The Stale Whiff of Fraud: Behind the Latest European Court of Auditors Report

By Rotherham, Lee | The Journal of Social, Political, and Economic Studies, Spring 2008 | Go to article overview

The Stale Whiff of Fraud: Behind the Latest European Court of Auditors Report


Rotherham, Lee, The Journal of Social, Political, and Economic Studies


The repeated failure of the European Court of Auditors to sign off the accounts of the European Union is an ongoing source of controversy, and an issue that has already obliged one set of Commissioners to resign. This paper reviews the latest findings of the Auditors, and takes their analysis one step further in order to provide a systemic analysis of waste in the EU's annual budget.

Key Words: European Union; European Union accounts; European Court of Auditors; Mismanagement, Fraud.

It may seem surprising that for an institution charged with uncovering billions of Euros of mis-spent taxpayers' money, the European Court of Auditors goes about its business these days enveloped with an alarming cloak of media indifference. The plain truth, however, is that the EU has become so synonymous with waste, poor bookkeeping, mismanagement and fraud that reporting such does not provide ground-breaking insight and thus attract the media's attention.

To be fair, we are not talking about Third World rates of mismanagement. But we are talking about extremely large sums. This year, the EU budget runs at euro1292 billion, or around 1873 bn USD. That gives it a revenue higher than the GDP of twelve of its component member states, or roughly the same as the GDP of, say, Venezuela. This makes it in spending terms the 35th largest economy on the planet Not bad for a bureaucracy reliant upon the taxes of its members.

The problem comes, however, with the level of corruption that the Commission itself has long recognised as being on a par with the worst sectors of national governments, specifically benefits and social security. By acknowledging a 5% fraud rate across the board, this gives us a potential for perhaps 9 billion USD in tax money lost due to corruption or mismanagement, perhaps the equivalent of the GDP of a country like Uganda. That's before we go anywhere near attempting to cost value for money.

It is now the thirteenth year in a row that the Court of Auditors has refused to sign off the Commission's books. The story is a familiar one for journalists, who can predict the routine to a tee. MEPs will debate the budget and invite the Commission to do better next time. The Commission will underline that it is improving all the time. Recalcitrant MEPs will be leaned on by the big political group leaders, and by their own national parties, not to 'make a fuss'. A fuss' is precisely what did happen during the tenure of Jacques Sanier, when almost by accident a motion was passed censuring the Commission and the Commission was forced to resign en masse. Even then, the Commissioners kept their pay, and several Commission members returned to new posts under the successor administration. One even took up the portfolio of reforming the war on fraud. So when even the "nuclear" event of sacking the chief management turns out to have the moderating effect of a damp squib, it is hardly surprising that the discovery of yet more misspending becomes a tired serial of a news story.

To clarify what we mean by this, it is worthwhile just to highlight the key elements from the Court's findings, before establishing an academic typology of the waste in question.

An early statement reminds the Commission of where blame ultimately lies. In the final analysis, it is the responsibility of the Commission. "Regardless of the method of implementation applied, the Commission bears the ultimate responsibility for the legality and regularity of the transactions underlying the accounts of the European Communities (Article 274 of the Treaty). " This can be seen as an early strike against any Commission counterclaim that fraud carried out within member states is the fault of poor policing by the member states rather than itself as the surveillance and signing-off authority.

It is also, incidentally, the source of a recurring Commission bid for power in the form of the European Public Prosecutor, which tends to do the rounds after every Court report. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

The Stale Whiff of Fraud: Behind the Latest European Court of Auditors Report
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.