Fraud probe finds 100 'mishandled' EU contracts

An internal audit into allegations of fraud at the European Union’s statistics office reported today that more than 100 contracts had been mishandled, but provided no details about who was involved or where the money went.

The audit presented to the European Parliament’s budget committee examined allegations that officials at Eurostat siphoned €5.3m in funds from the agency.

Most of the money apparently was diverted between 1996 and 2001.

Of 400 contracts worth about €450m looked at, almost 29% had been mishandled in some way, said the European Commission’s internal auditor, Jules Muis, in Brussels

“The picture that emerges clearly indicates that we have a pretty big problem in Eurostat,” Muis said.

“The very fact that we had to wrangle (data) … out of the hands of Eurostat staff under extremely unconventional means in 2003 means no one had been seriously willing to communicate.”

However, he did not provide any details, including whether any improprieties occurred under the current European Commission, the EU’s head office.

The EU’s anti-fraud agency, OLAF, is due to release details of its own Eurostat probe on Tuesday.

The paper trail has not yet revealed whether the money leaked into personal pockets or stayed within the agency. Last month auditors found that the agency paid for holidays, sports clubs and pricey dinners with Eurostat funds.

Commission President Romano Prodi has distanced himself from the financial irregularities, saying they occurred before he took the helm at the EU head office in 1999. He had vowed to reform the EU’s bureaucracy after a financial scandal forced the previous European Commission to resign.