The European Union's anti-corruption agency OLAF has its work cut out for itself, with the EU facing accusations that fictitious employees received bonuses. Is OLAF up to the challenge?
Getting corruption culprits behind bars is a long process; OLAF can only investigate
European newspaper headlines recently screamed: "Self-Service Shop" or "Extra-Pay Jungle at the EU" -- referring to announcements last week that EU parliamentarians may have arranged for excessive bonuses for their office assistants. A confidential EU report also said that salaries may have even been paid to fictitious assistants.
The accusations primarily center on the supposed misappropriation of office allowances. Each of the 785 EU parliamentarians has around 16,000 euros ($23,800) per month at his or her disposal to pay for up to four employees. Assembly members choose their own personnel and submit the work contracts to the EU Parliament's administrative services.
How many black sheep among the EU parliamentarians?
Random controls of 167 payments revealed some discrepancies, which the anti-corruption office OLAF is to investigate. The analysis could take months, a spokesperson for the agency said.
The agency has a great deal of freedom in its investigations when EU parliamentarians are directly involved, and can even order office searches. The problem is that cases which are supposed to remain confidential are often revealed to the press. The risk of collusion is therefore great.
OLAF in the shadows
OLAF is not well known among the public, although it acts much like a task force to combat tax fraud on the EU level. With its own annual budget of 50.2 million euros, the agency was able to recover more than 450 million euros in 2006. Agency officials estimated that they have been able to recover around 7.3 billion euros in tax money since OLAF was founded in 1999.
Franz-Hermann Bruener, head of OLAF, is pleased with the agency's track record, and said he would rate its success at seven on a scale of one to 10.
Political scientist Florian Neuhann, who has written a paper on the agency, agreed, calling the agency a "major success," particularly in comparison to its chaotic predecessor UCLAF.
Franz-Hermann Bruener, head of OLAF
The agency investigates between 400 and 500 cases each year. Around 15 percent concern corruption crimes, such as the recent charges of misappropriation of office funds, in which EU assembly members are themselves the culprits. The other 85 percent are crimes of fraud, such as "garlic smuggling."
In such cases, inexpensive Chinese garlic has been declared as a Greek product, thus allowing vegetable wholesalers to avoid having to pay import tolls. According to OLAF, those involved have managed to evade around 60 million euros in tariffs since 2002. Importer companies are normally behind such crimes.
Textiles and shoes imported from China are handled in a similar way, the agency said.
OLAF cannot prosecute
OLAF has existed since 1999
However, OLAF's powers are limited, said Neuhann, particularly when it comes to investigations.
"The agency's success depends on the cooperation of the member states," he said.
EU members are not required to further investigate information which OLAF has passed on to them, and initiate criminal proceedings.
A prosecuting attorney on the EU level could help OLAF boost its authority, but that is still a dream of the future, Bruener said.
Still, the new Treaty of Lisbon -- the EU's recent reform treaty -- mentions the possibility of creating such an EU-wide prosecuting attorney's office should all members agree.