In Your Face

In Your Face
Thought provoking opinions on topical issues.

Friday, September 26, 2003

The Stench of Corruption in the EU

An internal report recently shown, in secret, to the members of the European Parliament; has detailed the corruption, and lack of financial controls, that pervade the EU’s infrastructure.

The EU Commission, led by Romano Prodi, is so concerned about the potential political fallout; that it made the members of the European Parliament sign a declaration of secrecy with respect to the contents of the report.

Needless to say it leaked! Politicians are not good at keeping their mouths shut.

The report, by all accounts, reveals that amongst others the European Statistical Agency (Eurostat) has been falsifying accounts. It is estimated that Eurostat has lost £3M of public money, via off record bank accounts and false accounting.

I have run international audit departments, and headed the fraud investigation department of one of the world’s largest multinationals. In my experience, fraud and corruption in an organisation can only be rooted out if my “five principles of good governance” are followed:

1. Those responsible for fraud and corruption are fired, and prosecuted with the full force of the law. Note that this applies to all levels up to, and including, the CEO/President.

2. Senior management are seen to be “whiter than white”; corporate ethics are disseminated top down, not bottom up.

3. There is transparency with respect to the reporting of fraud and corruption.

4. Effective financial controls are in place.

5. There is an independent organisation that reviews and reports on controls, on a regular basis.

It would seem that the actions, or should we say inactions, of Prodi and his team go contrary to every one of my principles.

There is, in my professional opinion, the unpalatable stench of corruption permeating from the EU bunker.

When something stinks, you open the window and throw it out.

I would suggest, Signor Prodi, that you act quickly and embed my five principles of good governance in the EU infrastructure; otherwise the voters of Europe may soon wake up and realise that this stench is coming from you.

PS: Signor Prodi, should you need to "bone up" on the basics of fraud, corruption and ethics; here are three articles that you should read:

Codes of Conducts and Ethical Principles of Companies
Ten Reasons Frauds Occur
Ten Types of Fraud

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