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Complaint to EU Ombudsman
Jacob Söderman: an exclusive JUST Response report from
the Dougal Watt Dossier 'Whistleblower' Robert Dougal Watt speaks out
Mr Jacob Söderman
Ombudsman European Parliament
c.c. Members of the European
Parliament
Staff of the European Court of Auditors Subject: Submission in respect of Decision 1999/352/EC Article 2(1)(b) I wish to bring to your attention certain matters concerning the conduct of my employer, the European Court of Auditors, which I believe to be of public concern ...
…The key to the undermining of the sound
running of the institution has been nepotism; engaged in by several Members of
the Court, over a period of many years. Members have secured the
employment by the institution, even on posts reserved for permanent staff, of
family, and family members of friends. These individuals had no previous
knowledge or experience of audit, prior to arriving in the Court.
The number of such appointments is small, and in
itself does not have a significant impact on the institution’s
effectiveness: indeed, certain of these individuals have subsequently passed
recruitment competitions on their own merits; and their privacy should be
respected.
The impacts of nepotism on the internal processes
of the institution, however, are fundamental and far-reaching. Such
nepotism is common knowledge among staff: and the personal staff (i.e.,
“cabinets”) of the fifteen Members account for 10% of the staff of the
Court.
Employment contracts are formally authorised by
the Court’s administration. Considered together with other Members’
tacit endorsement of nepotism, this means staff at all grades recognise that
the hierarchy of the institution is fundamentally compromised. In
essence: If Members will engage in, or tolerate, nepotism – what abuse
will they not commit, or tolerate, if it is in their personal interest?
And since the Administration has been complicit in this nepotism: What
abuse will the senior personnel of the Administration not commit, or tolerate?
The unscrupulous nature of Member appointments,
suggests the likelihood of tolerance of questionable practices in other
activities of the Administration.
The net effect of a number of initiatives
undertaken by the Head of Administration with regard to “C” grade (i.e.,
secretarial) personnel – such as, reclassification of the posts of officials
serving in cabinets as “temporary”, rather than permanent; and cessation
of recruitment of permanent staff – has been to maximise the number of
vacant posts available for the employment of temporary staff. The place
of origin of a disproportionate number of such staff is northern Lorraine.
This is also, coincidentally, the place of origin of the Head of
Administration.
It would seem that allowances have been paid by
the Administration, to which Members are not entitled.
For the auxiliary/temporary staff thus recruited,
the precarious nature of their employment by the institution gives rise to a
heightened vulnerability to abuse by the hierarchy.
Some years ago, a C grade temporary member of
staff reported with distress to the Secretary General that she had been
propositioned by the Head of Personnel; who had allegedly promised she would
receive a renewal to her employment contract, in return for certain favours.
The Secretary General enquired; the Head of Personnel denied the allegation.
The temporary agent’s employment contract was not renewed.
In 2000, another C grade temporary member of staff
presented a similar complaint to the Secretary General. The latter
enquired; the Head of Personnel admitted the charge. The Court’s
disciplinary procedure was not invoked. The temporary agent’s contract
was not renewed.
The integrity of the audit processes of the
institution have been similarly undermined. The affair of Edith
Cresson’s dentist may have come as a surprise to most in the Community, but
rumours of questionable employment practices in the Commission had been
circulating among Court auditors before Mr Van Buitenen brought such matters
to the attention of the Parliament. However, the initiation of an audit
enquiry requires Member-level approval. No such approval was
forthcoming.
In one instance, follow-up of a query received by
the Court from an environmental consultancy agency via telephone revealed that
the UK Ministry of Agriculture was applying a specific “rule” on farmers
claiming support from the Community’s arable aid scheme; i.e., that field
margins should be no more than two metres wide, failing which, hectarage-based
aid deductions should be made. This “rule” was based on a written
criticism delivered by the Court, in respect of earlier British procedure.
Implementation of this “rule” had encouraged farmers to dig out
wildlife-rich hedgerows, at the same time as the Community’s
agri-environmental aid scheme was encouraging farmers to plant hedgerows.
Follow-up also revealed that when the Court had presented this criticism to
the Commission, the latter had challenged the Court’s interpretation of
Community legislation. The Court had withdrawn its criticism. But
nobody told the British authorities; which, in good faith, have subsequently
applied vigorously this fictitious “rule”. This fact was brought to
the attention of the hierarchy. The hierarchy observed that the query
did not emanate from the British authorities, and had not been submitted in
writing. No response to the query was given.
It may be deduced that, in general terms, Member
States are aware of the internal abuses in the Court. Since the Court
was established, posts have been reserved by the Court to receive on temporary
secondment a senior auditor on detached service from each of the national
audit institutions of Europe.
It is to be regretted that effective action was
not taken at the time, in respect of allegations presented some years ago by a
then senior official of the Court. The institution’s response was to
pressurise this individual into mental incapacity, and to dismiss him.
Although the abuses identified above concern personal and individual failures, it is important to emphasise that these derive from structural weaknesses. These structural weaknesses give rise to conditions where opportunity exists for such abuse to take place. The purpose of audit is to secure financial accountability. In the context of stewardship of public money, financial accountability underpins democratic accountability. In the institutional frameworks of most Member States, this logic determines that national audit bodies serve their national parliaments; and those parliaments rely on the impartial, technical service of audit to hold their respective governments accountable.
The Community framework does not follow this
logic. The European Court of Auditors is a sovereign institution.
This means that the Members of the Court – the guardians of accountability,
the collective “financial conscience” of Europe – are, themselves,
unaccountable. Quo custodes custodet?
Whilst the Treaty specifies that the sovereignty
of the Court resides in the College (i.e., the fifteen Members, acting
collectively), in practice most of the responsibilities of the College are
devolved to individual Members, leading audit divisions. So although
institutional authority resides in the College, intra-institutional power
resides in the individual Members.
The career progression of the permanent officials
who serve the Court at senior grades (A3 and above) is directly determined by
the Members. The career progression of all other staff is determined by
Directors (A2), who themselves report directly to Members. Unlike many
organisations, which delegate the task of staff appraisal to the appraisee’s
immediate line manager, in the Court it is the senior hierarchy which
appraises staff. This system has been a matter of contention to many
staff, for many years. As in any organisation, the performance appraisal
system has a major impact on staff behaviour. The general and
far-reaching effects of this system, if compared with that of a “line
manager reporting” system, are: to increase the power of the senior
hierarchy; and to reduce the importance which the institution attributes to
the cases of abuse of junior staff.
Nepotism by Members, even though it has only ever
been actively engaged in by a minority, has two related impacts, in terms of
staff perceptions and consequent behaviour. Although it reduces the
moral authority of Members, and undermines their capacity to lead, it actually
increases the day-to-day power of all Members. That is: if one
Member can “get away” with nepotism, then every Member can reasonably be
anticipated to be able to “get away” with anything. This means that
senior personnel must prioritise, to an abnormal degree, the satisfaction
which they provide to Members. Thus, all Members have benefitted from
nepotism.
The small size of the institution increases
further the power of Members. A Commmissioner may have responsibility
for over a thousand staff; a Member of the Court typically has responsibility
for a personal cabinet and an audit division (c.15 staff); around 20, in
total. The devolved nature of the Court’s management structure, means
that within the audit sector (i.e., cabinet plus division) the power of the
Member is unchallenged by other Members. The “balkanised” nature of
the management structure naturally entails administrative conflict and
confusion at the boundaries. This has several notable consequences.
Firstly, since Members have divisional responsibilities, and the negotiation
of such issues absorbs time; in consequence strategic concerns remain
unaddressed. For example, one of the Court’s principal
responsibilities is to report on the “sound financial management” of
Community finances; but no Court guidance has been issued to auditors on how
to audit this subject. Secondly, the need for complex and detailed
procedures to mediate boundary conflicts, increases the administrative burden
of the institution. And thirdly – the key point, with regard to the
propriety of internal management – the above realities mean that in
practice, and to a degree more pronounced than in most public organisations:
key decisions are routinely communicated on a person-to-person basis, with
important instructions transmitted orally. In consequence, internal
accountability is minimised, and the potential scope for abuse is maximised.
Given the above, and with regard to the risk of
impropriety by an individual Member: since external controls upon the Court
are absent, and the Court’s internal control environment is very weak –
there is consequently a high inherent risk of abuse.
I trust the motivation behind the transmission of
this letter is evident from the manner in which it is written. I affirm
I act in the public interest… I submit that it is not I, which is the
rebel here against the institution, or the Treaty; but that it is the
individuals placed in the positions of highest authority, who have acted in a
manner inconsistent with their responsibilities, to the institution and to the
Treaty [...].
I therefore, and with all due respect, suggest:
1. the resignation of the fifteen current
Members of the European Court of Auditors…;
2. the re-allocation of Member tasks in a manner more consistent with the existing Treaty…; 3. the redesignation of the “temporary agent post” of Secretary General, to that of Auditor General… to reinforce the status of the head of the audit service; 4. the reallocation of current “cabinet” staff…; 5. an enquiry, of a “management consultancy” nature, by the European Ombudsman, so that lessons may be learned for the future; which should be of a scope, depth and scale sufficient to guarantee the protection of individual Court staff responding to that enquiry; 6. the establishment of a permanent framework of oversight of the institution, to provide assurance to the Budgetary Authority and the citizens of Europe as to its sound running – e.g., an audit committee, empowered and resourced to interview staff and examine internal procedures as necessary; 7. the communication of a formal statement of regret by the Court to the victims of abuse by the institution, accompanied by appropriate restitution: i.e., the restoring to proper grade and status of a former A3 probationer, dismissed without good cause; the payment of compensation to a former official, driven into incapacity by the impropriety of the institution; and the payment of compensation to the auxiliary/temporary-agent victims of abuse referred to above.
For your information, I have entered my
candidature for membership of the institution’s Staff Committee. The
ballot is secret, and all staff of the institution are entitled to vote.
If elected, at the first meeting I will resign from the Committee. The
purpose of my candidature is to provide you with an opportunity to gauge how
representative and reliable are the remarks made above, in the perception of
the staff of the Court. Given the current conditions prevailing in the
institution – a management which is arbitrary, and lacking in respect for
due procedure – it is only rarely possible for staff concerns to be
articulated without fear of reprisal. The occasion of a secret ballot
offers such an opportunity. If not elected, I will resign from the
service of the Court. [One week later, on April 29 2002, Mr Watt was duly elected, having gained the second-highest number of votes. - Ed.]
R Dougal WATT
Auditor Staff Number 43062
22 April 2002
Note: This report was published for the first time by JUST Response on September 27 2002.
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