The Sovereignty of Fraud and the Fraud of Sovereignty: OLAF and the Wise Men
| Published date | 01 March 2000 |
| DOI | https://doi.org/10.1108/eb025964 |
| Pages | 32-45 |
| Date | 01 March 2000 |
| Author | Bill Tupman |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 8 No. 1 — Analysis
The Sovereignty of Fraud and the Fraud of
Sovereignty: OLAF and the Wise Men
Bill Tupman
Journal of Financial Crime
Vol. 8 No. 1, 2000, pp. 32–46
© Henry Stewart Publications
ISSN 0969–6458
INTRODUCTION
This paper discusses the politicisation of fraud within
the European Union and continues the author's scries
on fraud, supranational investigative arrangements
and cross-border crime.1 During 1999, the fight
against European Community budget fraud became
a controversy of central importance within the Euro-
pean Union. This was not because such fraud is wide-
spread, but because as a criminal offence of an all-
European nature it was the point of least resistance
from which to construct a European criminal code
and a European FBI. During 1998 the corpus juris
was proposed as the proto-criminal code and the
next stage in the fight against fraud.2 This situated
the anti-fraud strategies debate into the conflict
between member states and the Commission's alleged
agenda for a European superstate. Moreover, with
European parliamentary elections approaching,
nationalists and Eurosceptics had an interest in exag-
gerating the problem of fraud in order to depict cen-
tral European institutions as wasteful and corrupt as
well as a threat to the nation-state. Although since
the introduction of the doctrine of subsidiarity,
national sovereignty is a fraud in the European con-
text, fraud is also a sovereign issue.
The first section of the paper examines events sub-
sequent to the
corpus
juris proposals. UCLAF (Unité
pour la Coordination de la Lutte Anti-Fraude) was
scathingly criticised by the Court of Auditors, as
was the Commission
itself.
Allegations emerged not
simply of mismanagement, but of fraud and corrup-
tion. The so-called Committee of Wise Men (Com-
mittee of Independent Experts or CIE) was set up
to examine these criticisms and allegations. Its
report then led to the resignation of the Commission
en bloc. A new unit, OLAF (Office dc la Lutte Anti-
Fraude), was created to replace UCLAF, previously
presented as an excellent model that overcame several
of the obstacles to supranational investigation.3 The
second section of the paper concentrates on the
report of the Committee of Independent Experts,
identifies themes within it, and revisits the reasons
for the creation of UCLAF and the determination
of its policies. It also discusses the recommendations
of the CIE on the issues of fraud and corruption in
the context of an increasingly globalised system of
financial regulation.
The final section of the paper discusses the fight
against fraud in the context of the ongoing dispute
between the European Parliament, the European
Commission and the governments of the member
states over the location of policy making. Since the
Treaties of Maastricht and Amsterdam, this legalistic
dispute over national sovereignty has been something
of a fraud. Nevertheless, the creation of OLAF repre-
sents a victory for Parliament, while the creation of
EUROJUST at the Tampere Summit on Justice
and Home Affairs is a victory for the member
states.
As discussed below, EUROJUST replicates
the problems of UCLAF; it is not a European
public prosecutor, but a mechanism for facilitating
cooperation between national prosecutors. This is
not a move towards a European
corpus
juris but a
reassertion of the differences between legal systems
that inhibit successful criminal prosecution. In
addition, the attempt to build a 'scoreboard' for
justice and home affairs cooperation is good political
rhetoric, but nothing
more.4
BACKGROUND: CRITICISM OF UCLAF
AND THE COMMISSION
For reference purposes, the following statement is
taken from the European Commission's glossary,
explaining the term 'fight against fraud', which will
appear throughout the paper.
'The fight against fraud and corruption rests on
two separate legal bases, both of which were
amended by the Treaty of Amsterdam:
Article 29 of the EU Treaty calls for "closer coop-
eration between police forces, customs authorities
and other competent authorities in the Member
States, both directly and through Europol" in
this area;
Article 280 of the EC Treaty concerns activities
affecting the Community's financial interests.
Here, the Council and the European Parliament
have the power to adopt measures under the
Page 32
To continue reading
Request your trial