There was shock but little surprise in Brussels when the Qatar corruption scandal engulfed the European parliament.
The arrest of Eva Kaili, a vice-president of the parliament and her husband, Francesco Giorgi, an aide to another MEP, followed police raids and the confiscation of €900,000 stashed in the couple’s suitcases. Another former MEP, Antonio Panzeri, who as an erstwhile deputy has lifetime access to the parliament, was arrested with €600,000 in cash.
While overt criminality is rare, the EU assembly’s reputation for venality and sleaze removed any factor of surprise.
As Transparency International — which has long highlighted the excesses of MEPs — noted, the case was “egregious” but not an isolated incident in an institution marked by a “culture of impunity”.
“I wouldn’t be surprised if there was more undue influence behind the scenes, sometimes involving money being passed over the table,” said Michiel van Hulten, the director of Transparency International in Brussels, who is a former MEP himself.
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Qatar is well known for pressing “gifts” on western politicians, such as in one recent case a Rolex watch worth €50,000 that was given to a French official visiting the emirate on a diplomatic mission.
Politicians are warned of the risks when meeting the Qataris after one incident in 2009 when Bruno Le Maire, who is now French finance minister, caused a diplomatic incident by rejecting an €85,000 Patek Philippe watch.
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“A foreign minister visiting the emirate usually receives a Patek Philippe watch. Visitors ranked below would receive an Audemars Piguet watch [worth about €60,000]. For parliamentarians there is an Omega or a Rolex, then a Cartier,” wrote Christian Chesnot, a French journalist who has charted Qatar’s diplomatic tactics.
Canny politicians such as Le Maire turn down the gifts but many MEPs — thought to be dozens — have accepted. Under parliament rules, MEPs are not allowed to accept gifts worth more than €150 and are expected to declare hospitality or trips. But compliance and enforcement is not always there, and over the past two years only eight MEPs, out of an assembly numbering 705, have made declarations.
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MEPs are known for a strong sense of entitlement combined with a striking absence of accountability when it comes to lobbying and the huge sums of public money they receive in salaries and allowances.
Each deputy is paid over €112,000 a year which is taxed at a special low tax rate for EU officials of 22 per cent. In Belgium, where the parliament has its seat, the normal rate of taxation is over 50 per cent.
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The high salaries, low taxes and the many perks are meant to insulate MEPs from the temptation and risk of corruption but in fact the way allowances are paid actually creates a culture of sleaze.
For example, all MEPs are directly paid a “general expenditure allowance” of €4,778 a month, or €57,336 annually, to pay for the running costs, not including staffing, of their offices outside the parliament’s own buildings. It is paid tax free.
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There are no requirements to prove expenditure, or even, since October, any bookkeeping at all to demonstrate the MEPs even has an office. The parliament’s “bureau���, an administrative body largely comprised of the assembly’s vice-presidents, including Kaili before she was stripped of her office, has resisted stricter rules.
As Van Hulten says, the parliament has “over decades fostered a culture of impunity, through a combination of lax financial controls and a complete lack of independent ethical oversight”. “Any attempt to improve accountability is blocked by the parliament’s bureau, with the consent of a majority of MEPs.”
Another perk is a daily “subsistence” allowance of €338 that is paid, again tax free, to MEPs, in cash if requested, without the need to show any proof of expenditure. An assiduous MEP can pocket more than €65,000 a year leaving plenty of cream to skim off the top after living costs are defrayed, mainly housing. The allowance is known as the “sign in and slope off” and MEPs are regularly caught signing for the cash before heading home.
On top of all that, MEPs have a personal budget of €320,808 a year in parliamentary assistant allowance to pay for their staff. The money is a powerful tool of patronage and nepotism within political parties. Many MEPs use the allowance to ensure that the spouses and relatives of their colleagues have well paid jobs, on a quid pro quo or “you scratch my back, I’ll scratch yours” basis.
In 2008, a scandal erupted when newspapers including The Times reported widespread abuse of the allowance being paid to the spouses or children of MEPs for fictitious posts or through family companies.
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Independently of the Qatar allegations, Kaili was already under investigation for abusing the allowance.
While resisting calls for transparency in their own house, MEPs demand that other EU institutions publish full internal audits before the parliament signs off on their annual budget expenditure.
There is only one EU institution that keeps its is own internal audits secret and it is . . . the European parliament. The reason is straightforward. It is common knowledge that most years the assembly’s own auditor identifies widespread fraud risk in the management of MEPs’ expenses. His reports stay secret and the abuses continue.
On top of the lavish pay and perks, over a quarter of MEPs last year had second jobs collectively worth, according to declarations, up to €11.5 million. Under the system of self-regulation by the parliament not a single MEPs has been sanctioned since 2016 despite flagrant breaches of the rules that have been publicly exposed. “There are actually no consequences for people who break the rules. And that must change,” said Van Hulten. Many in Brussels are not holding their breath.
