Monday, March 24, 2008

Silencing the Truth: Russian style

Slow but steady, journalists face systematic annihilation


“I survived! Now I am a Dissident! Don’t know whether to laugh or cry. I already wrote here that at one newspaper in the Dagestan, journalists struggle with the founders. Those, in the words of journalists wanted to use them as information killers. Potential killers strike. But that case too serious and strange to my mind... Founders gave the list of people who can not be printed in this newspaper, and even... communicate with them inside the walls of editorial offices. And here I am, there is at the forefront of! At the head of the list!The most ridiculous that the newspaper... notes about their travels, where I did not touch the political situation in Zimbabwe, and a current describe where I went... I do not write anything seditious. In politics, or even about... I do not, because I have laziness... Can founders know something about me that I do not know what I did? Maybe I need to “suitcase-station- Israel” (and) not become the second Khodorkovsky?”

The above quote is a roughly translated March 20, 2008 blog entry of Ilyas Shurpayev at http://shurpaev.livejournal.com/ on the website of Odnoklassniki, a Russian social networking site.

What makes the quote to be quoted here is that it’s the last quote from the Russian television journalist who was found dead in his flat in Moscow only hours after posting this blog entry in which he joked that he had become a dissident.

Something somewhere is not right in Russia and its getting more and more dangerous to report, as Shurpayev had reported from all the most dangerous parts of Russia, including Chechnya and his native Dagestan. Found strangled with a belt around his neck and multiple knife wounds, Shurpayev, 32, had recently moved to Moscow from Dagestan, a violence- ridden republic neighbouring Chechnya, the war-torn part of Russia.

Local media reports cited the concierge in his building saying that Shurpayev apparently knew his killers because he called down for two young men to be let in. As usual, the prosecutors told media a criminal investigation has been opened into the case and the possibility that the killing might be related to his work was not ruled out.

The International Federation of Journalists (IFJ) issued a statement calling on the Russian authorities to conduct a thorough investigation into the case, saying the journalist appeared to be a target of media repression. “We fear that this has all the hallmarks of a targeted attack on a journalist who was reporting from the frontlines of conflict on Russia’s borders,” the IFJ’s head Aidan White said in a statement in Brussels.

As the media was still coming to grips with this murder of a fellow journalist, the Interfax news agency citing the Russian state prosecutor Yuri Chaika reported that Gaji Abashilova, the head of the state radio and television in the same Dagestan region was shot dead in the capital Makhachkala. Abashilova, who was shot on the street in Makhachkala by assailants who fired from a car, according to the Interfax report, which added that Chaika would personally take over the investigation into the murder. Abashilov, 58, had also been deputy information minister in the Dagestani government in the past.

With dozens of journalists killed, some like Anna Politkovskaya in 2006, wellknown through their work against well-known figures, others not so well-known on international, or even national levels as they are reporting on local corruption and power-abuse, one fact gets reported crystalclear: that the Russian state is systematically failing to protect journalists with its failure to prosecute these crimes.

On one hand, Russian ex- KGB leaders are striving to bring back the glory of a superpower to Moscow, but on the other, with today’s Russia being allegedly labelled as the most dangerous place to work as a journalist, the modus operandi of their ambitious project is quite murky.

In a war-zone, journalists are aware of the dangers, while in Russia, death stalks in “safe” residential areas. Shurpayev, who was of Dagestani origin, survived the former in Caucasus to die in the latter arena of Moscow as his employer Channel One pointed out in its statement: “His CV includes all the hotspots in the Caucasus... And very often he would work in practically combat-like conditions.”

It’s not the murder of one journalist that kills free media but the failure of society to bring to book the culprits, emboldens the repressive forces to repeat the offence and slow but steady silence the voice of truth.

Obama: Path to Change

Americans at the crossroads of history to lead by example


American presidential elections are not only about money, power and prestige within the world’s most vibrant democracy, but also a guiding light to the believers of democratic principles and human rights followers. In 2008, the world is watching the presidential campaign in the melting pot of civilisations and beaconing land of opportunities for the last centuries, and there is one man, Barack Obama, who has caught the attention like never before in the recent past.

Watching former presidential candidate Bill Richardson endorse his fellow Democratic frontrunner Obama brought out many points why Obama has generated so much interest in the Old Continent and other parts of the world.

Richardson, the governor of New Mexico, symbolises the Hispanic vox populi and was being wooed openly by dynastic presidential runner Hillary Clinton and her husband, the former president, Bill Clinton.

Putting on back burner his personal bonds with his friends the Clintons, and an official relationship with former president Clinton under whom he served as UN ambassador and energy secretary, Richardson was candid in his appeal to the voters while endorsing Obama.

With a flavour of spiritualism sprinkled over pragmatic choice of words, Richardson spoke with his heart and soul about Obama. “There’s something special about this guy… I’ve been trying to figure it out, but it’s very good.” “Your candidacy is a oncein- a-lifetime opportunity for our nation and you are a once in a lifetime leader,” he told Obama.

The much-acclaimed Obama speech on the need for unity in the diversified spectrum of Americans got special mention from Richardson, who himself is of Hispanic origin, in his decision to endorse Obama, who is the son of a “father from Kenya” and “mother from Kansas.”

“I’ve been troubled by the demonisation of immigrants, specifically Hispanics, by too many in this country,” Richardson said. Obama’s “words are one of a courageous, thoughtful leader who understands that a house divided against itself cannot stand.”

“Senator Barack Obama addressed the issue of race with the eloquence and sincerity and decency and optimism we have come to expect of him. “He did not seek to evade tough issues or to soothe us with comforting half-truths. Rather, he inspired us by reminding us of the awesome potential residing in our own responsibility,” he said.

He added: “Senator Obama could have given a safer speech. He is, after all, well ahead in the delegate count for our party’s nomination.” Obama earlier had called for the country to rise above its racial divisions in a speech prompted by the controversy over his former pastor and spiritual advisor Reverend Jeremiah Wright Jr’s incendiary comments about race in sermons.

Obama said, “But the truth is, that isn’t all that I know of the man. The man I met more than 20 years ago is a man who helped introduce me to my Christian faith, a man who spoke to me about our obligations to love one another; to care for the sick and lift up the poor.”

Striking a chord with his supporters, Obama explained in detail, “I have already condemned, in unequivocal terms, the statements of Reverend Wright that have caused such controversy … absolutely – just as I’m sure many of you have heard remarks from your pastors, priests, or rabbis with which you strongly disagreed. But the remarks that have caused this recent firestorm weren’t simply controversial. They weren’t simply a religious leader’s effort to speak out against perceived injustice. Instead, they expressed a profoundly distorted view of this country.”

Not only condemning the remarks, but also asking Americans to get together, Obama added, “As such, Reverend Wright’s comments were not only wrong but divisive, divisive at a time when we need unity; racially-charged at a time when we need to come together to solve a set of monumental problems – two wars, a terrorist threat, a falling economy, a chronic health care crisis and potentially devastating climate change; problems that are neither black or white or Latino or Asian, but rather problems that confront us all.”

Going down memory lane to highlight the struggle for freedom and equality in the American history, Obama said, “And yet words on a parchment would not be enough to deliver slaves from bondage, or provide men and women of every colour and creed their full rights and obligations as citizens of the United States.” “What would be needed... to narrow that gap between the promise of our ideals and the reality of their time,” Obama said.

The voters in the United States of America this year are facing this choice of our time to deliver with their ballot a change in the ongoing dynastic repetition in the US presidential race.

Anyone eligible to vote 32 years ago (or nearly 56 years of age today) in 1976 would have had the fortune to see a presidential ballot without a Bush or a Clinton name on it as, after that, no single ballot paper has escaped a Bush or a Clinton. That says a lot about the dynastic rulers in the democracy of US.

On the other hand, Richardson hinted at an honourable and unselfish move to drop out of the race for Clinton saying, “I’m not going to advise any other candidate when to get in and out of the race.”

Mincing no words to make it clearer, the governor added, “Senator Clinton has a right to stay in the race, but eventually we don’t want to go into the Democratic convention bloodied. This was another reason for my getting in and endorsing, the need to perhaps send a message that we need unity.”

“It is time ... for Democrats to stop fighting amongst ourselves and to prepare for the tough fight we will face against John McCain in the fall,” Richardson said at a rally with Obama in Portland, Oregon.

Last but not least, Richardson reflected on a minor detail from their sitting together during a presidential debate. “I had just been asked a question - I don’t remember which one - and Obama was sitting right next to me. Then the moderator went across the room, I think to Chris Dodd, so I thought I was home free for a while. I wasn’t going to listen to the next question. I was about to say something to Obama when the moderator turned to me and said, ‘So, Gov. Richardson, what do you think of that?’ But I wasn’t paying any attention! I was about to say, ‘Could you repeat the question? I wasn’t listening.’ But I wasn’t about to say I wasn’t listening. I looked at Obama. I was just horrified. And Obama whispered, ‘Katrina. Katrina.’ The question was on Katrina! So I said, ‘On Katrina, my policy . . .’ Obama could have just thrown me under the bus. So I said, ‘Obama that was good of you to do that.’”

Tuesday, March 18, 2008

Tymoshenko upbeat on EU integration

Welcoming international, and especially European business houses to Ukraine, Prime Minister Yulia Tymoshenko said in Brussels that, “It is crucial for the Ukrainian authorities to make foreign business feel comfortable in our country.”

Addressing a galaxy of European industrialists, diplomats and other dignitaries brought together by EU Ukraine Business Council and EGMONT, the Royal Institute for International Relations based in Brussels, Tymoshenko said, “We aspire to be a favourable country for foreign investments.”

Comparing the problems faced by Ukraine with the biggest tsunami in the world, the prime minister said, “This is the tsunami of counteraction because the society is used to live in a half shadow economic situation”

Acknowledging that Kiev is facing tough opposition to the proposed reforms, Tymoshenko assured business community saying, “But our government team is able to accept all challenges and demonstrate results.” “We are confident of our power, unity of our democratic team, including consolidation of the Government and President’s team and of the fact that Ukraine will become a member of the European Union,” Tymoshenko added.

Answering questions from the audience, the prime minister gave a balancing act answer about relations with Russia and the European Union.

Pointing out that European integration is supported by main colours of political spectrum and vox populi in Ukraine, Tymoshenko said the country is taking “serious steps” to get closer to membership of the European Union.

But asked to give a timeline for membership, Tymoshenko said she would prefer not to give a specific date just in case success is not achieved by then. Outlining the roadmap for reaching the EU membership, Tymoshenko stressed the importance of economic integration, particularly freeing trade environment and letting relations develop without economic barriers.

Basing her prediction on current GDP levels, Tymoshenko said Ukraine “could be a serious economic partner,” as Kiev expects inflation to reach half of 2007 levels.

Highlighting the role of privatisation of key sectors, Tymoshenko said Kiev is planning to privatise its communications sector in the coming months, as well as its energy distribution network.

Accepting the fact that Ukraine is currently fully dependent on Russian energy networks, the premier said there is more close cooperation between Moscow and Kiev in different branches of industry, from outer space to machine-building. But this is important both to Ukraine and to Russia, underlined Tymoshenko.

Lamenting inefficient production and corruption as the stumbling blocks to utilising Ukraine’s own gas resources, the premier said, “Licenses are issued but there is no exploration and zero efficiency.” Tymoshenko promised that Kiev is set to float legislation which would enable investors in this sector to build a more secure relationship with the state on the basis of production-sharing agreements.

Tymoshenko negated the suggestion that Ukraine has to choose between building relations with the EU or Russia, saying, “Either, or is incorrect.” Blaming Ukrainian politicians before 2004, who she said had put national interests second to other interests, thus strengthening Kiev’s energy and political dependency on Russia, she stressed that Kiev is now set to build relations with Russia as equal partners, diminishing its energy dependency on the big neighbour.

Reiterating, “Integration is hopefully towards the EU. Ukraine decided that a long time ago,” Tymoshenko concluded, “We are not flirting anymore (but) we are seriously integrating.”

“Better job = Better pay”- Barroso

Tripartite social summit cites more attention for education

The European Union is a far-away institution that does not care for ordinary European citizens and this was the notion that the “Tripartite Social Summit for Growth and Employment: An Instrument of Social Dialogue,” addressed prior to the European Council last week.

Answering journalists’ questions, Jose Manuel Barroso, President of the European Commission, defined a better job saying, “Better jobs are jobs that first of all better paid.” Those need to be also “sustainable,” he added.

Europeans fighting rising prices and lower wages were addressed as Barroso continued, “We cannot create a competitive Europe if we leave some citizens on the margins.”

Reiterating the importance of the Lisbon Strategy, Barroso said, “Lisbon strategy is not growth for growth sake but (our) aim is a modern Europe. A Social Europe and an environmental friendly Europe.”

Among others present at the press conference were G. Toifel, President, UEAPME; C. Einem, President, CEEP; E. A. Seilliere, President, BUSINESSEUROPE; J. Monks, Secretary General, ETUC/CES; J. Jansa, Prime Minister of Slovenia and President of rotating EU Council; Vladimir Spidla, European Commissioner for Social Affairs.

Slovenian Prime Minister Janez Jansa talked of health and safety of work place calling Lisbon Agenda reforms as not only just “EU level” but also to be addressed at “national level” and at the level of “citizens.”

Reiterating, “the renewed Lisbon Strategy is working well and is delivering results,” he added, “as shown by the fact that the basis of the European economy is healthy, that 6.5 million new jobs have been created, that the budget deficit has been halved in comparison with 2005 and that the European growth rate stands at 2.9 percent.”

Another area Jansa stressed was wind energy where the prime minister said, “employment tripled.”

Calling upon journalists to do the needful, the Slovenian prime minister said, “Communication is the key. We need to market our objectives in a better way.”

Monks, representing ETUC, called for “free movement,” to create more “opportunities for new jobs,” and reiterated, “Lisbon has picked up in last three years.”

ETUC gave a warning, saying that the situation on ground was heading from bad to worse as there were 17 million workers in the rich EU bloc living in poverty while another 31 million work for starvation wages. There are fewer and fewer jobs with security while more and more lowpaying jobs are being created, ETUC had lamented.

In this context, talk of “flexicurity,” took an important dimension. Seilliere, president of BUSINESSEUROPE, demanded more flexicurity, saying: “It is about essentially improving the employability of workers.” “Social partnership is one of the main issues,” he added.

Political pundits and social observers however were sceptical of the final outcome in terms of “walk instead of talk,” pointing out that this is just rhetoric that has been repeated once a year at social summits.

Another social strategist added, on condition of anonymity, “There is no solid new agenda at this summit and Slovenian presidency just wants to get over it without a major failure. The social summit will be the highlight of the overall summit.”

Whitewash Summit

Lots of talk, little action, climate change back



The European Summit of 27 leaders of member states last week, under Slovenia’s rotating presidency, hardly raised any expectations, nor any eyebrows, as leaders came, attended and left. The subject of Climate Change, to which Spring Council 2007 was entirely devoted, was once again on top of the agenda for 2008, with leaders trying to balance industrial lobby demands with greenhouse gas emission cuts.

European Commission President Jose Manuel Barroso, who, according to the EU grapevine is lobbying for a second term, was all smiles as he stressed his words to please both the industrial sector and European citizens.

Barroso spoke “in favour of keeping jobs and industry in Europe,” and promised to not only provide an EU-wide breathing space for industries but also get “an international agreement” on carbon dioxide (CO2) emissions.

But an argument to use environmental concessions to keep EU-wide industries on the Continent seemed less convincing as environmental pundits and industry gurus confided on the sidelines of the Spring EU Summit.

Claudia Delpero of WWF told New Europe, “A global agreement will help make industries happier, because rules will be applied to everyone. But a strong global agreement will not be possible without strong European legislation.”

Explaining the underlying reasons for industries to shift locations, Delpero said, “The real question is: would weak environmental laws really keep businesses in Europe? History has shown that major factors for relocation are proximity to markets and labour costs, while environmental laws play only a small role in the relocation factor.

“European businesses should rather take this opportunity to become global leaders in clean technologies. The American car industry provides a very good example: after refusing the idea of fuel standards, the market is now overtaken by cleaner product from Asia. Europe should learn from history and avoid mistakes already seen in the past.”

German Chancellor Angela Merkel echoed the doubts about an international agreement saying, “If there is no international deal, we should already have a (law) ready on how to deal with energy-intensive industries, rather than only starting to think about it if nobody else joins us.”

The European Commission on January 23 had proposed an auction system for CO2 for industries, who immediately protested, arguing this would make it impossible for them to compete with firms in countries with less stringent environmental rules.

The Commission responded by promising to study the problem with an eye to proposing solutions by 2011 in the belief that to do so earlier would damage the EU’s position in global talks on climate change, which are set to culminate in Copenhagen in December 2009.

But at the Summit the conclusions insisted that the issue be “analysed and addressed urgently in the new (law), so that if international negotiations fail, appropriate measures can be taken.”

Moreover, the 27 leaders also diluted ambitious proposals from Nicolas Sarkozy on the creation of a so-called “Union for the Mediterranean” to promote cooperation in the area.

The first public salvo was fired by the European Parliament President Hans-Gert Poettering, insisting on a parliamentary dimension of the Union for the Mediterranean. Calling for an explicit reference to the Barcelona Process (launched in 1995 for Mediterranean region) said, “I am convinced that the European Commission will fully take into account the parliamentary dimension of the Union for the Mediterranean in its proposal and that the European Parliament will be fully involved in the debate which will lead to the final decisions on this project.”

According to sources familiar with closed-door talks, there were reservations from member states from Central and Eastern Europe that a Union for the Mediterranean would divert precious EU funds away from the region.

Turkey also immediately was in the news as Ankara got the notion that by being invited to join Union for the Mediterranean, its EU membership application will be left on the back burner forever.

Answering a question from a Turkish journalist, Slovenian Premier Janez Jansa said, “Turkey was not mentioned at the talks.” Saving the situation, he said, “The project for a Union for the Mediterranean was presented as an upgrade of the Barcelona process.” “And sometimes, changes get a new name,” he concluded.

Sunday, March 9, 2008

Decline of the American dollar

Fiscal policies over the years take toll on the greenback

The days when the greenback ruled with absolute supremacy and simultaneously commanded the unparalleled confidence of chiefs of international and domestic financial institutions along with the man in the street in the remotest parts of the planet are over. The American dollar is no more “The Currency” that can be relied on for value, as was evident by a recent CNN news clip showing an antique store in New York preferring Euro over the local currency.

Since World War II, when the American dollar started replacing gold as a means of transaction on the international level, the dollar has taken some hard knocks in recent years.

With the launch of the Euro nearly a decade ago, much was written in the pro-dollar media and EMU, as the Eurozone is called, and it was compared with the “EMU,” a bird that cannot fly. But then, compared to the launch and subsequent drop as the nascent currency took baby steps, the Euro has come of age and has crossed the threshold One Euro=USD 1.5 plus. And the dollar has also lost against the other leading currencies, like the Japanese Yen and British Pound.

With the way things are going, one must understand why and when the American dollar got to that place on the pedestal. Only then does it become clear what is happening now. As mentioned earlier, a walk down memory lane shows that till World War II the exchange rates of major currencies were reflected in terms of the price of gold in the respective countries, but with the manipulation of costs of other goods then, gold was a growing discomfort among trading partners across the globe, and the dollar came as a suitable solution.

World War II ended with the emergence of the United States as the dominant military and economic powerhouse, and as countries gathered to this epiccentre for military and financial support, the dollar emerged as the financial powerpoint of the financial world.

With the issuing of US government securities there was an added charm of earning interest over dollar deposits.But to the discerning eye, there was a Catch-22 situation that stayed afloat all these decades - and still is. The use and abuse of the technical term “Balance of Payments” was so rampant by the US that one shudders to look at the figures over the years. The United States consumed more than it produced, financing the payments with printed paper and all had been well till 1971 arrived.

The US devalued the “International Currency” unilaterally. Internationally-held dollar reserves overnight lost value and that was quite a hard knock for some of the poor countries of the world.Five years later, in 1976, came the Jamaican Agreement that gave the financial world a floating exchange rate system where the markets started playing a lead role.

But again, it was not a free float and, instead, government intervention in the form of buying and selling determines the final results at the end of the day.With the arrival of the Euro in the world F/X (foreign exchange) market scene, things started changing.

And let us not forget that the Euro has replaced 15 European currencies, and some of them, like the German mark, French franc and Italian lira were backed by strong economic and industrial giants of the world.

With the Euro surging not only in value but also as a dependable currency, the world commodity markets, especially relating to oil, will start contemplating a switch to the Euro to protect themselves against instability or the falling dollar.

The US administration will definitely want to sabotage such a move by hook or crook as its financial survival depends on the role of dollar as a legitimate international currency. Now, a look at what is really going on behind the scene.

US statistic reports have repeatedly shown the American C/A (current account) deficit has expanded continuously with billions in fiscal deficit.With China shifting some of its foreign reserves into Euro, there is already a warning ringing for the United States as more countries shift to Euro; more falls in the dollar will result.

Add to those factors the role played by the locomotive economies of Asia including China and India growing by leaps and bounds in the current years. But the financial mechanism needed to keep the dollar at a price that will sustain the US C/A deficit without putting pressure on its import/export ratio, which in turn enhances or erodes the lifestyle of its citizens, will not garner support internationally over a long-term period and US will have to pay the price at some point.

Saturday, February 23, 2008

European Parliament faces fraud enquiry

MEP Davies confirms "OLAF has the report"


European Anti-Fraud Office (OLAF) moved in swiftly on February 22, 2008 to secure a copy of "The Document," from the European parliament within 24 hours of requesting a copy, about which one member of the European Parliament (MEP) quipped, "This report is dynamite." The report prepared by European parliament's internal auditors focuses on how MEPs spent or allegedly misspent the taxpayers’ money.

So perilous is the extent of the fraud, it is claimed by a parliamentary source that the report can only be seen by members of the Budget Control Committee in a secret room, under surveillance and without taking notes or making copies.

Realising the gravity and extent of the possible misuse of public funds, Chris Davies, the young British MEP took the first step to bring it to light calling upon Franz Bruener, OLAF's Director General in a letter (see below), "As a member of the European Parliament's Budget Control Committee I was this morning permitted to read a copy of Internal Audit Report 06/02 on the parliamentary assistance allowance paid to MEPs for the employment of their staff. Currently I believe this amounts annually to more than 140 million Euro and represents some 10 percent of the Parliament's total expenditure."

MEP Davies told this journalist, "I believe the auditor's report was intended to be published and I think it a disgrace that it is being kept secret by the parliamentary authorities. The Parliament preaches the virtues of transparency and openness and it should start to practice them. The next step is that a copy should be given to every MEP and made public. Let the taxpayers judge what it says for themselves."

Asked to comment on reactions from fellow MEPs, Davies noted, "Support yes from some MEPs (Dutch for example, who have to work within a strong code of conduct agreed by the parties in that country)." He admitted to "some pressure from other British MEPs to shut up. Never on the basis that they are doing something wrong, but always from those who are passionate pro-Europeans, know how difficult it is to argue the pro-EU case in Britain, and believe that these revelations undermine the reputation of the Parliament. They also argue that attempts are being made to achieve reform."

MEP Davies said, "Too often it is a case of blame the messenger instead of blaming the cheats."

According to a parliamentary source, the report was kept in a secret room in an undisclosed location protected by biometric locks and security guards. Those few who enter can only do so after signing confidentiality agreements, and are prohibited from discussing what they discover inside.

The reliable source said on a condition of anonymity, "The secret room houses a confidential dossier on the ‘extensive, widespread and criminal abuse’ by Euro-MPs of staff allowances. So explosive are the figures that officials are terrified by the damage it could do should its contents be revealed to the public."

According to sources who have seen the report, the secret enquiry documents abuses of staff allowances by a sample group of 167 Euro MPs. Although the report does not name and shame any individual MEP, the detailed account of how in an unaccountable way the tax-payers' hard earned money is squandered with no taps or checks is appalling.
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According to another reliable source, "It is widely rumoured that Italian MEPs have in many cases set up shadow companies/organisations to manage their staff budget. These organisations comply with the Parliament's rules but actually allow the money to be channelled towards individuals or political parties."

Asked to comment on it, MEP Davies said, "But what can you do? I am told that there is no mention whatsoever of this scandal in the Italian or Greek press, so how do you generate any pressure for change?"

Explaining the way the alleged fraud may have worked, MEP Davies added, "The Parliament provides a second pension scheme that the majority of MEPs have joined voluntarily. Parliament pays two thirds (GBP 18,000 pa or 24,000 Euro approximately) and the MEP is supposed to pay one third (GBP 9000 pa or 12,000 Euro). But the MEPs' contribution is deducted from their office costs allowance ‘for administrative convenience.’"

The catch lies in the fact that MEPs are supposed to pay it back personally but then the question arises how many do and how many just are too lazy to make that transfer. Commenting on this MEP Davies said, "I regard this equivalent to embezzlement and it is another disgrace that the Parliament has refused to change the arrangements that permit it."

Moreover, the fact to be noted is that the office allowance is worth more than GBP 30,000 pa (40,000 Euro) and "NO RECEIPTS WHATSOEVER" have to be provided to justify expenditure according to MEP Davies.

In the light of all this there was a panic among the lawmakers at what damage the report can inflict in the run-up to the European parliamentary elections in 2009.

"I love the Parliament. I am proud of the work that I and my colleagues do as MEPs. But I am angry that we allow procedures to exist that bring us all into contempt," MEP Davies concluded.

The report, its findings and its recommendations, are due to be discussed at the next Tuesday (February 26) meeting of the Budget Control Committee under the item 2006 discharge: EC general budget.

------------------------

COPY OF LETTER TO THE EU ANTI-FRAUD OFFICE


Mr Franz Bruener
Director-General
OLAF

Dear Mr Bruener

As a member of the European Parliament's Budget Control Committee I was this morning permitted to read a copy of Internal Audit Report 06/02 on the parliamentary assistance allowance paid to MEPs for the employment of their staff. Currently I believe this amounts annually to more than €140 million and represents some 10% of the Parliament's total expenditure.

Disgracefully in my view the document has been declared confidential under the Parliament's rules, pursuant to Article 4 of Regulation (EC) No 1049/2001, that gives such authority to the President of Parliament, the chairmen of the parliamentary committees concerned and the Secretary-General and/or any person they have duly authorised by written delegation. I was therefore allowed to read the document only under supervision and was not allowed to make notes. Members authorised to read it are required to sign a confidentiality statement that prohibits the dissemination of the information.

The report, its findings and its recommendations, are due to be discussed at the meeting of the Budget Control Committee on 26 February under the item 2006 discharge: EC general budget.

OLAF was established to uphold the principle that the European Institutions have a duty to guarantee, with regard to the taxpayer, the best use of their money and in particular to fight as effectively as possible against fraud and any other illegal activity harmful to the financial interests of the Community.

In my view the findings of the Parliament's internal auditors fall within OLAF's terms of reference.

If a copy of report 06/02 has not yet been provided to you I believe you should insist that the parliamentary authorities provide you with one, and thereafter that the auditors should give you such further information as may be needed to commence investigations against individuals.

There is a great reluctance amongst some MEPs to ensure that the financial procedures of the European Parliament in relation to its members are put on the same sound basis that we would expect of other public institutions. Maybe when some MEPs are named, exposed for defrauding the Parliament and the public, and are sent to prison, a more acceptable approach will be adopted.

I would be pleased to discuss this matter with yourself or Ms Heinkelmann.
Yours faithfully

Chris Davies MEP
European Parliament