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Fighting against fraud

• Mark Mardell
• 21 Feb 08, 10:59 PM

There’s a tussle going on between the powers that be at the European parliament and the over allegations of fraud.

As a member of the budgetary committee, Mr Davies asked for .

He refused to sign an agreement not to disclose anything, but was shut in a room and allowed to read the report (on years 2004-2006) while forbidden to copy it or even take notes.

Mr Davies told me that he is in no doubt that the report reveals widespread maladministration and that fraud has taken place.

Third parties

At the moment MEPs get an allowance of Β£130,000 for office staff. It appears that the money is usually paid to a third party, known as a service provider, who then should pay the assistants.

The service provider is usually a firm of accountants or a political party. Mr Davies says that it was obvious from the report that some of the cash was paid to fictional companies.

Other companies may exist but they are not registered in Belgium, as required by law. Some cash was paid to members of MEPs' families. Some was paid to political parties and kept by them rather than used for the proper purpose.

Mr Davies says he has no doubt that some people should go to prison for this and has alerted the EU’s fraud office. The parliament, however, says no specific individual examples of fraud were found and they don’t need to send the report .

Furious response

Other MEPs are also furious. I spoke to Labour’s leader in the parliament, Gary Titley, who told me that people already thought MEPs were crooks, despite all their hard work, and this would make things worse.

He says that the rules have been tightened up somewhat because MEPs now have to show pay slips and the like to back up their spending claims.

He wants a system like the House of Commons where an independent arm of parliament, the Fees Office, pays the money directly to the people employed.

That’s why for MPs the only way to abuse the system is to β€œemploy” a friend or relative.

How open are our political parties?

Labour MEPs do submit their claims to an independent audit. This is not published but I have seen the letter from the auditors to Mr Titley saying that everything was above board.

Labour is calling for all MEPs to submit to such an audit. But is this good enough? Why not just publish the details of how much they spend and on how many people? Mr Titley told me a lot of people wouldn’t like others knowing what they earn.

Is this good enough?

Obeying the rules

The Conservatives don’t have any such system, saying merely that their MEPs are expected to obey parliamentary guidelines. The Lib Dems have no internal guidelines although .

Chris Davies also raises an interesting, but controversial point.

He says that in Northern Europe and Scandinavia much higher standards are expected and what would be seen as dishonest there is just normal practice in the South.

I’m told one well known Italian MEP was boasting that he and many of his colleagues had set up false companies to channel money back into their own pockets and it was all within the rules. Is it fair to regard the line between olive oil and butter as also the line between honesty and corruption?

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