Fraud scandal suspends EU accounts

A scandal over fraudulent travel expenses and misuse of official cars came to a head yesterday when MEPs refused to approve the accounts of the body representing European Union regions.

A dossier of irregularities presented by an auditor included over-estimates of distances and costs of journeys, claims without airline tickets or boarding cards, and a train ticket sent in with correction fluid on it. One member of the EU's Committee of the Regions (CoR) is said to be under investigation for €3,600 (£2,500) of private travel in official cars.

After a plea from an internal auditor for more time to clarify the situation, the European Parliament's budget control committee decided not to approve the accounts, postponing a decision pending further investigation.

The CoR is made up of 222 representatives of local or regional government, and some elected politicians appointed to the body to reflect the diversity of opinion in the EU.They give opinions on legislation but have little real power.The revelations will damage the body's shaky status at a time when when the convention on the future of Europe is studying the role of EU bodies ahead of enlargement next year.

Eluned Morgan, a Labour member of the European Parliament's budget control committee, said it would have been "irresponsible" to approve the CoR accounts "when there are loopholes and when some of the rules are open to interpretation which can lead to fraud". However, the committee approved the 2001 accounts of the European Commission, despite the objections of the former chief accountant Marta Andreasen, who has been suspended.

Ms Andreasen faces disciplinary action for her public criticism of the Commission's internal accounting system. But most MEPs accepted that its accounting standards are no worse than those of most national governments and that reform is under way.