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Thread: EU budget fraud may be much larger than reported

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    Default EU budget fraud may be much larger than reported

    Interesting report from the House of Lords, suggesting that EU budget fraud may be up to 12 times larger than officially accounted, due to a "lack of enthusiasm displayed by the member states in reporting fraud" and a "lack of uniformity in the definition of fraud" in the 80% of EU money they're responsible for managing.

    The suggested figure is "up to €5 billion", compared to the €400 million or so reported by OLAF. The lack of action by member states prevents efforts by the Commission to grasp the full extent of the problem.

    Report available here: http://www.publications.parliament.u...om/158/158.pdf

    The report is just a wee bit critical of the UK's approach, both to fraud within its own management of EU funds:

    The UK Government assured us that they take all fraud, including fraud against the EU’s budget, very seriously but we were unable to ascertain whether any Government department or agency in the UK takes overall responsibility for this issue. No one was able to tell us with any confidence how much known EU fraud is perpetrated from within these shores, despite the fact that the individual Member States are required to tell the relevant EU authorities when they uncover these offences.

    We received evidence of significant levels of VAT fraud, which the Government initially argued was outside the scope of our inquiry.
    and of the attitude to OLAF:

    In our assessment of OLAF’s role in the fight against fraud against the EU’s budget, we found that there are a number of limitations on its effectiveness, such as budgetary restrictions which force OLAF to be selective about the cases of EU fraud that it pursues; or the tangled web between Europol, Eurojust and OLAF which contributes to the lack of a coordinated response to fraud on the EU’s budget. While we are of the view that the decision to prosecute must remain a national matter, Member States must also recognise that if OLAF is seen as a body whose recommendations are never followed up, it will remain hamstrung in its ability to protect the EU’s financial interests.
    but you'd hardly know that from the Telegraph coverage:

    Peers on the European Union Select Committee found fraud against the taxpayer could be up to 12 times worse than Brussels officials will admit.

    The committee said it believes frauds ranging from cigarette smuggling to bribery and corruption "never see the light of day" because the EU has failed to grasp the scale of the problem. This is because some member states are reluctant to report suspected cases and others fall through the gaps of a "tangled web" of EU investigation agencies.
    Last edited by ibis; 18th April 2013 at 10:39 AM.
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    Politics.ie Member Dame_Enda's Avatar
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    When you centralise power in unelected officials, you get more corruption. I know we voted to do this, but we didn't have a crystal ball. (I personally voted no in the last 3 votes and yes in the previous 3).

    The EU is to Irish politics what Israel is to US politics. Criticism is anathema (except in SF and Independents). On a continental scale, this leads to abuses as they know they can get away with it.
    Fair and Balanced

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    The simplest solution is more power for OLAF expanded competence for the court of auditors. The Commission has limited power to actually follow the money into member states but it does manage to claw a lot of the money back through means such as delaying payments until money has been accounted for but a more formal system would be better. Its an area where cash fines for member states makes perfect sense.

    I also don't see the issue between Europol, Eurojust and OLAF. They all work closely together and are coordinated by SCIFA and JHA DG. They all have different manadates.


    The telegraph seems confused . . .what does cigarette smuggling have to do with EU budget?

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    Quote Originally Posted by Dame_Enda View Post
    When you centralise power in unelected officials, you get more corruption. I know we voted to do this, but we didn't have a crystal ball. (I personally voted no in the last 3 votes and yes in the previous 3).

    The EU is to Irish politics what Israel is to US politics. Criticism is anathema (except in SF and Independents). On a continental scale, this leads to abuses as they know they can get away with it.

    Suggestion:

    Read the OP as well as the Thread subject.

    Always helps.
    A demagogue is someone who will preach doctrines he knows to be untrue to men he knows to be idiots.

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    Quote Originally Posted by Dame_Enda View Post
    When you centralise power in unelected officials, you get more corruption. I know we voted to do this, but we didn't have a crystal ball. (I personally voted no in the last 3 votes and yes in the previous 3).

    The EU is to Irish politics what Israel is to US politics. Criticism is anathema (except in SF and Independents). On a continental scale, this leads to abuses as they know they can get away with it.
    Try reading what the OP posted. The complaint by the House of Lords's was that the spending by member states - a decentralised activity - is where the fraud is occurring and it is the member states that are failing in their (decentralised) obligation to control this fraud. The House of Lord's isn't commenting on the central EU institutions at all.

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    Politics.ie Member SilverSpurs's Avatar
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    Quote Originally Posted by ibis View Post
    Interesting report from the House of Lords, suggesting that EU budget fraud may be up to 12 times larger than officially accounted, due to a "lack of enthusiasm displayed by the member states in reporting fraud" and a "lack of uniformity in the definition of fraud" in the 80% of EU money they're responsible for managing.

    The suggested figure is "up to €5 billion", compared to the €400 million or so reported by OLAF. The lack of action by member states prevents efforts by the Commission to grasp the full extent of the problem.

    Report available here: http://www.publications.parliament.u...om/158/158.pdf

    The report is just a wee bit critical of the UK's approach, both to fraud within its own management of EU funds:



    and of the attitude to OLAF:



    but you'd hardly know that from the Telegraph coverage:
    Perhaps the european parliament should refuse to sign off on the budget. It would go some way to showing it can be trusted with increased powers and is not just a dumping ground for failed politicians. Perhaps the EU institutions should hold back future payments etc.
    Nice try anyway ibis to blame everything bad on the member states.

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    Quote Originally Posted by kvran View Post
    The telegraph seems confused . . .what does cigarette smuggling have to do with EU budget?
    Given the hole the member states have left in the EU's budget this year, Barrosso and VanRompuy have had to resort to cigarette smuggling to balance the books.

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    Politics.ie Member Spanner Island's Avatar
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    No sh!t Sherlock...

    I'd only be surprised if it was found that there WASN'T massive fraud going on in the EU with OUR money...

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    http://www.ukipmeps.org/uploads/file...EU_25_5_11.pdf

    The amount of fraud is far greater depending on who's couch your looking behind.

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    Quote Originally Posted by SilverSpurs View Post
    Perhaps the european parliament should refuse to sign off on the budget. It would go some way to showing it can be trusted with increased powers and is not just a dumping ground for failed politicians. Perhaps the EU institutions should hold back future payments etc.
    Nice try anyway ibis to blame everything bad on the member states.
    Please open the report, Ctrl F and type in Parliament. They do a lot with their limited power. When the whole Commission resigned over fraud, it was because of the EP. They're operating in an envirnoment hostile to whistle blowers and large scale fraud investigations. Many MEPs and Member states are generally uncooperative.

    It wouldnt be responsible to freeze funds to numerous organisations and projects. Collective punishment is always wrong.

    Also under current rule you can't freeze a budget, you can stop a new one but the current one would cotinue adjusted for inflation.

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