HTTP://WWW.STOPNATO.ORG.UK --------------------------- August 2, 2002
THE EUROPEAN UNION'S LOOMING ACCOUNTING
SCANDAL
If you think that Enron is the biggest accounting scandal of our time, and that the most culpable creative bookkeepers are to be found in America, think again. Think really big, big beyond any single corporation, like Brussels, like the European Union. And it is in Brussels that you'll find the most brazen attempt at cover-up, with the whistle-blower exposed to the full wrath of the uncontrollable bureaucratic Leviathan. Not many Americans are aware—as most cynical Europeans are—that about one half the European Union's budget is wasted on the Common Agricultural Policy, a fundamentally flawed program of pork-barrel subsidies for farmers encouraged to produce things that have no buyers, or not to produce them. Furthermore, billions are simply misspent as intended. About 5% of the entire EU budget, five billion dollars, is lost to straightforward fraud--from non-existent tobacco farms to imaginary decontamination plans to help deal with Chernobyl--while another 5% or so is misappropriated, and not spent on the programs for which it was designated. One-tenth of the Union's budget which the European Court of Auditors accepts is misspent amounts to almost 10 billion dollars a year. It is puzzling that the U.S. media are not reacting as yet to the news that the European Commission's former chief accountant--hired with the specific brief to overhaul accounting procedures—has been punished and vilified for claiming that the EU's one hundred billion dollar (ó98bn) annual budget is "massively open to fraud," even though a report from independent auditors backed many of her claims. The Spanish-born Marta Andreasen first came into prominence when she was suspended on full pay in May when she refused to sign the EU's accounts for 2001. "During the time I have been here I have been able to establish that the system . . . is vulnerable, involving risk of errors and fraud," she stated in a letter addressed to the Commission's President Romano Prodi of Italy on May 7. She added that there was an "urgent need" to replace the in-house controls with outside agencies mandated in the private sector that "allow transparency and accountability in the management of funds." She also urged the Commission to carry out an independent audit of the inflow and outflow of funds. In an ad hominem response that did not address the fundamentals of Marta Andraesen's claim, the European Commission dismissed her allegations as "old complaints" and criticized her performance in her job. A statement from Michaele Schreyer, the EU budget commissioner, described the appointment of Ms. Andreasen as a "mistake" and claimed she "rapidly generated extreme ill feeling in essential relationships" with colleagues. On August 1 she responded to the slight with an even more embarrassing barrage, describing the Commission's current financial regulations as "out of control" and declaring that fraud was harder to track in Brussels than in Enron or WorldCom. According to her statement to the media, there were "serious and glaring shortcomings" in parts of the budget management process and a "dangerous failing at the heart of the system" because of a "complete lack of compliance with basic and minimum accounting standards":
Paradoxically, her case has been indirectly supported by the Commission itself which has under its control a number of bodies that are supposed to be responsible for combating fraud, but their record is abysmal. The main one, UCLAF, according to the Commission's own findings, had "no standard system under which proceedings were opened, pursued and concluded"; the filing system was so chaotic that it "failed to meet the minimum requirements for criminal evidence"; the figures it produced on fraud were "incomplete and misleading"; and the Court of Auditors refers to cases where documents were "withheld or destroyed." Corruption and fraud are generally much more prevalent across the EU than they are in Great Britain or the United States for three main reasons. The standards of probity and honesty in pubic affairs are much higher in the English-speaking world than they are in countries such as France, Spain, Italy, Portugal, Greece, or Ireland. Second, the administrative and financial arrangements in the EU lend themselves to misappropriation and misuse. Furthermore, the communautaire camouflage conceals a competition for resources that is still largely a national contest. National governments don't mind the malpractices for as long as they benefit their coffers and harm others. But most importantly, the structure of the EU is bureaucratic, NOT democratic, providing the electorate with little insight and no control over corruption and fraud endemic to the system. EU standards of administration and probity are so poor is that traditions of honest and transparent government have never been established among the Union's institutions. This was shown most clearly in the recent report on the probity and efficiency of individual members of the Commission, following scandals of nepotism, favouritism, extravagance and bad management which proved too much for even hardened eurocrats. The final sentences of the report on the behaviour of Commissioners—an internal EU document, making its conclusions even more damning—read as follows: "It is becoming difficult to find anyone who has even the slightest sense of responsibility. However, that sense of responsibility is essential. . . . The temptation to deprive the concept of responsibility of all substance is a dangerous one. That concept is the ultimate manifestation of democracy." The controversy surrounding Europe's allegedly mishandled billions came at a time of steadily darkening outlook for the Old Continent's economy. The European Commission's own survey of economic sentiment published on August 2 fell to 99.4 for the month of July, from 99.6 in June. The only countries where consumer confidence improved slightly in July were Greece and Portugal. It fell in France, Ireland, Italy and the Netherlands. All over the Euro-zone there is a growing awareness that the recent sharp falls in stock markets will have a negative effect on the wider economy. Consumers' expectations about the general economic situation worsened and fears about unemployment are mounting. Her comments also coincided with the leak of a draft report from the EU's Court of Auditors, which confirmed that the accounting system had obvious risks because of a lack of security of its computer system and other accounting failures. The Court of Auditors has been warning about problems at the heart of the accounting system since 1999 and repeated its criticisms in the annual report for 2000. --------------------------- ANTI-NATO INFORMATION LIST ==^================================================================ This email was sent to: archive@jab.org EASY UNSUBSCRIBE click here: http://topica.com/u/?a84x2u.bacIlu Or send an email to: [EMAIL PROTECTED] T O P I C A -- Register now to manage your mail! http://www.topica.com/partner/tag02/register ==^================================================================ |
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