LONDON (Reuters) - The promise of vast sums of European Union aid to countries affected by the coronavirus and less oversight over the funds is likely to lead to a surge in fraud and corruption, the EU’s chief prosecutor said in an interview.
While the details of the EU’s COVID-19 stimulus package are still being hammered out, leaders are expected to agree a sum of up to 2 trillion euros in the coming weeks, with the funds coming via the EU budget.
Officials still need to agree whether disbursements will be made as loans or grants, what regions need to do to qualify and how the use of funds will be tracked, but recipients want greater flexibility to ensure payments can be made quickly.
For Laura Codruta Kovesi, the head of the EU’s newly created Public Prosecutor’s Office, that is a recipe for an unintended consequence: a big rise in fraud and corruption.
“There are a lot of reasons to believe that our jurisdiction will increase,” Kovesi, who made her name as a relentless and highly successful anti-corruption prosecutor in her native Romania, told Reuters.
“If there are more funds, and if there is more flexibility in how to use them, then indeed I anticipate that we will have more work to do.”
The European Public Prosecutor’s Office is not scheduled to begin full operation until later this year. Kovesi is still building up the team of prosecutors and setting up the headquarters in Luxembourg.
But the body already has jurisdiction and will take the lead on all large-scale, cross-border crime involving the EU budget, including VAT fraud, which is estimated to cost member states as much as 64 billion euros a year.
For Kovesi, 46, there are already signs that the response to COVID-19 is inviting less-than-transparent practices, including the awarding of procurement contracts without open bids, or the use of fake documents to buy medical equipment or drugs at artificially inflated prices.
“Direct procurement is very easy to use because if someone wants to award a contract without competitive bidding it is very easy to sign a contract with a company that has a special interest, or is connected to relatives or friends,” she said.
While some EU countries may be notorious for organised crime and corruption, Kovesi said it was a generalised phenomenon across the EU’s 27 member states.
Her biggest concern in tackling the problem is having sufficient resources to do it.
As it stands, her office has been given a budget that allows for just over 32 prosecutors, an absurdly small number given the scope of their responsibilities, with jurisdiction in 22 of the 27 member states, a number that is expected to rise.
Kovesi said that on the first day of operation, currently set for November, her office expects to be handed 3,000 cases by member states to investigate.
“And each year after that, about 2,000 more cases. We need more money and more prosecutors,” she said, declining to put a figure on the number but suggesting “hundreds”.
Despite less-than-optimal resources, she is eager to get down to work, recognising that crime does not wait.
“Organised criminal groups are especially strong at anticipating and exploiting every opportunity on an industrial scale,” she said, worried about how the virus will be exploited.
Additional reporting by Luiza Ilie in Bucharest; Editing by Giles Elgood