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EU fraud

BBC reports that the European Commission president, Romano Prodi, has been summoned by the European parliament to answer questions on a growing fraud scandal in the EU’s executive.

The EU’s administrative commissioner, Neil Kinnock, has revealed that up until 1999 there was a relatively extensive practice of setting up secret and illegal bank accounts. Millions of euros are thought to have disappeared.

Mr Kinnock told a parliamentary committee on Wednesday there was evidence this “utterly reprehensible” practice was continuing.

As a result, he has ordered an immediate inquiry into other Commission departments and is sending a fraud questionnaire to the European Commission’s most senior officials to assess the extent of the problem.

Are we surprised? No. The growing number of scandals emerging from the EU hints at deep-seated fraud and corruption. Soon it will perhaps become unnecessary to produce an argument against the EU. Just recording it’s blunders should do the trick…

20 comments to EU fraud

  • Chris Josephson

    Not surprising, really. Diverting funds/fraud is easier to get away with in a bureaucracy that has little/no accountability.

    If it’s found some people have been helping themselves to some EU funds, will there be punishment -or- just a reprimand? I recall reading about fiscal ‘anomalies’ for a couple of years. Seemed to me as if nobody wanted to deal with it.

    What’s changed now to force the Eurocrats to deal with this?

    It’s fallen off the news radar, but I’d *love* to see a UN audit. I’d especially like to have the Iraq – UN ‘oil-for-everything-but-food-for-Iraqis’ program
    (aka Iraq-UN ‘oil for food program’) audited. AND the results made public.

  • S. Weasel

    Chris: yes, wasn’t there something a few years back about an order for a bunch of sniper rifles that no-one could quite work out? The words “EU audit” brought that to mind.

  • Rich

    Brussels widens fraud probe

    The line
    “I can’t be blamed or asked to take responsibility for something I didn’t know about.” really sticks out for me.

  • Kodiak

    OK the bride (the EU) is a shoplifter.


    Do you know ONE country where there’s no corruption?

  • The EU has a -lot- of corruption, we hear about these stories all the time. Jacque Santers Commission bit the dust over it (and by resigning they all saved their own asses, too, half of them are -still there-), the various whistleblowers have been traduced by the EUrocrats and eventually gave up, and we hear about fraud stories pretty often, seems to me.

    As has been pointed out, fraud and corruption is much, Much easier to perpetrate and get away with in an unaccountable bureaucracy.

    I have some tales from an Army friend of mine about what they were up to with UN gear in Kosovo, but suffice to say the UN is fraud ridden as well. All these supranational institutions are, I’ll wager.

    The Commission has a budget of £68 billion. 5 percent of that is suspected to be lost to fraud. A -massive- amount of money. As I put into context elsewhere, 68 billion is enough to pay for about 18 of those enormous US Nimitz carriers, thats a -lot- of money, should it be put to other uses (defence in my example).

    May as well give that 68 bill to the tramps and the hobos, for all the good its done me, the voter, and the UK, my country. (ie none)

  • T. Hartin

    “Do you know ONE country where there’s no corruption?”

    Well, that alright then. Certainly no reason to get concerned and try to get to the bottom of it, maybe throw some folks in jail. Move along, nothing to see here.

  • A_t

    i think what kodiak’s saying is more that, just ‘cos there’s corruption, it doesn’t mean you should toss out the whole institution… If the US has a corrupt administration are you suddenly going to be all “let’s just all disband the union”, or “let’s ditch the constitution… this clearly isn’t working”?

    No… you’ll think of ways to make corruption harder to get away with. Again, this is not a case against the existance of the EU per se, but definitely a case for reform & greater accountability. The case for/against the existance of the EU is a separate issue in my eyes.

  • Sandy P.

    It’s not fraud, it’s just the price of doing business.

    Obviously the British are not as sophisticated as the froggies.

    Why can’t Brits just separate politics from business the way they can?

  • The EU isn’t a “country,” Kodiak, has no voter base, and makes its own rules as it goes along. So the “everybody does it” defense is a terribly weak one, and if that’s what Europhiles are reduced to, then this begs the question: Why is the EU itself an improvement over business as usual? And if it isn’t, why are yo so enamored with it? The burden, after all, is on the EU to demonstrate that it is a valid substitute for national independence. If it can’t even get off the ground without robbing the citizens of Europe blind, then the case for the entire enterprise is undermined seriously. “Breaking even” isn’t good enough, because that’s not the stated purpose of the EU–to fuck up matters just as badly or worse under a different banner.

    The EU is presented as a break from ordinary international politics because it’s supposed to be somehow better. But if it isn’t, then why bother with it if the only beneficiaries are going to be the ones on the recieving end of the graft–who, incidentally, face no real political opposition in the form of parties. And if the “parties” of the EU are the countries themselves, again the question is begged: Why do they need the EU to manage their affairs at all?

    The scandals that have plagued the EU, before it’s even fully in effect, would be enough on a merely national level to destroy careers and whole political parties. What recourse do Europeans have? None whatsoever.

    That’s the whole point, though, isn’t it?

  • Kodiak


    You’re right: EU is no real country & hence is accountability a regular practice needing enforceability in there. Perhaps if EU citizens were given the right to vote for decison-makers things would change dramatically. So more Europe is wanted, not less.

    I don’t think EU opportuneness is to challenge or balance business: it’s more a political regional globalisation that’s at stake. Few people are in love with the EU; still must of them tend to think a closer & deepened rapprochement between member States would yield more power, influence & prosperity to the area covered by the Union.

    Also, however demoralising fraud stories can be, they are short-term ups & downs. No need to dishearten when the going gets tough.

    It can’t be denied that EU construction is something unprecedented & following no pre-existing model. Flaws are not scarce. Especially, as you mentioned, regarding popular vote & administration accountability. As A-t pointed out, the whole stuff musn’t be discarded because of its provisional -yet suffocating- oddities.

  • Kodiak, I gather from your response that “business as usual” is not an idiosyncracy you’ve heard before. It means “the way things are usually done,” and it’s usually meant as a put-down.

    Or, I might be misunderstanding you when you refer to “business.”

    In any event, I stand by my conviction that it is the burden of the EU’s supporters to prove its worth, and that these increasingly frequent scandals do much to undermine their case. Putting the burden of proof on its detractors is a bit disingenuous, particularly when you’re willing to shrug and ignore evidence that their complaints are legitimate.

    The problems evident here are structural, and the issue isn’t whether some kind of modified EU in some diluted or democratic form is desirable. The issue is that no such version of the EU is on the table at all, and never will be. When we criticize the EU, we criticize it for what it is, not what it might be on the plant Krypton in the year 3030. And saying that maybe one day the EU will be worth a shit isn’t much of a rousing defense of it.

    You say that the EU is an untried concept, but it really isn’t. It’s an amalgamation of various ideas that have already proven useless again and again, in a thousand places and times. The Soviet Union was another, more extreme attempt at the same thing. The fact that it was brutally repressive wasn’t the reason it failed. Rather, it was repressive (and it failed) because its foundational assumptions, like those of the EU, were at once flaky and inhuman.

    Nevertheless, I concede your right to optimism, even though I think it is unsupported by any historical or presently available evidence.

  • Sandy P.

    –Also, however demoralising fraud stories can be, they are short-term ups & downs.–

    Yes, the stories and short-term ups and downs, but the fraud is long-term and deep.

    Elf, anyone?

    Business as usual.

    And Enron gets nailed for cooking the books. It’s a pittance to the Euros’ unelected elitists stealing the masses blind.

    Query, does the EU put the proposed budget and the completed spending bills online like the US does? Maybe that’s a start.

  • Theodopoulos Pherecydes

    Corruption and fraud can’t be addressed anywhere until governments (and jokes like the EU and UN) adopt double entry bookkeeping.

  • Chris Josephson

    I read the story linked by Rich.

    I urge those who haven’t read it to do so. It mentions the prior fiscal ‘anomalies’ and the punishement, or lack thereof that was meted out.

    It’s true that where you find people and lots of money, you’ll probably find fraud. We are imperfect beings. Trouble is, we *know* this to be a problem. Just went through a round of it in the US with the Enrons.

    It’s ludicrous to have a large bureaucracy, taking in lots and lots of money, and have *NO* way of tracking and accounting for it. Since we already know fraud is likely to occur, why not take pre-emptive measures to stop it?

    If you know “everyone does it”, take steps to ensure it’s as hard as possible for them to do it to you.

    The article mentions the stories I recall reading about some people who warned about fraud and were never listened to. Mind, the people worried about fraud were sounding the alarm *after* another scandal.

    From article:

    ” The last commission, led by Jacques Santer, was toppled by the parliament in 1999 amid allegations of financial misconduct. Mr Prodi came in to office promising to clean up the institution with “zero tolerance” towards fraud.”

    Why hasn’t it been dealt with? You already have to pay sky-high taxes. It’s criminal that this was a known problem and not properly dealt with.

    Another quote from article:

    “Last week Mr Kinnock revealed the “relatively extensive practice” at Eurostat until 1999 of setting up secret and illegal accounts, into which millions of euros are thought to have disappeared.
    Some commission officials say the practice, ostensibly to give more “flexibility” in carrying out EU work, was widespread in the 1990s.”

    Seems to me many people had to be aware of what was happening. They knew there were problems, they just hoped they’d go away?

    I think they were counting on the distance from the people they ‘serve’ to cushion any outrage if it came to light.


    Are people writing letters to their representatives demanding a full investigation? What did the people do the last time? Did they write letters? Protest?

    Do you feel you were listened to but ignored?

  • I asked this before and got no response, but that was before Kodiak started posting.

    Genuine question: has anyone here read former lingerie model Christine Deviers-Joncour’s ‘Whore of the Republic‘ about her role in the Elf Aquitaine corruption scandal?

    Kodiak – do you know anyone who’s read it? Is it fun/boring or insightful/unfair? Is it worth me getting as my annual token read-a-book-in-French penance? (I don’t mean to be rude, I like a lot of French things too, by the way – but I’m genuinely curious about that scandal, since I’m also an oil journalist.)

  • Mark


    I haven’t read “Whore of the Republic”. Still the book might not necessarily conceal all crispy revelations that should be brought to the public’s knowing. The book was written as Republican Christine was still under close judicial scrutiny >>> not really free to throw what she wanted on the table.

    As for the Elf scandal, you might find everything you want:

    1/ the highest degree of tackiness: the story of the 1.700-euro shoes of Roland Dumas (a controversial character associated with Miterrandesque lack of elementary dignity & who scandalisingly ended up head of the Constitutional Council that secured “immunity” to Chirac, overloaded by corruption & prevarication affairs)

    2/ sex, love(?) & no rock’n’roll at all… (the only rocking & rolling stuff was the billions of euro swinging & twisting from Switzerland onto Taiwan through Nigeria, Gabon etc)

    3/ State lies & “secret-defence” affairs >>> the planes “sold” to Taiwan

    4/ big money to finance wars (Angola), dreadful governments (Gabon, Nigeria) & face-slapping reserved for the US (diamonds in Zaire & oil in the Guinea Gulf) >>> there’s a joke in French: “Françafrique” (ie: Africa under Fr influence) sounds like “France à fric” (bread-obsessed Fr).

    5/ and a hugely cuckolded muck: the French taxpayer…

    I’ll try to find other books for you. I don’t know if streetworker Christine (D-J) is reliable at all.

  • Alfred E. Neuman

    Neil Kinnock is rattling a lot of cages over in Brussels. What’s his story? He seems like a stand-up guy if he’s willing to face down these corrupt EU politicians.

  • Kodiak


    I’ve written your name on the post starting this way:

    “I haven’t read “Whore of the Republic”. Still the book might not necessarily conceal all crispy revelations”.

    I’m sorry.

  • Thanks, Kodiak – agreed, Christine DJ may not be the most reliable of sources! I’ll research a bit.

    Alfred, Neil Kinnock is an interesting character and was the only Labour leader of the last twenty four years (the only one since Callaghan) I would have liked to see, or could have endured seeing, (I’m a Conservative) as prime minister. He is Welsh, deeply unintellectual, and widely regarded as honest. A quite short man, he was often called the “Welsh windbag” because of his habit of going on and on in speeches, but it was in fact Kinnock, more than anyone else, who broke the power of hard-left infiltrators that were taking over the Labour Party (such as the ‘Militant Tendency’ group) in the 1980s.

    While Blair discovered an interest in Christianity while at Oxford, Kinnock could claim to come from an older chapelgoing tradition of “Christian socialism” in Wales, people strong in parts of the trade-union movement who instinctively distrusted marxism, without having any intention of rolling over for factory owners to tickle their tummies.

    I am not sure if Kinnock has been corrupted in Brussels, but he is a man many people have underestimated. It was Kinnock who did the tough groundwork making Labour moderate and electable again while Blair was still a junior MP. He is tenacious.