Dr Charles Tannock

Member of the European Parliament for London

EU to probe claims of Palestinian funds misuse

Financial Times - 7 February 2003

By Tobias Buck

The European Union's fraud watchdog has decided to investigate EU payments to the Palestinian Authority, following allegations that these funds are being channelled into supporting terrorist activities.

The move follows a call by 168 members of the European parliament this week to launch a separate inquiry into the use of these payments, which total 10m ( $10.8m, 6.6m) a month and make up 10 per cent of the PA's general budget.

Should investigators indeed find a link between the EU's funding and Palestinian terrorism, they would deal a huge blow to Brussels' standing in the region and further undermine the EU's fledgling efforts to build a credible common foreign policy. It could also spark further tension in the fraught relations between the US and Europe.

Chris Patten, who as commissioner for external relations is charged with overseeing the payments, said yesterday: "The Commission has fully investigated repeated allegations that some of these budgetary payments may have been misused. No evidence to that effect has yet come to light."

Despite these findings, Mr Patten said he welcomed yesterday's decision by Olaf, the Commission's anti-fraud office, arguing it was "in line with its policy of zero tolerance".

The MEPs calling for a formal committee of inquiry struck a more sceptical note, claiming that, while every inquiry into the matter was welcome, they would press on with their plan.

"I am not entirely satisfied that Olaf is free of Commission pressure. We will maintain our campaign to install a committee of inquiry," said Charles Tannock, a MEP from the British Conservatives.

Ilka Schroder, a Green MEP from Germany, said an investigation by Olaf would be unable to deliver the political evaluation that the MEPs were seeking. "Olaf can only look at whether funds were misused. Our accusation is that the Commission should have seen that EU funds have been used to fund anti-Semitic terror organisations."

The Commission insisted yesterday that a formal inquiry would be counterproductive. "This is an exceptionally heavy procedure that risks undermining one of our most valuable contributions to stability in the Middle East," a spokesman for Mr Patten said.

That view is shared by a powerful alliance of MEPs who support a plan put forward by the heads of the parliament's budget, budget control and foreign affairs committees to install a working group to examine the allegations. Elmar Brok, chairman of the foreign affairs committee, argued that launching a formal parliamentary probe was a mistake: "We think that a committee of inquiry would be the wrong way forward, because it would weaken the Commission's ability to act."
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