Report sparks EU row over MEP expenses

MEPs have given a mixed reaction to claims of alleged corruption and financial abuse by deputies.

An EU internal auditors' report into MEPs' expenses reveals worrying evidence of alleged widespread abuses and poor financial controls.

The report, details of which were published in the Sunday Times over the weekend, reveals alleged systematic abuses by MEPs of parliamentary allowances that, it claims, enable them to pocket more than €1m in profits from a single five-year term.

It says that some members claimed for paying assistants of whom no record exists and diverted public money into front companies.

According to the report, payments were made to assistants who were not accredited with the parliament and to companies whose accounts showed no activity.

The 92-page report was compiled by Robert Galvin, an EU internal audit official, and has now been published for the first time by the Taxpayers' Alliance.

It was based on a representative sample of 167 payments - out of a total of 4686 - made during October 2004

It says MEPs also have a final salary pension scheme which is even more generous than the one provided to MPs in the UK.

The Alliance calculates that the cash value of this benefit would be about €350,000 over a full parliamentary term.

Nigel Farage, leader of the UK Independence Party, said, "If an MEP plays the game, does nothing in his or her member state and lives in Brussels they can amass a large sum of money.

"This is certainly the only job I have ever had where the harder I work the less I earn.

"The system is certainly open to abuse and institutional fraud."

Farage, who is also joint leader of the Independence Democracy group, claims that a "substantial number of MEPs are making the most" of their five-year term "and the system in place encourages this".

"There will be some changes to the system soon and we need to study these carefully but there will only produce minor improvements and not much more than that," he added.

UK Socialist deputy Richard Corbett branded the report and Sunday Times article as an "old story" which had surfaced and been dealt with 12 months ago.

"It was investigated by Olaf and it turned out that only a handful of MEPs were implicated."

Corbett said a new members' statute will be introduced in the next legislature which will "tighten up" the allowance system for MEPs.

"This will enable the authorities to more easily track down and deal with those members who choose to defraud the system."

He pointed out that MEPs' salaries, which are currently extremely diverse, will be 'harmonised' after June's European elections.

The Sunday Times quotes a parliamentary spokesman as saying that the leaked report is a "study of potential weaknesses" in the system.

"It has had important consequences and the result has been a complete overhaul of the system," he said.

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