In March, the European Parliament proudly inaugurated two new Brussels buildings, needed to house the ever-expanding travelling circus of members, assistants and bureaucrats. But the Parliament is less happy to talk about some of the financing arrangements behind the buildings’ construction.
The Parliament leases the buildings, known as the Willy Brandt and József Antall buildings. It signed in 2004 a whopping €284 million deal with a Belgian developer which, shortly before, exercised an option to buy the land on which the buildings now stand. Under the deal, the developer was to raise the finance to fund the construction.
Because of this, according to the Parliament, a public procurement process was not required for the financing bids. The developer oversaw it all, soliciting bids for the financing under which the buildings would be constructed, leased and eventually sold to the European Parliament. This is rather like buying a house and asking the seller to arrange the mortgage for you. Whose best interests will the seller look after?
The Parliament has so far refused to release documents related to the deal. Many documents are held by the developer, and, the Parliament says, cannot therefore be made public. However, the Parliament holds a report, done by KPMG, on the financing bids assembled by the developer. But the Parliament will not release this either, citing commercial confidentiality.
The EU Ombudsman has now weighed in, saying the Parliament should release the report and other documents, or “give convincing explanations for not doing so” — the implication being that explanations so far have not been convincing. Will the Parliament clear up these muddy waters? It has until October 31 to respond to the Ombudsman.
[A version of this article was published in Private Eye magazine].
#1 by Alphast on October 11, 2009 - 10:53 am
Doesn’t really surprise me. The EP has always been very vocal in asking other institutions to be transparent and always very silent (and reluctant) when asked to do the same.
I think all buildings, sessions and so on, of the EP should take place in Strasbourg so that the ridiculous circus of the shuttling with Brussels stops. The EP does not need to be in Brussels at all. Numerous other EU institutions function perfectly while sitting in completely different countries. This whole thing is a complete waste of tax payer money. I would add that at a time when major global companies use electronic communications to avoid massive traveling costs, the EP could invest in a couple of video conferencing rooms and get on with this.
#2 by Marjory van den Broeke on October 12, 2009 - 9:52 am
Whereas it is correct that the Ombudsman has asked the European Parliament to provide more justification for not releasing certain documents, there are a number of statements in this blog which need correcting. The most important of those are the fact that the European Parliament was not allowed by the Council to take out a loan as it does not have legal personality. Another point is that nevertheless, Parliament urged the developer to use a procedure as similar as possible to a tender procedure.
#3 by Slim K on October 12, 2009 - 10:44 am
I see little value in having teh financin g data. We know what EP is paying the developer (who is it?). How much the3 developer pays to his bank is none of our business.
However, as the taxpayer has given the banks loads of cheap money, it should get cheap rates in return. I rather suspect that this is not the case.
#4 by bki on October 13, 2009 - 2:26 pm
The EP should just be based in Brussels period. MEPs have even asked for this directly, but sadly, due to the french paranoia and ideas of grandeur parliament has to go to to strasbourg where is there is nothing and wastes millions of euros every year. Of course parliament has to be in brussels, it’s the capital of europe.
#5 by Poustis on October 13, 2009 - 3:14 pm
I’m all for the parliament having some of its sessions taking place in Strasbourgh as long as the French goverment pays for all the expenses it involves and the unnecessary CO2 emissions.
#6 by Slim K on October 14, 2009 - 10:15 am
Just wanted to add – what we know about this deal is no thanks Mr Gardner. For reasons known onlyt to him, he does not include hard data in his opinion. This is a shortcoming and a mistake that needs to be corrected.
And – Strasbourg is a nice small town, shame about the hotels. However, the Parliament should be in Brussels with other institutions.
#7 by S Gardner on October 15, 2009 - 4:13 pm
Slim K — you say you see little value in having the financing data. I hope you don’t take this approach if you buy a house! To buy a house you might go to the bank for a loan, and you could end up with an expensive loan, or you might get a good value loan that doesn’t cost you so much. Obviously it is in the interests of the bank to persuade you to take out an expensive loan. We don’t have the financing data in this case, so how can we know if, when this deal was done, the taxpayer got good value from it? It is after all the taxpayer that pays in the end, and a major institution like the EP should be looking out for the taxpayers’ interests, rather than doing deals that it then refuses to be transparent about (though I realise in this case there were elements outside the Parliament’s control).
#8 by Alfonso on October 29, 2009 - 2:00 pm
It does not need to be in strasbourg, also. If council and commission are in Brussels, I think the parliament should also.@Alphast