3 Italians Arrested In EU Corruption Scandal

Taken from The International Herald Tribune, March 28, 2007
By Dan Bilefsky

Three Italians, including a senior European Commission official and an assistant to a former Italian soccer star, have been arrested for alleged corruption involving kickbacks that included free home renovations in connection with €30 million in contracts.

Jos Colpin, a spokesman for the Brussels public prosecutor's office, said Wednesday that the charges against the suspects included corruption and forgery. He said the Italians, all residents of Brussels, appeared to have been part of "a very big case of corruption" that had continued for more than 10 years.

A three-year investigation by the European Anti-Fraud Office culminated in dozens of raids Tuesday in Belgium, Italy, Luxembourg and France involving 30 EU buildings, including the commission's headquarters in Brussels, as well as banks and company offices.

Prosecutors said that those arrested included Giancarlo Ciotti, 46, an official in the European Commission's external relations department; Sergio Tricarico, 39, an assistant to Giovanni Rivera, an Italian member of the European Parliament and a former AC Milan soccer player; and Angelo Troiano, 60, a director of several property companies.

Some EU officials questioned Wednesday why a kickback investigation that appeared to amount to a few hundred thousand euros out of the EU's total €127 billion, or $169 billion, budget had taken three years to uncover and had justified raids in four countries that involved 150 police officers and 30 anti-fraud personnel.

Hans Peter Martin, an independent member of the European Parliament from Austria, who sits on the Budgetary Control Committee, said he believed the anti-fraud investigators had overreacted. "This is a classic case of an overzealous" investigation unit trying to prove its anti-corruption credentials, he said. "They have a history of using a cannon to shoot at little birds instead of going after the really big animals."

Max Strotmann, the spokesman for Siim Kallas, the EU's anti-fraud commissioner, defended the inquiry, saying that the arrests showed that the union's anti-corruption drive was working.

"Complicated cases like this with a trans-national dimension can take a long time to investigate," he said. "The EU has a zero tolerance approach to fraud and this case serves as a warning that fraud, no matter how much money is involved, is taken very seriously."

EU officials said the Anti-Fraud Office began investigating the case in 2004 after a Finnish company complained that it had been unjustly denied an EU contract in New Delhi. There were further allegations in 2005, one official said, that Ciotti had been receiving kickbacks to ensure that Troiano won contracts related to EU delegations abroad. The kickbacks allegedly included the renovation of Ciotti's Brussels home, the official said.

Johannes Laitenberger, the European Commission spokesman, said the case was specifically related to the rental and acquisition of furniture and security installations for EU delegations in the 27-member bloc. "There is a suspicion of corruption and manipulation of public markets .

The real question is to what degree were prices increased," he said.

He added that the inquiry had been initiated by the European Commission itself, which had alerted the anti-fraud unit.

An official said Troiano, the Italian businessman, was alleged to have set up several rival construction companies - all under his control - that bid for the same EU contracts, not all of which were publicized. The alleged involvement of Tricarico, the parliamentary assistant, was unclear, but the official said investigators had unearthed evidence that he had fraudulently used European Parliamentary stationery as part of the scheme.

Rivera, who on Wednesday was planning to give a speech to the Parliament on fraud in European football, was not implicated in the investigation, an official said.

The anti-fraud unit, which has an annual budget of €62 million and employs 600 people, including 160 investigators, was set up in 1999 after financial scandals that culminated in the resignation of the European Commission. The unit, which is part of the commission but which conducts its investigations independently, has been struggling to establish its credibility after a series of critical reports about its management.

Two years ago a report by the EU court of auditors concluded that the unit was disorganized, unaccountable and took too long to conduct investigations. "Files take a very long time to process, the reports submitted are inconclusive and the results are difficult to identify," the report said.

In May 2005, it was accused of mishandling an inquiry into the case of a Brussels-based journalist, Hans-Martin Tillack of Stern magazine, whom it accused of bribing officials to obtain information. Tillack had exposed a scandal at Eurostat, the EU's statistics arm, in which millions of euros disappeared into secret bank accounts.

At the time, the EU ombudsman investigating the Tillack case, which resulted in raids by the Belgian police at Tillack's home and seizure of 20 boxes of his files, said that the inquiry had been mishandled.