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'Whistleblower' Robert
Dougal Watt
responds to House
of Commons Public Accounts Committee letter
Mr Nick Wright
Corruption in the European institutions and the
role of the National Audit Office
Thank you for your letters of 11 February and 19 March 2003, concerning the above.
With regard to the substance of your
responses, I am puzzled. In particular, I note your repeated insistence
that fraud investigation “is the responsibility of the European Anti-Fraud
Office (OLAF)”.
I have not suggested otherwise. But what I have alleged, and what I have provided the Committee with supporting evidence of, is that OLAF does not do its job. I have also indicated my willingness to provide further information, in respect of this and the other matters raised in my correspondence; an offer which neither you nor members of the Committee have pursued.
Corruption in the European Court of Auditors
In normal circumstances, one might expect the
European Court of Auditors to identify material failure within OLAF; but I
have also alleged, and have provided the Committee with supporting evidence
thereof, that the Court does not do its job. I have alleged the Court is
corrupt – as is demonstrated by the impending prosecution of a former Member
and her associates then in the Court’s employ, on allegations of fraud,
nepotism and soliciting bribes for jobs. Two hundred and five of my
colleagues endorsed serious allegations against the institution, in a secret
ballot organised by the Court itself. Given the key role which the Court
plays in safeguarding taxpayers’ money spent by “Europe”, I am perplexed
by the Committee’s lack of interest in such corruption.
As I understand it, the Committee obtains
assurance as to the legality and regularity of British money spent by
“Europe”, from the work of the Court; verified as appropriate by the UK
National Audit Office, via the report on Court activity which it presents each
year to the Committee. But the evidence which I have presented to the
Committee indicates that fraud and corruption flourished unchecked in the
Court, for several years; and the NAO, for whatever reason, failed to report
it.
It is, of course, the Committee’s privilege to
continue to disregard the material abuses which I have brought to its
attention. It is the Committee’s privilege to disregard the risk that
other material abuses may have been committed, beyond my specific personal
knowledge; I am only one of c.200 auditors in the Court. It is the
Committee’s privilege, to disregard the risk that further material abuses
will be committed in the future – after I have been sacked, and my
colleagues have learned how pointless it is to risk their careers for the
public interest. I also recognise that it is the Committee’s privilege
to choose the subject areas of its detailed examinations; and consequently, I
recognise unreservedly the Committee’s entitlement to conclude that the loss
of British taxpayers’ money by the EU – through fraud, corruption,
cover-up, impropriety, indolence, and institutional abuse of power – are
matters insufficiently important to merit the interest of the Committee.
My duty, as a public servant, and as an accountant trained at the expense of
the British taxpayer, is limited to informing the Committee of the magnitude
of the risks which they are running, with regard to protecting past, present
and future British public funds.
Since your letter of 19 March 2003 concludes,
“The Committee is unable to be of further assistance in this matter”; so
consequently I am obliged to conclude – and I stand to be more adequately
informed – that the Committee cannot even identify to me the appropriate
British authority to which I should address my concerns. In this
context, I have also raised such concerns in writing with the House of
Lords’ Select Committee on the European Union. Just two years ago, the
Lords published a vigorous critique of the Court, in a report bluntly
entitled, “The European Court of Auditors: The Case for Reform” (Twelfth
Report, April 2001). To research this report, the Lords visited
Luxembourg, and spoke with Court auditors. The Lords subsequently
concluded that “radical surgery” was needed to “increase confidence in
the European Court of Auditors”. The report recommended,
“strengthening the independent and professional nature of the audit
function”; and concluded that “radical reform” was necessary to endow
the Court “with an entirely professional and truly independent executive”.
The Lords even went so far as to suggest that, “the time has come for an
external management audit of the European Court of Auditors to help determine
how appropriate its structures are as it enters its second quarter century”.
Strong words. But I have received no response from the Lords to my
correspondence.
Corruption in the European Commission
More than a year after I “blew the whistle”; I
am the only individual to be interviewed by OLAF with regard to my
allegations. And then, only once. I was recently informed by the
OLAF inspector charged with following up both my allegations against the
Court, and those in respect of the “Quatraro Case”, that he has been busy
on unrelated enquiries; that he is reading documentation; and that he has yet
to decide whether he needs to interview anybody else.
In a letter passed to OLAF in June 2002, I
identified a key file held by a Court official as being vulnerable to
destruction, and a key witness at risk of intimidation. Six months after
receiving my letter, OLAF had yet to ask for the vulnerable file, and had yet
to speak with the vulnerable witness. OLAF’s performance is a parody
of serious internal investigation. Why should it take more than a year
to verify that the institution employed the unqualified daughter of the former
boss of the Italian Member of the Court, Mr Clemente? Why should it take
more than a year to verify that the institution created a permanent post, over
and above his normal, two-job “grace and favour” allocation, for temporary
occupation by President Fabra Valles’ former personal assistant?
I note that OLAF has as much to gain from
investigative delay, and from my prompt dismissal, as does the Court. My
dismissal will convince every European official that it is pointless to report
any wrong-doing by OLAF. Nobody will listen, and only the whistleblower
will suffer. If you need third party evidence of how the EU fails to
deal with internal irregularities, I suggest you read Paul van Buitenen’s
book, “Blowing the Whistle”. Furthermore, Mr van Buitenen has since
submitted evidence in support of literally hundreds of allegations of internal
irregularity. Only a handful are being followed up by OLAF; and these
safely relate to the already-discredited Santer Commission.
In normal circumstances, one might expect the
European Parliament to respond to such material failure by the Court and OLAF.
But I have also alleged, and have provided the Committee with supporting
evidence thereof, that the hierarchy of the European Parliament has shown
public interest in neither OLAF nor Court failures which have taken place, and
which I have brought to MEPs’ attention. Although my allegations have
resulted in an “internal enquiry” by the Court, at the demand of the
European Parliament – the results of which I understand have been privately
passed to the Parliament’s Budgetary Control Committee – yet that
Committee’s members neither acknowledge my contribution, nor protest the
Court’s vindictive pursuit of the “whistleblower” who gave rise to that
internal enquiry. I have not been informed by the Court of the existence
of that “internal enquiry”; I have not been asked to contribute to it; and
I have not been informed of its results. This reveals the shallowness of
the Court’s commitment to self-policing and transparency.
An examination of the mishandling of the “Quatraro Case” reveals a catalogue of material failures in the performance of the inter-related EU systems of administration, internal control, external control, fraud investigation and political oversight. The European Commission harboured a major fraud on EU funds; and then failed to investigate it properly. UCLAF failed to follow up evidence of a wider conspiracy of corruption; and then hid the inconvenient facts. OLAF continued to maintain the UCLAF “line”; even though current OLAF personnel heard Dr Quatraro testify in 1993 that others in the Commission were involved in his corruption. The hierarchy of the European Parliament was misled; and has responded with public indifference to the information that it was misled. The Court of Auditors failed to identify the “whitewash” in 1993; refused to reconsider its verdict even when new evidence inconsistent with the OLAF version of events came to light; and in 2001, its President failed to respond to my internal allegation that information pertinent to a murder enquiry was not being followed up, neither by OLAF nor by my superiors. All of the above is demonstrable. Therefore, your insistence that fraud investigation is an OLAF matter, constitutes a wholly unconvincing response to the serious matters which I have raised. National Audit Office awareness of Court corruption
I reiterate that the NAO had a corporate knowledge
of corruption in the Court. NAO seconded staff in the Court certainly
knew about nepotism, and other abuses which were known about widely.
More than two hundred of my colleagues endorsed my
allegations; yet not one has since publicly supported my allegations “on the
record”. As Paul van Buitenen found in 1999; staff are simply too
scared to speak out. They can see how the institution has treated me;
they can see how OLAF has failed to actively pursue my allegations; and they
can see how little interest in their situation has been shown by the European
Parliament. There is no incentive to reveal wrong-doing in the European
institutions, other than the self-knowledge of having served the public
interest. To date, the only individual who has suffered financial
penalty in consequence of my revelation of serious impropriety – is me.
The Court stopped my pay, while I was on certified sick leave,
October-December 2002.
My practical observation with regard to the
NAO’s knowledge is this: NAO ex-secondees to the Court are the only people
who can currently bear witness to the history of Court corruption, without
fear of reprisal. NAO ex-secondees to the Court risk no financial
penalty, if they are permitted by the NAO to bear witness to the situation in
the Court during the periods of their secondment. In contrast, EU
“whistleblowers” risk their pension entitlements, and future job
prospects, as well as their current employment. At least one NAO
Director, and two Audit Managers, were in sufficiently senior positions to
have a good knowledge of the true situation in the Court.
I regret that the closing paragraph of your letter
of 11 February 2003, which records a thunderous series of denials by the NAO,
is based upon some fundamental misunderstandings of my letter of 17 December
2002. The NAO has denied accusations which I did not make. As we
are agreed, the NAO’s report, even at the draft stage, never featured
criticism of MEPs’ entitlements. But in respect of one key accusation
which I did make, I have not received a response. My letter of 17
December 2002 noted, “On 5 May 2002, Mr Ahmed wrote another article –
headlined, ‘Europe squanders billions spoiling MEPs’ – again based upon
pre-release NAO report information”. Since the NAO flatly denies
briefing Mr Ahmed, this begs a question: from what source did he obtain
knowledge of the forthcoming report? Furthermore, the “Observer” is
a respected newspaper, and Mr Ahmed a respected journalist; what source misled
him to understand that the NAO’s report would feature “devastating”
criticisms of MEPs’ entitlements?
During my time at the NAO, internal controls over
advance copies of forthcoming NAO reports were strict; such controls protect
the privileges of the NAO’s main “customer”, the Public Accounts
Committee. Even when advance copies of forthcoming reports are presented
to third parties, it remains the NAO’s responsibility to ensure that the
confidentiality of those reports is maintained prior to publication. It
follows from this, and from the NAO’s denial of having itself briefed Mr
Ahmed, that the NAO should know who leaked the report. There is, so far
as I am aware, only one other potential source. It is normal NAO
practice to provide an advance copy of any forthcoming report to the body
which is the subject of that report; in this case, the European Court of
Auditors. Specifically – since the NAO report was based upon
information given to visiting NAO personnel by his personal staff – protocol
would have required the NAO to provide an advance copy to the cabinet of the
British Member of the Court. Was this the source of the “leak”,
which inaccurately cited the NAO as about to reveal “devastating”
criticism of MEPs’ perks, published on the same day that my appeal to MEPs
to fight corruption in the Court reached the public domain? And is the
Committee content for “Observer” readers to be (mis)informed of the
contents of forthcoming NAO reports, before such reports are made available to
the Committee?
A personal note
I am publicly estranged from my institution; and I
am the only official bearing witness to a cover-up, involving the “unsolved
murder” of a senior administrator in a case which is linked to the mafia.
In 2000, I was part of an audit team visiting Italy, further to an enquiry by
the European Court of Auditors into the financial management of EU tobacco
subsidies. In Rome, while off-duty, our team was under surveillance by
person or persons unknown, who had knowledge of our official agenda.
Furthermore, after the visit to southern Italy, the Court wrote to the Italian
authorities, complaining of the “menacing” presence during audit
discussions of unidentified third parties who seemed to intimidate auditees.
In 2001, following a further visit, the Court informed the Italian authorities
that tobacco industry representatives had told auditors that the mafia derived
an annual benefit of c.EUR 60 million from the tobacco market in southern
Italy. And although investigation of the “Quatraro Case” found
documentary evidence of substantial fraud there were, remarkably, no
prosecutions. It may be assumed that powerful interests would be less
than happy for the matters which I have raised to be independently examined.
Mine is not a comfortable position.
Conclusion
I respectfully invite the Committee to re-consider
what the catalogue of material failure which I have brought to its attention
reveals about the EU institutions’ general willingness, let alone general
ability, to discourage, detect and investigate fraud. With all due
respect, I submit that the Committee can best and most safely discharge its
responsibilities to British citizens and taxpayers, by proposing to HM
Government that a transnational public enquiry be held into corruption in the
Court, and into the related matters which I have raised.
Yours sincerely,
R Dougal Watt, CPFA
30 April 2003
1A, Rue de Kirchberg, Weimerskirch, Luxembourg,
L-1858. Telephone: ********
c.c.: Members of the Public Accounts
Committee
Note: This letter was published for the first time as part of an exclusive report by JUST Response on May 7 2003.
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