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Democrat August 2002 (Number 64)

How the EU Operates

Commission Vice President
Neil Kinnock admits
he cannot stop fraud

Backhanders, fraud and bribes

In a Radio 4 broadcast about Slovakia - an applicant EU member - it was revealed large sums of EU money have gone missing. Money was provided for a sewerage plant. Because of the poor quality wood used the windows to this plant do not open which creates an explosive hazard due to the build up of methane in the plant. Only 60% of the residences in the town are connected to the sewers instead of 100%. Money has gone missing and there were no checks in place to see the EU grant was spent on the plant and the anomalies remain because on paper the money has been used up.

Interview on Radio 4

In an interview in the broadcast, Commissioner Kinnock, said because there is fraud going on within the EU, the EU cannot castigate applicant members about EU finance related fraud!

This appears to be an open admission that Mr Kinnock, Vice President of the Commission, has been unable to carry out the job he was appointed for after the previous Commission resigned en bloc over nepotism and wholesale fraud across the EU.

Also evident is that the missing money has in reality ended up as easy slush money to convince many in public and other high positions that this is what the EU is all about.

Cover up

Soon after this broadcast on August 1st, Neil Kinnock, was accused by the EUs former chief accountant, Marta Andreasen, of covering up criticism that flawed accounting left its £63,000 million budget open to massive fraud.

Marta Andreasen, a Spaniard, was removed from her post in May after just four months, claimed there was a complete lack of compliance with minimum accounting standards. Apparantly the computer system on which the Commissions financial transactions are processed is incoherent and insecure.

Speaking at a news conference in the House of Commons on 1st August, Ms Andreasen the first professional accountant appointed to the post,stated: "Despite official press briefings against me and appearances on this issue by Commissioner Kinnock and his staff, I have been repeatedly reminded of my obligation to remain silent. Commissioner Kinnock even tried . . . to prevent me from appearing before key parliamentary committees.

"Taxpayers money is at stake . . . I have been able to prove the systems are vulnerable (but) quantifying is very difficult. An institution that doesnt have an accounting system is open to a big size of fraud.

"Unlike the issues surrounding Enron and WorldCom, where you can at least trace transactions and accounts, you cannot do so within the EU accounts as there is no system in place for tracing adjustments and changes to figures presented. Fraud can therefore lie hidden within the system undetected and untraced." she said. (The Times 2 August 2002)

Ms Andreasen was asked to contradict financial regulations and when she refused to sign off annual accounts.was threatened with dismissal.

She criticised Mr Kinnock, who oversaw the reforms, saying that his efforts had failed. Mr Kinnock unsuccessfully instructed lawyers to prevent her from giving evidence to the European Parliament's Budgetary Control Commission (BCC) later this month.

Appointed to end fraud

Mr Kinnock made much of his reappointment to the Commission with specific job of cleaning up operations, ending fraud and nepotism after the mass resignation of the whole commission two years ago.

As happened with a previous whistle-blower, the Commission is taking disciplinary action against the accountant on charges of breaching rules governing the conduct of employees. They pointed to the fact known to them beforehand that the accountant was previously suspended from the Organisation for Economic Co-operation and Development in 2000 after revealing accounting irregularities there.


A Commission spokesman for administration reform, said: We have been discussing since 1999 with the Court of Auditors, the European Parliament and Council of Ministers the deficiencies and the reforms necessary. She (Ms Andreasen) was actually hired to help us implement specific actions .To claim this is a cover-up is pure nonsense. But a report by the EU Court of Auditors on the same day accused the Commission of not taking any remedial action despite faults identified in accounting system.

This Budgetary Control Commission had met earlier in the summer when an electronic vote (which does not record how individual MEPs voted) declined to approve the accounts by 10 votes to 10 with one abstention. This caused consternation in the Commission.

NO means vote again

In practice EU rules say that a YES vote only needs a majority of one but a NO vote is merely temporary and whoever was voting was obviously ignorant and is asked to rethink, change their mind and vote differently. Examples include the Danes over the Maastricht treaty and now the Irish over Nice! The BCC was asked to vote again with open voting so names of those voting against are recorded. This time the accounts were approved with the NO votes dropping from 10 to 4. This is called EU "democracy" where lack of political courage and opportunism reigns!