Posts Tagged irregularities

Corporate welfare gone mad

Posted by Stephen Gardner in EU Insider on July 7, 2011

Visitors passing through London’s Heathrow airport on the way to next year’s Olympics can no doubt have confidence in the airport’s security systems. But they might be surprised to learn that, courtesy of a European Commission grant, they will be subsidising their own surveillance, and that they will be watched by an Israeli firm that provides monitoring systems for the West Bank separation barrier.

The Olympics will provide a live test for a “Total Airport Security System” (TASS), backed with an £8 million EU grant from research spending. The project promoters give little detail, but say that different scenarios will be tested at Heathrow, involving “integrating and fusing different types of selected real-time sensors and sub-systems for data collection in a variety of modes”.

The TASS consortium includes Britain’s airport operator BAA, which is obviously in need of an EU hand out, having made a £200 million loss last year. But the lead roles are being taken by firms from Israel, not an EU country at last checking. VERINT Systems (Israel) will coordinate, while surveillance know-how will be provided by Elbit Security Systems. Elbit’s supply of Big Brother cameras to the West Bank wall have led to it being dropped as an investment by some pension funds, and the Commission itself considers the separation barrier illegal where it is built on Palestinian land. It is worth noting that intellectual property created in the course of EU research projects (eg new surveillance systems) remains the property of the firms involved, so in theory EU money could pay for development of systems that will ultimately be planted atop an illegal wall and used to keep an eye on the Palestinians!

Considering that the TASS project will result in a high-tech system that can profitably marketed to airports around the world, it is unclear why the Commission needs to dole out this corporate welfare. Defence giant BAE Systems is also taking part, being clearly unable to fund research and development from its £1 billion 2010 profit. BAE is separately involved in 12 similar EU research projects, funded with another £71 million in taxpayers’ cash.

The TASS project website is here: http://www.tass-project.eu/

A version of this article was published in Private Eye magazine.

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Convicted MEPs

Posted by Stephen Gardner in EU Insider on July 22, 2010

Andrea D’ambra, a campaigner from Italy, is trying to get MEPs with criminal convictions booted out of the European Parliament. He has even set up a Facebook group. He lists three Italians, Vito Bonsignore, Aldo Patriciello and Mario Borghezio as having various convictions for “serious criminal offences relating to corruption charges, discrimination and illegal financial practices.” To this we can add Jean-Marie le Pen (various hate crime convictions), Bruno Gollnisch (Holocaust denial), Nick Griffin (incitement to racial hatred) and Andrew Brons (breach of the peace, OK not exactly crime of the century).

How many MEPs with criminal convictions are there? Which country has the most? We should be told! Give me names (current MEPs only; Ashley Mote and Tom Wise are history).

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Question marks over EP new buildings deal

Posted by Stephen Gardner in EU Insider on October 9, 2009

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].

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Structural funds cashback

Posted by Stephen Gardner in EU Insider on July 16, 2009

The European Commission yesterday (15 July) rather quietly slipped out its 2008 report on protection of the European Communities’ financial interests – in other words an assessment of whether or not the money is going to the places it should be going to. Last year there was a press release and announcements in the midday press conference. This year it was all a bit hush-hush, with a small mid-afternoon briefing attended by just a handful of hacks.

Is there something in there this year they want to hide, I wonder? Well, if so, I haven’t found it yet. The report itself is a digestible 30-page affair, but it is accompanied by two hefty annexes that will take a while to chew through.

Figures on Structural Fund irregularities make interesting reading though. These are sums of money committed to projects by authorities in member states, that later realise they shouldn’t have committed them. This can be for many reasons: incorrect paperwork, projects that later turn out not to be eligible, simple mistakes. “Irregularity” can also cover fraud, though this is only demonstrated in a very small number of cases.

Once member states spot an irregularity they are first required to tell the Commission, then they must get the money back. This is where problems start. Getting the cash back can take time, but if member states fail to recover it within two years, they must pay the money back to the Commission anyway, and the taxpayers of the country in question end up footing the bill.

So one could argue that member states have an interest in declaring a relatively low “irregular” payments amount, so that they are less exposed to losses later on. This certainly seems to be the case with France, which consistently declares unrealistically tiny numbers: for the Structural Funds, €4.6 million in 2007, and €5 million in 2008.

Compare this with 2008 figures for Germany (€20.9 million), the Netherlands (€28.7 million) and Italy (€74.9 million). Either the French are amazingly good at dotting the i’s and crossing the t’s on EU-funded projects or there is some under-reporting going on somewhere.

However, if a low number for irregular payments indicates competence on the part of the member state authorities that manage EU funds, then the champions of incompetence must be the British (though of course one can also argue they are most rigorous in declaring irregular payments). In 2007, for Structural Funds, the UK declared €161 million of irregular payments (more or less 10 percent of the UK’s Structural Funds pot for that year). In 2008, the figure was €123 million.

The UK has form for “significantly higher” than normal error rates in Structural Fund payments, especially when it comes to paying authorities in the north of England. Last year, for failings in the north-west of England, around €25 million had to be paid back to the Commission.

Surely there is a case here for some cross-border good practice exchange that will deepen EU integration: send the Mancunians and Liverpudlians to Paris for a bit so they can learn how it should be done!

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