WRITTEN QUESTION E-2849/01

by Erik Meijer (GUE/NGL) to the Commission

(17 October 2001)

Subject: Bogus foundations established by interested parties and close connections with those auditing the use of ESF monies in Limburg province, Netherlands

1. Is the Commission aware that various investigations are underway in the Netherlands into the way in which the now bankrupt firm Abb MCG used ESF grants, and that, according to a report in the NRC Handelsblad of 1 September 2001, this was a case of unmitigated fraud and corruption?

2. Is it also aware that Abb itself set up bogus foundations which, on paper, were responsible for executing ESF projects but in practice delegated this task entirely to Abb as subcontractor, in order to be able to charge lucrative fees?

3. Does it know whether bogus foundation schemes are being used elsewhere? Has it conducted specific investigations into this matter? Can it state how often such schemes have been used in the last 10 years, and in which Member States?

4. Does it consider such schemes to be compatible with the relevant rules? If not, what action is it taking against those who were involved in them, either in executing projects, including specifically Abb, or in commissioning projects, including specifically the Netherlands province of Limburg?

5. Is it aware that stakeholders in Abb were closely connected with the accountants whose job it was to audit Abb's accounts, in particular that Joep Versteegh, who performed the audit, is the son of Abb shareholder and supervisory board member Ton Versteegh, and that audits on the authority which commissioned the projects, i.e. the province of Limburg, were performed by Deloitte & Touche, with whom Ton Versteegh used to have connections?

6. Is it aware of close connections existing elsewhere between those who execute such projects and the accountants performing the relevant audits? Has it conducted specific investigations into this matter?

7. Does the Commission consider the state of affairs described in questions 6 and 7 to be compatible with the rules in force. If not, what action is it taking against those involved in it, either in executing projects, including specifically Abb, or in commissioning projects, including specifically the Netherlands province of Limburg?

Answer given by Mrs Diamantopoulou on behalf of the Commission

(19 December 2001)

1. The Commission has read reports in the Dutch press about investigations into the possibility of fraud in the case of the Abb project.

2. The Abb project is currently investigated by the Dutch authorities, in particular the European Social Fund (ESF) agency of the Ministry of Social Affairs and Employment, which may refer the case to the Dutch Prosecutor. The Commission will be informed about the outcome of these investigations.

3. and 6. If the Commission had been aware of any dubious schemes and/or connections, which might have given rise to fraudulent activities, it would not have co-financed such schemes, and would have immediately asked the national authorities to follow up with proper legal procedures.

4. and 5. The Commission will not take any position with regard to this specific case before the investigations under the responsibility of the Dutch authorities have been completed. Only once it has a full picture of the case will the Commission decide in fine on the consequences it wants to draw. The Commission's general position on the issue is given under 3 and 6.

7. With regard to the Commission's general position on the issue raise see answer 3. and 6. With regard to the specific Abb case see answer 4. and 5.