Anti-fraud chief: Countries under-report EU funds scams

The European Union's anti-fraud body recovered a record €691 million last year, it said on Tuesday, but expressed concern that public bodies were getting more reluctant to tip it off for fear of damaging national reputations.

The European Anti-Fraud Office (OLAF) – which monitors the use of EU funds and investigates wrongdoing within EU institutions – saw an increase in private tip-offs thanks to a new internet notification system, it said in its 2011 annual report.

But information from EU institutions and member states was becoming more scarce, said OLAF's director-general.

"This decrease in information from public authorities worries us," Giovanni Kessler told reporters.

Many of the larger fraud cases concern EU Structural Funds, which pay for regional infrastructure projects and are overseen by member states. One such investigation, into the financing of road works in Italy, yielded €389 million in recovered EU funds last year.

Member states may under-report instances of fraud to give the appearance of better ranking in corruption tables, but the growing cross-border nature of such crimes meant that assigning national blame was not useful, Kessler said.

"It's not a European Championship in the ranking," he said, adding that organised criminals increasingly shop around for countries with lax corruption regulations or low transparency for their transactions.

Internal inspectors in EU institutions

Scrutinising EU institutions themselves, Kessler said OLAF had come into conflict with some members of the European Parliament when, during an investigation into accepting payments for adding amendments to legislation, OLAF was barred from entering their offices.

The agency eventually succeeded in gaining access, but after a considerable delay. Two of the politicians targeted by the probe later resigned, and OLAF recommended judicial action against a third.

Kessler said that although it had since been clarified that OLAF does have the power to enter the offices of MEPs, some politicians still want to limit its powers.

Ingeborg Grässle, a German Christian Democrat who is leading a parliamentary review of OLAF, said access to MEPs' offices violates their parliamentary immunity.

"We asked to make clear that there is no access to members' offices to OLAF. OLAF is disputing our immunity," Grässle told Reuters.

Normal citizens are protected from unwarranted searches and EU officials are protected by staff regulations, but members of the European Parliament are left unprotected, Grässle said.

"This makes us the least protected group within the whole European Union." 

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