European Parliament: “Trust us ─ we are clean (soon)”

It is a promising sign. The European Parliament has reacted to reports on wide-spread sleaze.

But the statement is an almost blanket denial. The issues are serious enough to merit space. First, let the EP speak.

Then we try to evaluate the measures and trust of the European Parliament.


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European Parliament press statement

On 24 February 2009 the European Parliament issued the following press release:


Getting the facts straight on MEPs’ allowances

Institutions - 24-02-2009 - 10:34

Recent media reports in some Member States have given a false impression of the situation on MEPs’ expenses. In fact, following an Internal Audit Report made one year ago, the European regulatory framework was subject to a major change last December when Parliament and Council approved a new statute for Parliamentary Assistants.

Moreover, effective controls have already taken place: 99.5 per cent of the payments made by Parliament to Members' assistants in years 2004-2007 under the rules governing parliamentary expenses and allowances has now been cleared as regular based on extensive checks of the relevant documentation.

These checks have been carried out by Parliament’s services for all Members, whether or not they have been subject of reporting in the media and whether or not payments made to their assistants were mentioned in the Internal Audit Report. The checking of the payments relating to parliamentary assistance made in 2008 is currently ongoing.

Major reforms of systems for employment of assistants and travel expenses

Various claims have been made relating to an Internal Audit Report, which found a number of weaknesses in the system for the employment of MEPs’ assistants. The aim of Internal Audit Reports is to enable problems to be fixed, and this report was one of the factors behind Parliament’s decision essentially to replace the system governing the payments of parliamentary assistance allowances with a new European and common regime.

From July this year, Brussels-based assistants are being added on to the employment system for EU officials, with those based in the MEPs’ Member State being handled by qualified paying agents chosen by the Institution, guaranteeing tax and social security arrangements in the relevant Member State. The practice of Members employing close relatives as assistants is being phased out with new contracts no longer allowed.

A major reform of MEPs’ travel expenses will see, from July this year, expenses refunded on the basis of documented costs incurred rather than on a flat-rate basis as is the current practise.

Effective controls in place

Parliament’s services have undertaken and undertake a variety of checks on the various payments made to MEPs' assistants and request further information where doubts arise. If it has turned out that funds have been improperly claimed, the relevant sums have been recovered from the payments concerned. Where there has been and is good reason to suspect fraud, Parliament’s services can, and do, call in the EU’s anti-fraud investigations office, OLAF. This can ultimately lead to cases being passed to the relevant national prosecutors.


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The EP press release is available at:

http://www.europarl.europa.eu/news/expert/infopress_page/008-50236-054-02-09-901-20090224IPR50235-23-02-2009-2009-false/default_en.htm

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Documentation

The European Parliament offers supporting documentation, available through the same web page.

‘Allowances paid to Members of the European Parliament’ offers basic information about the amounts paid to MEPs.

There is a link to Decision 2005/684/EC, Euratom of the European Parliament of 28 September 2005 adopting the Statute for Members of the European Parliament, published in the Official Journal of the European Union 7.10.2005 L 262/1.

There is also a link to the so called Assistants’ statute, European Parliament legislative resolution P6_TA-PROV(2008)0606 of 16 December 2008 on the proposal for a Council regulation amending the Conditions of employment of other servants of the European Communities, awaiting final approval and publication.

In addition, there is an explanatory press release of 16 December 2008 ‘New employment and payment system for MEPs' assistants’.


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Evaluation

It is indeed a positive sign that the European Parliament engages in a discussion about its practices. But can the case it presents be likened to more than white-wash?

The European Parliament offers no excuses for the notorious misuse of public funds by elected representatives, for the lack of controls and action against culprits, or for the active suppression of available evidence.

Only the belated reforms undertaken serve as an indirect admission of guilt.

We are now told to trust the European Parliament that the 99.5 per cent of MEPs’ expenses currently cleared as regular are indeed in order. How can we verify that? Are we offered any credible proof? Has the EP decided to publish audit reports?

The European Parliament has placed itself in the unenviable position of having forfeited the trust it might have had.

There is but one remedy to the credibility problem on past history and existing practices: earning back trust by extreme openness. Publish every audit report and invite new ones, open the books for outside inspection and take action against the sinners.


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Promised reforms

Unrepentant and secretive about the past and present, the European Parliament lets us understand that it is going to become virtuous in July 2009, after the European elections.

The MEPs’ Statute seems to plug one gaping hole, since Article 20 foresees reimbursement or actual travel expenses only, from July 2009. Other allowances can still be flat-rate.

Late in the day, some changes were made to the status of MEPs’ assistants by way of a Bureau decision on 9 July 2008 on Implementing Measures for the Statute for the Members of the European Parliament. (Where are these Implementing Measures on the EP’s web pages?)

If the 16 December 2008 resolution on the so called Assistants’ Statute enters into force, accredited assistants at the EP’s places of work would be paid by the Parliament.

The Assistants’ Statute seemed less clear about the salaries of local assistants in MEPs’ home countries, but perhaps the following sentence in the press release should be interpreted as a promise of implementing measures (reforms) to come:

“The larger package of measures includes not only a European statute for assistants working in Brussels but also the handling of contracts of and payments to assistants working in the Member States by qualified and duly recognised payroll organisations in those countries.”


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Let me get the facts straight: The European Parliament’s grudging reforms and recent press statement are still a long way off from a public relations success, especially from an institution which profiles itself as a watchdog with regard to how taxpayers’ funds are spent by other EU bodies and member states.


Ralf Grahn

Members of the European Parliament: Regulations and general conditions

Parts of the rights and duties of members of the European Parliament are covered by the Statute laying down the regulations and general conditions governing the performance of the duties of MEPs, finally approved and set to enter into force after the European Parliamentary elections on 4 to 7 June 2009.

How much the Statute cleans up the unsavoury practices concerning MEPs’ expenses depends on detailed rules set by the European Parliament and the control exercised by the EP in the future.


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Current treaty

Article 190(5) of the Treaty establishing the European Community (TEC) gives the European Parliament some autonomy in devising the rules governing the performance of the duties of its Members (MEPs).

The EP’s initiative is subject to checks and balances. The Commission issues an opinion and the approval of the Council is needed.

Article 190(5) TEC as published in the latest consolidated version of the treaties, OJEU 29.12.2006 C 321 E/132:

Article 190(5) TEC

5. The European Parliament, after seeking an opinion from the Commission and with the approval of the Council acting by a qualified majority, shall lay down the regulations and general conditions governing the performance of the duties of its Members. All rules or conditions relating to the taxation of Members or former Members shall require unanimity within the Council.


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Consolidated Lisbon Treaty



The substance remains the same if the Treaty of Lisbon enters into force. Taxation of MEPs and former MEPs still requires unanimity within the Council.

Article 223(2) of the Treaty on the Functioning of the European Union (TFEU) takes over and rephrases paragraph 5 of Article 190 TEC, OJEU 9.5.2008 C 115/149:




Article 223(2) TFEU


2. The European Parliament, acting by means of regulations on its own initiative in accordance with a special legislative procedure after seeking an opinion from the Commission and with the approval of the Council, shall lay down the regulations and general conditions governing the performance of the duties of its Members. All rules or conditions relating to the taxation of Members or former Members shall require unanimity within the Council.


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Problems

The lack of a common Statute for the members of the European Parliament has led to gross iniquities between MEPs from different member states, with huge differences in remuneration tied to salaries of national parliamentarians.

On the other hand, reimbursement of travel and other expenses based on theoretical flat-rate amounts in combination with poor control resulted in a murky culture of MEPs lining their pockets and those of family members.

Cleaning the Augean stables proved to be a long and arduous task. Only after protracted efforts were the European Parliament and the Council able to reconcile their views.

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Statute

Finally the Decision of the European Parliament 2005/684/EC, Euratom of 28 September 2005 adopting the Statute for Members of the European Parliament was able to introduce uniform rules concerning some aspects of the rules and general conditions applicable to the exercise of MEPs’ mandates.

The old rules apply until the end of the present term of the EP. The Statute enters into force only after the June 2009 European elections, on the first day of the European Parliament parliamentary term beginning in 2009 (Article 30), but there are transitional provisions for old members who might lose out (Articles 25 to 29).



The MEPs’ s Statute is much less than a comprehensive act on the rights and duties of members. Article 1 gives the scope of the Statute:


Article 1

This Statute lays down the regulations and general conditions governing the performance of the duties of Members of the European Parliament.


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Overview

Many of the provisions refer to the EP’s Rules of Procedure (which will be presented in a later blog post). Here is a ‘telegraphic’ list of the contents of the Articles of the Statute:

Article 2: Freedom and independence of MEPs; agreements on resignation void.
Article 3: Individual and personal vote; binding mandate prohibited.
Article 4: Only tabled documents regarded as EP documents.
Article 5: Right to table proposals for Community acts.
Article 6: Right to inspect EP files (but not personal files and accounts).
Article 7: Translation of documents and speeches into all official languages.
Article 8: Forming political groups.
Article 9: Right to appropriate salary, transitional end-of-service allowance and pension. Survivor’s pension.
Article 10: Salary 38.5 % of the basic salary of a judge at the Court of Justice of the European Communities.
Article 11: Salary from another parliament is offset against EP salary.
Article 12: Salary subject to Community tax, but abatements not. National tax takes Community tax into account.
Article 13: Amount of transitional allowance at the end of office.
Article 14: Amount of old-age pension from the age of 63.
Article 15: Invalid pension.
Article 16: Choice between transitional allowance and invalid pension.
Article 17: Survivor's pension for the spouse and dependent children.
Article 18: Reimbursement of the costs incurred as a result of sickness, pregnancy or the birth of a child.
Article 19: Insurance cover.
Article 20: Reimbursement for expenses subject to rules laid down by the EP.
Article 21: Right to personal staff and expenses met by the EP.
Article 22: Right to the EP's office facilities, telecommunications equipment and official vehicles.
Article 23: All payments from EU budget.
Article 25: Old system optional for re-elected members.
Article 26: Notification of choice of old system.
Article 27: Voluntary pension fund remains for old members.
Article 28: Old national pension entitlements remain in force.
Article 29: Member states’ transitional rules.
Article 30: Entry into force on the first day of the parliamentary term 2009.


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Allowances paid to MEPs

The European Parliament offers information about the current Allowances paid to Members of the European Parliament, including the general expenditure allowance (4,052 euros per month), the flat-rate travel allowance, the annual travel allowance (EUR 4,000) for other than official meetings, the subsistence allowance (EUR 287 per day) for participation in official business and remuneration of MEPs’ assistants (EUR 16,914 per month plus costs):

http://www.europarl.europa.eu/parliament/expert/staticDisplay.do?id=39&pageRank=1&language=EN

The web pages also refer to the coming detailed rules based on the Statute.


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Detailed rules

The coming detailed rules concerning the amounts, payment and control of expenses are only referred to in the Statute, but the ingrained practices have been an eyesore for too long.

According to the web page referred to above the work on the new rules is unfinished.


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EP Rules of Procedure

For those who want to look at the conduct of EP business the European Parliament’s Rules of Procedure (16th edition, October 2008) are available here:

http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+RULES-EP+20081022+0+DOC+PDF+V0//EN&language=EN

But it is somewhat bewildering to find that Eur-Lex refers to the European Parliament ─ Rules of Procedure 16th edition July 2004 (OJEU 15.2.2005 L 44/1), which seems to be the last version officially published and I failed to find the 2008 version through the Publications Office.

Clarifications from readers are invited. We are going to return to the EP’s Rules of Procedure in a later blog post.


Ralf Grahn