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TI condemns European Parliament’s rejection of essential anti-fraud reforms

With vital overhaul rejected, the MEP expense system remains

Transparency International, the leading global non-governmental organisation devoted to combating corruption, spoke out today against the European Parliament's decision to reject the reform of expense claim procedures for Members of the European Parliament (MEPs). "This decision is deeply disappointing," said David Nussbaum, TI's Chief Executive. "The rejected reforms are essential in ensuring the financial accountability of MEPs. The current system is open to embezzlement."

Objections to the existing system centre on rules for travel reimbursements, pension contributions, and office allowances. First, as MEPs are not required to present documentation to justify travel expenses they can claim far more in expenses than they actually spend. Second, there are no adequate safeguards to prevent abuse in the way MEPs fund private pensions, as noted recently by the European Court of Auditors. Third, generous allowances for office expenses are not audited, again opening the door for abuse.

On 12 April, MEPs voted to reject measures drafted by the Parliament's Committee on Budgetary Control, which would have been a first step towards reforming the system. A number of MEPs have expressed strong opposition to this decision; UK Liberal Democrat MEP Chris Davies even went so far as to claim that the decision, "gives the all-clear to embezzlement." In addition, the Parliament voted against adoption of a code of professional ethics, including tighter regulations on conflicts of interest. "Such codes are invaluable tools for ensuring the accountability of public servants" said Rytis Juozapavicius, Executive Director of TI Lithuania. "We urge the European Parliament to enact these much-needed reforms."

The reason frequently given for rejecting reform is the significant disparity between the salaries of MEPs from richer Member States and those from the poorer Member States - largely the new Member States of Central and Eastern Europe. Generous expenses are seen as compensation for lower salaries. However, Lithuanian MEP, Ona Jukneviciene, a member of the Committee on Budgetary Control, quoted in The Scotsman (12 April), rejected this argument, saying, "I do recognise the huge discrepancies in basic salaries, but that is no justification for abusing the system." Proponents of reform argue that there are ways to tackle the salary issue without endorsing the present system.

"This regrettable decision threatens to undermine the legitimacy of the EU's endeavours to promote democracy in candidate countries and other regions of the world," added Laurence Cockcroft, a member of TI's International Board of Directors and Chairman of TI UK. "The European Parliament's standards are lower than those operating in many countries which look to the European Union to set a positive example. We ask that the Parliament revisit this decision and reflect on their responsibility as democratic representatives of the people of Europe."

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