OLAF’s Dalligate report slammed as ‘biased’, ‘amateurish’

Giovanni Kessler, head of the EU's anti-fraud office OLAF, has come under fire from MEPs and NGOs alike, after a Maltese online newspaper published a leak of the agency's investigation into former EU commissioner John Dalli, who was forced to resign last year amid a tobacco lobbying scandal. OLAF said it had no comment to make.

The European Commission is feeling the heat too.

The leaked OLAF report, which lacks several pages, "confirms the impression of a biased and partly amateurish investigation […], coupled with violations of basic rights," said Inge Gräßle, a German MEP from the centre-right European People's Party (EPP).

"The part of the report now accessible is full of speculation, assertions and obviously uncritical repetition of witness accounts,” Gräßle said in a statement published today (29 April). Gräßle is the EPP coordinator in the European Parliament's budgetary control committee.

Dalli was forced to resign as EU health commissioner in October 2012 after an investigation connected him with an attempt to influence EU tobacco legislation. The Maltese commissioner has always denied any wrongdoing.

European Commission's image at risk

The 43-pages leaked OLAF report indeed lacks two pages, but its conclusions and some 200 pages of attached documents appear genuine.

“The interview records annexed to the report demonstrate an amateurish approach by OLAF, with the written records alleging that one OLAF official was attending different witness interviews at the same time," Gräßle said.

"How is that possible?” she asked.

In its ‘final summary’, the report finds no conclusive evidence of Dalli's direct participation in money exchanges for political services obtained by Silvio Zammit, a Maltese entrepreneur, for the manufacturer of snuff tobacco Swedish Match.

The report mentions however “a number of unambiguous and converging circumstantial items of evidence gathered in the course of the investigation” indicating that Dalli was actually aware of "both the machinations of Zammit and the fact that the latter was using his name and position to gain financial advantages".

As a result of the investigation, the leaked OLAF report says that Dalli has put the European Commission's image and reputation at risk, and that inconsistencies in his statements, together with findings of the investigation, could be seen as a breach of his duty to uphold the dignity of his office.

The report says it has been ascertained that Zammit requested that Swedish Match pay a bribe of €60 million, and ESTOC, the European Smokeless Tobacco Council, another €10 million,  in return for obtaining a Commission proposal to lift a ban on snus (powder tobacco).

The report, however, leaves open the question of whether Zammit made it clear that he was acting on behalf of Dalli, or whether he only pretended to do so.

The role of Gayle Kimberley, a possible accomplice in the alleged attempt to extort bribes from Swedish Tobacco, appears foggy in the report.

Does Barroso practice what he preaches?

The Corporate Europe Observatory (CEO), an NGO that investigates corporate lobbying power in the EU, said the leaked report may only have revealed the tip of the iceberg on 'Dalligate'.

While it may appear that Dalli violated the Commission's transparency rules relating to contacts with lobbyists, other top Commission officials, including Barroso’s own cabinet, had “ignored these rules” too, CEO claimed.

CEO pointed out that the report had revealed “a shocking new fact”: When preparing the complaint to the European Commission, Swedish Match was assisted by former Commission Legal Service head Michel Petite, who established contact with Catherine Day, Secretary-General of the European Commission.

“Petite went through the revolving door to work at lobbying-law firm Clifford Chance, whose clients include tobacco giant Philip Morris.

Petite is also a member of the European Commission's ad-hoc ethical committee, tasked with advising on conflicts of interests when Commissioners go through the revolving door, re-appointed for a second three-year term in December 2012," CEO says.

"CEO will urge the Commission to remove Michel Petite from the ad-hoc ethical committee to end this outrageous conflict of interest,” the NGO adds.

The group concludes that on the basis of the leaked report, a conclusion can be drawn that “OLAF’s investigation was seriously flawed and that its conclusions are unconvincing, if not biased”.

“In the report, OLAF refers to the Code of Conduct for Commissioners, but the actual wording of the code is far too weak to serve as justification for Dalli’s resignation," CEO say, promising to publish “additional observations, as the burning questions for OLAF head Kessler and Commission President Barroso start to erupt”.

EURACTIV asked the Commission, and OLAF chief Giovanni Kessler, to answer the accusations. In an email OLAF said they would not comment. 

Commission spokesperson Pia Ahrenkilde Hansen responded promptly by saying that the EU executive was aware of the leak, and that it had respected its obligations of confidentiality.

“With the leak everyone is now free to read the report and the conclusions that led former Commissioner John Dalli to resign. The reasons behind this resignation were political; Mr Dalli's situation as Commissioner, after the OLAF investigation and findings, had become untenable,” Ahrenkilde-Hansen said.

She added that however this is needed to be separated from the ongoing criminal process and investigation in Malta, triggered by the leaked OLAF report.

“This leak does not change the fact that we are not able to comment on this ongoing criminal procedure. Generally, the Commission and other institutions have an obligation not to put pressure on authorities conducting independent investigations into matters of fraud and trading of influence,” she said.

Positions

Commenting on the leaked report, Green MEP Bart Staes, vice chair of the Parliament's budgetary control committee, said:

“The OLAF-document […] shows clearly that this inquiry was not done à charge and à décharge and can not be dubbed impartial. Reading this document, even when incomplete […] confirms the accuracy of the accusations as formulated by the OLAF Supervisory Committee. These accusations on the way OLAF conducted its inquiry include the use of certain questionable methods, a lack of respect for procedures and the absence of respect for fundamental human rights."

[…]Moreover the now leaked OLAF report reveals in Annexe 2 an unacceptable collusion between Swedish Match lobbyist Michel Petite and the secretary-general of the European Commission,” Staes says.

Green MEP José Bové, vice chair of the Parliament's agriculture committee, added:

“The accusations against John Dalli, as we had supposed, are not based on concrete facts.

By sidelining the Surveillance Committee of OLAF, Commission President José Barroso did not respect the rules of the institutions. It is now high time that Barroso explains himself over these dysfunctions and that he takes responsibility for his actions."

Background

John Dalli resigned as Commissioner for Health and Consumer Policy in October 2012 following a report from the EU's anti-fraud office (OLAF).

The report claimed that a Maltese lobbyist had approached the tobacco producer Swedish Match and proposed making use of his contacts with Dalli to fix the EU export ban on powder tobacco (snus).

The report claimed that, while Dalli was not involved, he knew what was going on.

Further Reading

NGOs

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