Final report on Eurostat fraud scandal highlights failings

BRUSSELS, Oct 27 (AFP) - A final report into alleged fraud at Eurostat has confirmed interim findings which accused the EU data agency of failings but not enough to force any political resignations, a spokesman said Monday.

In September the European Commission's Internal Audit Service higlighted in a preliminary report a "total lack of audit trail" at Eurostat which enabled millions of euros to go missing in suspicious deals with outside contractors.

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Its findings, along with those of two other reports published at the same time, increased pressure on commission chief Romano Prodi to sack EU monetary affairs commissioner Pedro Solbes, ultimately in charge of Eurostat.

The interim report said "there is little evidence of adequate transparency and communication between the former director-general of Eurostat and both the responsible commissioner (Solbes) and his own management team".

But Prodi resisted the pressure, saying the reports indicated that the rot at Eurostat had largely set in before his commission took over from its corruption-tainted predecessor in 1999.

The final version of the report was sent last Friday to the European Parliament by the commission, the EU's executive arm.

"Its contents and its findings confirm the findings of the interim report," said chief commission spokesman Reijo Kemppinen. "The political conclusion also remains the same."

Three Eurostat executives, including its French director-general Yves Franchet, who are all now suspended, were accused of creating secret bank accounts to house funds from suspect contracts signed with outside contractors.

The officials claim they did not line their own pockets but used the funds to make up for a "chronic lack of resources" and to short-cut cumbersome budgetary procedures -- all in Eurostat's own interest.

Another report, by the EU's anti-fraud investigation agency OLAF, said last month that the EU was out of pocket by at least three million euros from one of the Eurostat contractors, and by two million from a couple of others, with scant chance of recovering most of the money.

mt/txw

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