December 06, 2004

The Return of Feudal Europe

Here is a must read editorial from The Times on EU Corruption. I am compelled to post the whole article by Marta Andreasen (courtesy Brother's Judd) (bold-ing is mine):
There has been much optimistic talk about how the new Commission and the new constitution will reform the European Union. I am not convinced that either will tackle the EU’s most pressing problem: Brussels’s culture of unaccountability and lack of control of its funds.

Opportunities for fraud are open and they are taken advantage of. The most elementary precautions are neither taken nor even contemplated. The reverse is the case. People such as myself who attempt to bring openness and accountability to the system are pursued, suspended and dismissed.

In 2002 I was appointed chief accountant to the European Commission to help — as I then believed — to reform the inadequate systems and stamp out fraud. I drew attention to those inadequacies; I refused to sign accounts that I believed unreliable; for two years I was suspended from my job, obliged to live in Brussels yet forbidden to enter any EU building; and in October I was dismissed, the charge against me being disloyalty, a decision against which I am appealing.

But I do not believe that I was disloyal to draw attention to the failures that leave the EU’s budget completely vulnerable to fraud and error and to propose urgent changes. The National Audit Office found that in 2002 alone there were 10,000 examples of possible fraud in the EU’s accounts. For nine consecutive years the EU court of auditors has refused to sign off the budget. The numbers are huge. The annual EC budget is around 100 billion (£65 billion). The auditors cannot clear 95 per cent of that. We simply cannot tell what is happening to that money; the system does not allow us to say even if the money is well or fraudulently spent.

The primary weakness is a computer system that leaves no trail of changes made on registered transactions. In its last report the court of auditors confirms that too many people can access the system without being authorised. We, the accountants, who are supposed to verify those budgets, are left in the dark. Such a system would not be tolerated in any private or commercial organisation, yet in the EU, it is the standard. These are technical flaws desperately in need of addressing. Yet there are cultural flaws within the Commission that mean they will remain unaddressed.

The Prodi Commission was appointed after their predecessors fell from grace for financial mismanagement. One might have supposed that tackling these problems would have been the primary concern of the Prodi team — but not so. The recently ennobled Neil Kinnock was appointed vicepresident in charge of administrative reform in 2000. He was not then new to Brussels: he had been an insider for five years by then. Here was a wonderful opportunity. But when I joined, I was astonished to find that he had not addressed the problem of the computer system. At first I could not believe it; then I witnessed the state of denial of what the real problem was. The sole action that the Commission took was to proudly announce a new accounting system for 2005. From next year the EU proposes to use Accrual accounting, a worldwide standard. But it will be run on the same computer system that is so vulnerable to fraud.

I do not hold much hope for the new Barroso Commission — which took up its mandate last month — getting a grip on fraud. Some of the new commissioners have already been put into question by their past. I am waiting to see how they react on my case, for which I have appealed to them to suspend my dismissal.

In any normal company or organisation, alarm bells ring if auditors refuse to pass the accounts. If nobody knows where the money is going, shareholders are up in arms, contributors cease contributing, the negligent or incompetent are dismissed. But EU taxpayers have no say in where their taxes are spent. In Brussels and Strasbourg there is no tradition of accountability. Instead, when evidence of massive fraud becomes too great to ignore, the practice is to blame others.

The institution responsible for this state of affairs is primarily the Commission, even though in recent years this institution has reverted to blaming member countries. But above them are the MEPs. The European Parliament’s job is to shout for the taxpayer. Instead it has refused to hear me, which surprised me because I was trying to speak on behalf of the taxpayer. Worse, MEPs continue to give discharge to the Commission on its financial responsibility, in the knowledge of the vulnerability of the system to fraud and the lack of action to resolve this situation for the past ten years. The leader of the Liberal group at the European Parliament, Graham Watson, even praised Signor Prodi for my dismissal.

All of this is sad, and not only because of the opportunity for colossal fraud and dishonest waste of money. Good men and women have lost faith in Europe. I have been called a Eurosceptic, but I am not one. I want to fight for a good EU project. To do that we must fight for transparency, for responsibility, for accountability. But my dismissal shows that there is a culture ready to persecute those who want to bring clarity. The officials who recommended dismissing and prosecuting me are the same ones who have been managing the funds entrusted to the EU without control for years. We need real reform of the EU; but the new constitution will do nothing to combat the Brussels culture of graft, secrecy and corruption that so tarnishes the European dream.
If that doesn't bother you, think about it this way:

At $126B a year, the EU spends $345M/day, $14M/hour and so on. In the time it's taken me to write this posting, $2,000,000 of unaudited, unaccountable money has been spent by un-elected, un-auditable European Bureaucrats.

Feel Better?

Pine Cone?

Green Buildings are discussed in the Economist this week.
It is officially known as the Swiss Re Tower, or 30 St Mary Axe. But Londoners universally refer to the newest addition to their skyline as “the Gherkin”, thanks to the 41-storey building's distinctive, curved profile, which actually looks more like a pine cone. What is most remarkable about the building is not its name or its shape, however, but its energy-efficiency. Thanks to its artful design and some fancy technology, it is expected to consume up to 50% less energy than a comparable conventional office building.
Here's a picture

"Pine cone" isn't the first thing that comes to mind.