Saturday 22 October 2016

EU slammed for not knowing of key official's offshore firm

Published 22/09/2016 | 15:46

Neelie Kroes (AP)
Neelie Kroes (AP)

The European Union's executive body has been accused of failing to properly check the business interests of its top officials after leaked documents showed its former competition chief was a director an offshore company, which potentially created conflicts of interest.

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Neelie Kroes, who led the European Commission's powerful anti-trust unit between 2004 and 2010, was one of the most high-profile names that emerged in a cache of documents of the Bahamas' corporate registry leaked on Wednesday by the International Consortium of Investigative Journalists (ICIJ) and media partners.

Home Secretary Amber Rudd is also reported to have been named in the files as being a director of two offshore companies.

A spokesman for Ms Rudd played down the significance of the leak, saying: "It is a matter of public record that Amber had a career in business before entering politics."

The leak revealed the names of directors and owners of more than 175,000 Bahamian companies, trusts and foundations, ranging from prime ministers and princes to convicted felons.

The disclosures have raised a chorus of criticism, and follow the international uproar over the leak of the so-called "Panama Papers" earlier this year that revealed details on offshore accounts that helped foreigners shelter their wealth.

Anti-corruption watchdog Transparency International said the commission's verification procedures are simply not good enough.

"It is incredible that something like this - which is a clear breach of the rules and could have led to a major conflict of interest - was undetected by the European Commission for so many years," Transparency's EU director Carl Dolan said.

"The European Commission carries out very limited checks or verifications on the self-declarations of Commissioners when they come into office," he said.

The EU Commission responded by arguing it was powerless to make Ms Kroes disclose all of her business interests.

"There are certain things that even the strictest rules can't fix," chief EU Commission spokesman Margaritis Schinas told reporters.

In the future, he said the c ommission "will make sure that memory doesn't fail here when it comes to declarations of interest". He did not explain how it would do so.

In the Bahamas leak, Ms Kroes was revealed as director of one company - Mint Holdings - that she had not declared when she became the EU's Commissioner for Competition in 2004.

Mint Holdings had been allegedly set up from the United Arab Emirates, with the aim of helping to acquire the assets of energy giant Enron, which subsequently collapsed following a massive accounting scandal.

Ms Kroes, who in 2010 moved on to become the commissioner responsible for digital matters until 2014, said she did not declare her role because the company never became operational, according to the ICIJ. She did, however, declare many other business interests.

Ms Kroes informed the commission about the anomaly last Friday in an email.

On Thursday, commission president Jean-Claude Juncker wrote to her seeking more details about how and when she went about resolving the problem.

The commission could also examine decisions she took during her term in office to identify whether there may have been any conflict of interests.

If she is found to have breached EU laws, Ms Kroes could face court action which might lead to her losing her generous commission pension or other benefits.

Ms Kroes, a Dutch citizen, recently came under fire for publicly criticizing the EU's anti-trust action against Ireland, when Brussels ordered the country to recover some 13 billion euros (£11.1 billion) in taxes from Apple. She is currently a paid adviser to Uber and Bank of America.

She is not the only former commissioner facing a barrage of criticism.

Former commission president Jose Manuel Barroso has also raised eyebrows for taking a job at Goldman Sachs and for his planned role for the bank in negotiations over Britain's exit from the EU.

"These kinds of cases will only become more and more common," Mr Dolan said. "What the commission needs to do is say 'are the kind of safeguards we have in place, are they good enough?'"

EU politicians joined the chorus of criticism on Thursday, with a senior member of parliament's money laundering and tax evasion probe taking a swipe at Ms Kroes, Mr Barroso and the entire EU executive.

"The European Commission (EC) too often means European Corruption. It is this European Union of big business and ruthless theft of Brussels oligarchs which people disdain. The very same politicians that preach to our people to cut back on wages, pensions and public services join shady criminals in the trillion euro industry of tax dodging, money laundering and corruption," said left-wing German politician Fabio De Masi.


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