically attempted to suppress serious concerns about the massive misuse of public funds supposedly allocated for humanitarian aid. In particular there are persisting allegations against Commissioner Louis Michel involving the disappearance of some 300 million euros into the Congo, with which Mr Michel has long standing political and family relations.
I am well aware of the seriousness of these allegations and I do not mention them lightly.
The above points are, of course, in addition to the fundamental constitutional issue which I have already raised via my letter to the President of the Court of Auditors, a copy of which was included in my earlier letter to Mr Alderman.
My diary is at your disposal.
Ashley Mote MEP
And will The EU's Court of Auditors Finally Do the Same?
Last week's meeting of the European Parliament's Budget Control Committee heard Victor Caldiera, the Portuguese president of the EU's Court of Auditors admit that they employ 880 staff.
Given the costs involved, including travel all over the globe to locations where EU money is spent, the fact that the EU's accounts have never been signed off is open to two interpretations. Neither are acceptable from a taxpayers point of view. Either the Court of Auditors is wasting its time and our money, or it has no teeth. There are no prizes for choosing both answers.
The same meeting provided another opportunity to raise the issue of this new invention to avoid accountability - "tolerable risk". It has been set by Commissioner Kallas, of Estonian, who is supposedly in charge of the fight against fraud, at 4%. Four percent of over 120 billion euros a year is a shedload of money. (Even the true total is obscured in the Court of Auditors annual report, which will come as no surprise to anyone.)
With many members of the Court also at the meeting I had the opportunity to remind them that Kallas' new invention of a four per cent "error rate" (another euphemism) blurred the difference between systemic weaknesses and individual errors. It reduced the need for investigative vigour, and was merely another fraud on taxpayers. Caldiera just shrugged his shoulders. Kallas hadn't even bothered to attend the meeting.
An Insider's View of Financial Crisis
A presentation comparing the public financial accountability of over 120 countries had been made elsewhere in Brussels that day by former US Ambassador Terry Miller, now of the Heritage Foundation think-tank, which is backed by the Wall Street Journal. Amongst other things, we learned that the former advisors to the government of New Zealand - the first and only country ever to produce national government accounts up to the standard of international public companies (and they did it in less than six months) - have now been appointed to advice President Obama in the US. He was not impressed by the EU's lack of public finances accounting.
Mr Miller made some illuminating observations about the current international financial crisis, and its American origins. He said the US government positively encouraged the granting of cheap mortgages to poorer people, knowing they could not afford them. This was utterly irresponsible in his opinion, and ultimately proved lethal to the banking system. He also thought the Federal reserve kept interest rates far too low for far too long. This added to the first problem, and accelerated the ultimate collapse of the system.
His final observation was equally telling. His think-tank had concluded that joining the EU restricted the trade freedom of new members and had damaged their economies.
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