An Aromatic Conspiracy
October 12, 2006 by Ken
Filed under A solution in search of a problem
It is heartening to learn that at last the EU anti-Fraud squad OLAF is about to do something about the endemic Fraud in the European Union.
Some point from Ashley Mote`s Letter to Lord Radice, chairman of the House of Lords sub-committee investigating EU accounts
The Court of Auditors (CoA) admits that 80% of all taxpayers money is never properly accounted for
The EU admits to having 662 bank accounts in 45 different countries. It admits some of them are offshore, but refuses to say how many, where they are, or why they are there. It also admits to having “dealings with” another 214,000 bank accounts across the globe. 416 of its accounts are imprest accounts, which means the recipients of public funds can draw down the money on their own signatures. According to Mr Barroso, the president of the commission, all imprest accounts can be and are audited by the EC’s own Court of Auditors. The CoA is adamant they are not audited because the funds are then outside its remit
In 2004, some 9400 cases of fraud were reported. Yet in the seven years of OLAF’s existence there has been no successful conviction of any major wrongdoer and funds recovered. Indeed, recovery of public money from scams is derisory.
One of the EU’s financial regulations (2342/2002, Article 87 (4)) says there is no need to attempt recovery of any sum less than a million euros. There is clear evidence of this loophole being ruthlessly exploited.
With the help of expert forensic accounting analysis, we now know much more about the way the EC manages its finances. Massive annual cash surpluses, which were supposed to be returned to the member states, have routinely been hidden by the use of three unlawful accounting strategies.
The first involves retrospective adjustments of the annual accounts anything up to two years later. Example: 750 million euros-worth of sundry debtors simply disappeared off the accounts between 2002 and 2003, of which 663 million were cash advances to ‘financial intermediaries’.
making and later amending unspecified ‘provisions’ on the balance sheet.
recording billions of euros-worth of pension liabilities on both sides of the balance sheet. This grossly distorts the accounts. It also means the member states are liable to fund the generous pensions of 39,000 past and present Eurocrats twice over, having already paid for them
routine practices of the EC are also highly irregular. Advances are treated as expenditure, and loans which disappear are written off.
There is no paper trail recording transactions, agreements, commitments, payments, receipts or evidence of delivery of the goods or services paid for. Inconvenient information is deleted from the records – reports simply disappear.
The introduction of double-entry accounting on
There is no central check on the authority of officials making payment orders. There is no central list of authorised officials entitled to make payments from the commission’s bank accounts. Nor are any security checks made on counter-signatories either concerning their level of authority or even their physical existence.
But now at last after many years of no action OLAF is about to make its move, on Tuesday Reuters announced that EU fraud busters have been quietly working behind the scenes collecting evidence, OLAF it appears has developed new intelligence tools for a more efficient fight against fraud.
And is now about to launch its fight back against fraud, yes OLAF has now extensively analysed all world trade flows of Chinese garlic and is about to begin actions against Chinese Garlic smugglers.
Wow I am so excited!
Technorati Tags: OLAF, EU Fraud
