EU: The European Commission has opened disciplinary proceedings against three senior officials at Eurostat, the EU statistics office, after admitting there may have been "serious wrong-doing", writes Denis Staunton
The Commission's secretary general, Mr David O'Sullivan, will co-ordinate a task force to investigate allegations that Eurostat has been inflating the value of some contracts and siphoning off extra cash into irregular accounts since 1989.
Eurostat, which supplies important financial information to markets as well as to the EU, is accused of keeping double accounts, fictitious accounts, fictitious controls and breaches of procedure.
Mr Neil Kinnock, a vice-president of the Commission, said that preliminary investigations suggested the possibility of serious wrong-doing.
"What we have is evidence of possible irregularities on a wide scale and over a considerable period of time," he said.
The president of the European parliament, Mr Pat Cox, compared the scandal to the corruption allegations which brought down Mr Jacques Santer's Commission in 1999.
"It is deeply disappointing, four years after the unprecedented resignation of a European Commission in matters of financial control and management, that we should find ourselves today again in this position," he said.
The Commission yesterday appointed a new head of Eurostat, Mr Michel Vanden Abeelle, to replace Mr Yves Franchet, the director-general who left his post voluntarily when the first allegations were made in May.
Disciplinary proceedings have been started against Mr Franchet and two other Eurostat officials, Mr Daniel Byk and Mr Photius Nanopoulos.
At the centre of the allegations is Planistat, a French economics and statistics consultancy that Eurostat has used since 1991.
French prosecutors and OLAF, the EU's anti-fraud body, are investigating alleged irregularities in the relationship between Eurostat and Planistat.
The French authorities are investigating the alleged diversion into a Luxemburg savings account of €900,000 of EU money earmarked for Eurostat.
The Commission yesterday suspended its 58 current contracts with Planistat and suggested that contracts with other companies could be suspended too.
Ms Diemut Theato MEP, who heads the European Parliament's budgetary control committee, questioned whether Mr O'Sullivan is the right choice to lead the Commission's inquiry into Eurostat.
Mr O'Sullivan told the European Parliament last month he did not inform the Commission that OLAF had started an investigation into Eurostat because he feared it would jeopardise the independence of the investigation.
The Commission announced yesterday it will draw up a code of conduct to improve the flow of information between OLAF and the Commission.
The Commission president, Mr Romano Prodi, has consistently denied allegations that he and two other commissioners knew more about the alleged fraud at Eurostat than they have admitted.
The Economic and Monetary Affairs Commissioner, Mr Pedro Solbes, stressed yesterday there was no suggestion that the reliability of Eurostat's statistics had been affected in any way by the alleged wrong-doing.