EU auditor spells out scale of fraud

The European commission's efforts to play down the seriousness of a fraud scandal engulfing its statistical arm were undermined by one of its own officials yesterday who said that the document's findings were “very troubling.”

The commission claims that a confidential report into a network of secret bank accounts at Eurostat, its statistical office in Luxembourg, contains lots of positive news for the EU executive. However Jules Muis, head of the commission's internal audit service and the man who drew up the report, painted a very different picture yesterday.

Speaking to the European parliament, he said that the situation in Eurostat was “very troubling” and suggested that there were plenty of other problems which would come to light in the next few years.

“The picture that emerges … clearly indicates that we have a pretty big problem in Eurostat,” he told MEPs.

“What was very disturbing was the lack of transparency and the lack of communication and the fact that not all the problems were shared with the relevant authorities in the commission.” Mr Muis also complained that his investigation had been repeatedly frustrated and that he had been forced to resort to “highly unconventional methods” to extract some of the information.

The scandal, which has seen three senior officials suspended, centres on allegations that almost €5m (£3.4m) was siphoned off into secret bank accounts over a long period. Officials are also accused of unfairly awarding contracts to outside companies over which they sometimes presided, inflating tender awards and inventing fictitious contracts.

The problems at Eurostat were also not an isolated case. “There will be legacy problems for years to come and many will come out into the open.”

Although the report has still not been made public Jens-Peter Bonde, a Danish MEP, said that it showed that almost a third of the 400 Eurostat contracts examined by Mr Muis appeared to be suspect.

Those contracts – signed between 1999 and 2002 between Eurostat and a network of outside firms – were worth €450m. Mr Bonde noted that 53% of the contracts had been awarded to the same three firms.

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