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Last Updated: Thursday, 21 February 2008, 16:35 GMT
MEPs rush to show clean accounts
By Jonny Dymond
BBC News, Brussels

The European Parliament in Brussels
Initially the European Parliament refused to comment
The European Parliament has never had a great reputation for financial probity.

But, if the claims about a report sitting in a locked room in the basement of the parliament are true, it may be that some members are making explanations to the police rather than to their electorate over the next few months.

No individual cases of individual fraud [have been revealed]
European Parliament statement

Internal Audit report 06/02 has, according to one MEP who has seen it, some explosive allegations about the eventual destination of some of the 100m that MEPs are given to pay for their support staff.

One MEP took the money but employed no-one. Another only employed one member of staff with cash that would pay for up to three.

Service providers

Some of the third parties - known as "service providers" - whom MEPs contract with to handle the money they are given were not registered in Belgium, as they have to be by law.

Chris Davies, British Lib Dem MEP (Courtesy European Parliament)
Mr Davies was one of a small number of MEPs to see the report

Other service providers appear to be little more than names on company letterheads. There are apparently "many instances" where there is no proof that social security payments have been paid for employees.

Chris Davies, a British MEP who sits on the Budgetary Control Committee, calls the report "dynamite".

"I could only read it," he says, "in a sealed room, under supervision, and I wasn't allowed to take notes."

But what he saw, and what he remembers, was enough. He says he was "furious" about what he read, and that as soon as he got back to his office he called the EU's anti-fraud unit, Olaf.

"There are different cultures in Parliament," he says, "and what is regarded in Scandinavian parliaments or Dutch parliament or the British Parliament as completely unacceptable may be regarded by other parliamentarians as completely normal by the standards of their country."

"Nonetheless," he goes on, "this report is simply scandalous. There's no question in my mind that it could well lead to the prosecution and imprisonment of some MEPs."

Clean accounts

British political parties are now rushing to show how clean their accounts are - though some are struggling a little.

Only the Labour and Green parties submit their parliamentary accounts to external audit; the Liberal Democrats (of which Chris Davies is one) and the Conservatives say they follow the parliament's rules.

A spokesman for the United Kingdom Independence Party said he believed that there was no external audit for its MEPs.

Last night, the European Parliament refused to comment on what it described as an unpublished report.

Twelve hours later, though, it relented.

The audit, a statement said "confirms the need for further reform". But, said the statement, "no individual cases of individual fraud" have been revealed.

Lib Dem MEP Chris Davies on the need for a probe

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