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EU: Commission Seeks To Fend Off Laxity Charges In Corruption Case

The European Union's Executive Commission is facing a difficult time explaining why it has not acted sooner and more fully on allegations of fraud and corruption at the EU's statistical agency, Eurostat. The allegations are that millions of euros may have gone astray as a result of irregular accounting practices.

Prague, 25 September 2003 (RFE/RL) -- European Commission President Romano Prodi must be feeling that history repeats itself with unusual speed, as he faces a barrage of questions today from European parliamentarians on alleged corruption at an important European Union agency.

Prodi and his commission took office in 2000 on a pledge of zero tolerance for corruption. That followed the resignation of the previous commission under Jacques Santer, which was beset by allegations of cronyism and mismanagement.

It was the European Parliament that forced Santer and his team to go, and in doing so, the democratic arm of the EU for the first time asserted its power to dismiss the commission. Prodi must be aware of the ominous parallel as he takes questions from parliamentarians today.

Brussels-based political analyst Ben Crum of the Centre for European Policy Studies told RFE/RL that parliamentarians must decide how hard they are going to pursue Prodi. "The question is very much to what extent the [members of the European Parliament] want to push this issue, and whether they in the end want to take the strategic choice of showing their muscle, and showing how important parliament is, by really challenging Prodi," he said. Crum said that, given the heavy fallout that a hard-line approach could bring, the deputies may decide to tread more softly.

The problem relates to the Luxembourg-based Eurostat statistical agency, which is the subject of allegations that millions of euros have gone missing as a result of double accounting, fictitious contracts, and slush funds. The allegations are contained in a report by the EU's antifraud body OLAF, which says the irregularities occurred in the course of Eurostat contracts with outside consulting firms.

Prodi formally presents the OLAF report at today's meeting with parliamentary faction leaders, along with other documentation on the allegations. Internal EU auditors say the questionable practices were set up at Eurostat before 1999. This would tie them to the discredited Santer commission, before the Prodi era.

But the question is whether the alleged abuses continued into Prodi's rule, and if so, why they went apparently unnoticed in a commission dedicated to cleaning up corruption.

Prodi is expected to say in his defense that the practices relate to pre-existing Eurostat contacts with outside firms signed before 2000, when his team took office, and that they lapsed with the old contracts. In other words, that they were the "tail ends" of procedures that were then discontinued.

Could Prodi have done more to stem corruption? German-based analyst Peter Zervakis of Bonn University told RFE/RL that the task of oversight of the huge EU bureaucracy is a difficult one. "With a bureaucracy of more than 20,000 employees, it is not always easy to find out about things which happened before [Prodi's] administration," he said. "Those irregularities [apparently] happened in the '90s. Of course, the public will compare [Prodi] with his own slogan when he took over, namely that his administration would be the best in the world."

Prodi is expected to resist demands for resignations among his commission team, particularly that of Economic Affairs Commissioner Pedro Solbes of Spain, who has responsibility for Eurostat. Solbes annoyed parliamentarians in July when he told them he could not be held responsible for the fact that he had not been informed of any previous malpractice at Eurostat.

Crum noted also that the European Commission has been kept weak on purpose by EU member governments, and that that fact affects its efficiency. "One of the problems that the College [of Commissioners] has is that it lacks authority. All member governments have always said that the commission and the college is not the 'government for Europe,' and the member states have been really keen to downplay the authority the commission has because they don't want it to infringe too much on their own powers," Crum said.

Crum said this limits the ability of the commission to impose itself on an administration and bureaucracy that has been in existence much longer than the commission itself.