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. Last Updated: 07/27/2016

EU Chiefs Quit Over Report of Cronyism

BRUSSELS, Belgium -- Shamed by an independent report that chronicled top-level cronyism and fraud, all 20 members of the European Commission quit Tuesday, plunging the continent into a political crisis at the worst conceivable moment.

"In the light of the report, the members of the commission have unanimously decided this evening to collectively submit their resignation," said Jacques Santer, president of the European Commission, who announced the move hours after he and his colleagues received the report Monday evening.

The departure en masse of the 20 executives who run the 15-nation European Union machine comes as the EU itself stands at a turning point.

Its greatest project, the euro single currency launched in January, is sickly. The United States is mounting a major challenge on trade in a weird row over the right to sell bananas. And in eight days, a special EU summit is to be held in Berlin to discuss sweeping financial reforms so that the bloc can accept new members from Eastern Europe - a summit in which the commission was to have played a crucial role.

The timing is indeed so bad that speculation mounted that Santer and some or all of the commissioners might be temporarily reinstated. And not long after the solemn speeches and symbolism of their midnight collective resignation, some commissioners were already beginning to distance themselves from tainted colleagues.

The seeds of the commission's destruction were planted in December when the European Union's top auditor blew the whistle on fraud, nepotism, mismanagement and abuse that he said was being ignored.

EU auditors concluded that a staggering $4.8 billion - or 5 percent of the EU budget - was misspent in 1998. Far and away the biggest boondoggle, auditors said then, was an ambitious EU program to improve nuclear safety in the post-Chernobyl former Soviet Union.

About $300 million was spent on such nuclear safety programs but they were almost entirely ineffective and unmonitored, auditors said. At least a third of the money went to European companies selected without any competitive bidding, auditors said, adding that some firms then subcontracted the work to Russians under weakly documented arrangements with enormous profit margins built in.

Representatives to the 626-seat European Parliament - who are up for election in June, and aware of the popular dislike of highly paid "eurocrats" - responded in outrage to this Chernobyl-gate.

The parliament held up the EU budget over the corruption allegations and threatened a vote of censure in January unless the commission took action - a vote that could have forced immediate resignation of the commission. Instead, as a compromise, the investigation that produced Tuesday's report was instigated.

Elected legislators had long demanded greater accountability from the faceless "bureaucrats in Brussels," and commissioners and other "eurocrats" were regularly denounced for issuing directives and decrees that range from regulating the permitted size of bananas to deciding whether unpasteurized milk can be used to make cheeses like Camembert (yes in France, but soon maybe not in Britain).

The picture painted by the 144-page report sits well with the popular prejudices. The commissioners, who are appointed by the leaders of the EU's member countries, may be the managers of the largest economic bloc in the world.

But in the report they come across as underworked and overpaid bureaucrats - commissioners earn more than $200,000 a year plus expenses - who devoted little attention to mismanagement under their noses.

Compiled by a panel of five auditors, the report singled out Santer, former French Prime Minister Edith Cresson and four other commission members for engaging in or failing to prevent the hiring of friends and relatives for nonexistent jobs, and for failing to account for massive misspending in EU aid programs.

The report said there was no evidence any commissioner "was directly and personally involved" in fraud. But it added dramatically that, "It is becoming difficult to find anyone who has even the slightest sense of responsibility" at the commission.

The fraud report was harshest on Cresson, who it said "failed to act in response to known, serious and continuing irregularities over several years" in educational and other programs for which she was responsible.

The report said that when informed of fraud and waste by an outside contractor who squandered $160 million meant for a youth training program, Cresson failed to stop it.

She was faulted for hiring as scientific adviser a "long-standing friend," in the report's words - a dentist from the town of Chatellerault where Cresson had been mayor. During the six months of his 1996 contract, the dentist, Rene Berthelot, took 17 business trips from Brussels -13 of them to Chatellerault, the report said.

Cresson also was criticized for getting a short-term EU research job for a friend in 1995 for which the man was later judged to be unqualified. He was paid for 10 months but was allegedly out sick for nine.

"Should we only work with people we have never met?" Cresson responded when questioned about those contracts. The 65-year-old Cresson - who served just 10 months as a French prime minister in 1992, a stint in which she gained notoriety for saying most British men were homosexuals, Japanese workers were like ants and she did not give a damn about the stock market - was reviled in the French media Tuesday. "Shameful Cresson," the tabloid France-Soir trumpeted across its front page. "Cresson sinks the Commission," the left-wing daily Liberation said.

"I may have been a little careless," Cresson told France-2 television, adding that she had had "an enriching experience."

Santer, a former prime minister of Luxembourg, was cited specifically in the report for failing to oversee the commission's security office properly before he became chairman.

At a news conference, Santer sounded bitter, calling the fraud report unfair and unbalanced. He accepted there were individual cases of wrongdoing but said most dated back to before 1995, when his commission took office.

"I found it shameful," Santer said, adding, "we lived up to our responsibility, even if we judge the report to be unbalanced."

Commissioners Monika Wulf-Mathies of Germany and Joao de Deus Pinheiro of Portugal were also fingered for putting friends and relatives on the European payroll. Spanish commissioner Manuel Marin was accused in the report of lax control over the running of an aid program for Mediterranean nations, of irregularities in hiring and of doing too little too late to stop fraud in the European humanitarian aid budget in the early 1990s. ***(AP, Reuters, NYT, WP)***