WRITTEN QUESTION E-2850/01

by Erik Meijer (GUE/NGL) to the Commission

(17 October 2001)

Subject: Use of schemes to get round rules on the public-sector cofinancing required for the allocation of ESF monies in Limburg province, Netherlands

1. Is the Commission aware that the now bankrupt firm Abb MCG in Limburg province, Netherlands, used a special scheme in order to meet the requirement for public-sector cofinancing in the case of ESF 4 projects? The scheme consisted in asking businesses or organisations in various sectors to make loans (and hence not binding contributions) to a training and development fund; this money, passing for public-sector cofinancing, was then paid back to the firm, supplemented with ESF 4 funding, to enable it to implement training projects.

2. Is it also aware that the scheme referred to above is 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?

3. 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 project execution, including specifically Abb, or in commissioning projects, including specifically the Netherlands province of Limburg?

4. Is it aware that Abb was, on various occasions, also part of European consortia of organisations from different Member States which organised training projects, including the Business Continuity Programme (via DG 17), and a number of projects under the Leonardo programme, for some of which it was project manager for the consortia concerned?

5. Can the Commission confirm information according to which, in the case of these projects, very high travel and subsistence costs and the cost of parties and the like were put down as project costs?

6. Does it agree that, in view of such practices in the Netherlands, inquiries need to be made to ascertain whether the European consortia projects in which Abb was a partner appear to involve fraud, corruption, dubious schemes involving bogus foundations or close connections with auditors? If so, is it prepared to order investigations into this matter and to keep Parliament informed of their findings?

7. What is it doing to ensure that practices of this sort do not continue and do not recur in the Netherlands or any other Member State?

Answer given by Mrs Diamantopoulou on behalf of the Commission

(19 December 2001)

1. to 3. The Commission would like to refer to its earlier reply to the Honourable Member's written question E-2451/01(1), which dealt with the same case. The construction was probably also used in other projects of the Dutch Objective 4 programme. The Commission has not carried out a specific investigation into this matter in the Netherlands or in other Member States. Verification of expenditure by the Commission in relation to Objective 4 has so far not revealed any irregularities.

4. to 6. The allegations are serious and that is why the Dutch authorities, i. e. the Agency of the Ministry of Social Affairs and Employment in charge of European Social Fund (ESF) has, at its own initiative, started an investigation into the Abb case. The Commission follows the outcome of this investigation with great interest and only if the Commission is not satisfied with how the Dutch authorities deal with this case it may decide to launch its own investigation.

Concerning the Business Continuity Programme, Abb-ESCET, part of the Abb Management Consulting Group, was one of the several partners of the project but not the project leader. The project is now finished but the verification of the financial statement of the project is not yet completed. As far as the Leonardo da Vinci programme is concerned, the Commission has not financed any projects whatsoever in which Abb MCG is project promoter. A project proposal by Abb MCG in the year 2000 had initially been selected, but due to serious doubts about the firm in question, the Dutch Leonardo da Vinci national agency decided not to sign a contract with this promoter.

7. The current Structural Funds regulation gives the Commission the responsibility of supervising the control efforts of the Member States. The Member States are obliged to make random controls of at least 5 % of the total eligible expenditure before the closure of any programme(2). All irregularities found have to be reported to the Commission. Moreover, any irregularity that comes discretely to the attention of the Commission will also be investigated.

(1) OJ C 115 E, 16.5.2002, p. 87.

(2) Article 10 of Commission Regulation 438/2001 of 2 March 2001 laying down detailed rules for the implementation of Council Regulation (EC) No 1260/1999 as regards the management and control systems for assistance granted under the Structural Funds, OJ L 63, 3.3.2001.