In 2000, internal auditors raised concerns about fictitious

Eurostat Eurostat ('European Statistical Office'; DG ESTAT) is a Directorate-General of the European Commission located in the Kirchberg, Luxembourg, Kirchberg quarter of Luxembourg City, Luxembourg. Eurostat's main responsibilities are to provide statis ...

's contracts with outside companies and referred the matter to the European Anti-Fraud Office,

OLAF Olaf or Olav (, , or British ; Old Norse: ''Áleifr'', ''Ólafr'', ''Óleifr'', ''Anleifr'') is a Scandinavian and German given name. It is presumably of Proto-Norse origin, reconstructed as ''*Anu-laibaz'', from ''anu'' "ancestor, grand-father" a ...

. OLAF did not react. In 2001,

Paul van Buitenen Paul van Buitenen (; born 28 May 1957) is a retired Dutch politician of the Europe Transparent Party who served as a Member of the European Parliament from 2004 to 2009. He was an assistant-auditor in the European Commission's Financial Control ...

, whose earlier report had indirectly led to the resignation of the previous Santer Commission, produced a second report, but this at first led to no action, until

Hans-Martin Tillack Hans-Martin Tillack (born 1961 in Königs Wusterhausen, near Berlin), is a German reporter, who grew up in Stuttgart. He studied politology and sociology in Marburg and Berlin, worked for five years as reporter for taz before coming to Stern in ...

and the press started to take interest in the matter. Questions were asked in the

European Parliament The European Parliament (EP) is one of the legislative bodies of the European Union and one of its seven institutions. Together with the Council of the European Union (known as the Council and informally as the Council of Ministers), it adopts ...

, OLAF produced a new report entitled "A vast enterprise for looting community funds" as it was reported by

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...

on May 16, 2003. Finally the Prodi Commission acted. Three senior Eurostat officials were removed from their posts and a number of contracts with outside companies were cancelled. It was alleged that, at least during the 1990s, Eurostat used a double accounting system to transfer large amounts of money to secret

bank account A bank account is a financial account maintained by a bank or other financial institution in which the financial transactions between the bank and a customer are recorded. Each financial institution sets the terms and conditions for each type o ...

s not monitored by auditors and that the value of some contracts was inflated. Allegedly there was evidence of

cronyism Cronyism is the spoils system practice of partiality in awarding jobs and other advantages to friends or trusted colleagues, especially in politics and between politicians and supportive organizations. For example, cronyism occurs when appointin ...

and financial irregularities, though no evidence of personal enrichment was found. Between four and five million

euro The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...

was thought to have been "siphoned off", mostly between 1996 and 2001. Some of the money was recovered. On July 8, 2008 the European Commission was condemned by the

European Court of Justice The European Court of Justice (ECJ, french: Cour de Justice européenne), formally just the Court of Justice, is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European Un ...

for several failures of OLAF. The Commission had to pay €56,000 to two senior Eurostat officials.

References

Financial scandals 2000 in the European Union 2001 in the European Union 2003 in the European Union European Commission

See also

References