OLAF meeting with MEPs raises questions over chairman’s resignation and dual role

MEPs who spoke to MaltaToday say OLAF's supervisory committee - which oversees the way the anti-fraud office handles its investigations - was forwarded the report of the investigation into former EU commissioner John Dalli, after it was transmitted to the Maltese Attorney General, a discrepancy that could be at the heart of the recent resignation of supervisory committee chairman Christiaan Timmermans.

According to a source privy to this meeting, OLAF director-general Giovanni Kessler told MEPs during a closed-doors meeting last week that the Dalli investigation was transmitted to the OLAF supervisory committee on 23 October 2012 - after having being first handed to the Attorney General on 19 October.

The date has particular significance, since MEPs from the budgetary control committee who met Kessler were adamant to know what prompted the resignation of Timmermans on 22 October, who now sits on the committee as a member.

To go by the 25 October statement of new committee chairman Johan Denolf, the committee was "formally informed... of the existence of this case" by Kessler on 17 October - the day after Dalli's resignation - and that the OLAF director intended to transfer it to the Attorney General: a statement that perhaps does not explain whether the committee had the investigation in hand at the time.

There is disagreement on whether this means OLAF was in breach of its own rules and the European Court of Justice's decision in the seminal Franchet-Byk case.

In that judgement, the Court stated that the supervisory committee had to be informed of the conclusions of an OLAF investigation into two Eurostat civil servants, before that information was forwarded to the national judicial authorities in France and Luxembourg.

However an OLAF spokesperson last week told MaltaToday that, while the anti-fraud office must forward its reports to the supervisory committee before they are sent to national judicial authorities, "in the Dalli case OLAF informed the Supervisory Committee before the report was transmitted to the judicial authorities in Malta and therefore complied with its obligation.

"The report arrived in Malta on October 19. There is no legal requirement (Regulation 1073, Franchet and Byk decision) to delay the transmission to the national authorities pending an opinion from the supervisory committee," the spokesperson said.

On his part, John Dalli is raising doubts on the suitability of the supervisory committee member Rita Schembri, whom he says was involved in the investigation of his case.

Dalli claims that he should have been informed of the investigation's conclusions and the reasoning behind the "circumstantial evidence" which allegedly shows he was aware of Silvio Zammit's attempt to request money from Swedish tobacco company Swedish Match, to influence Dalli's position on possible future legislative proposal on tobacco products. The complaint to the EC by Swedish Match led to an investigation by OLAF in May 2012.

The main role of the supervisory committee, which must be composed of "of five independent outside persons", is to ensure the respect of the fundamental rights of persons investigated by OLAF, but the committee is neither allowed to get involved in ongoing investigations before a case can be closed.

Dalli has claimed that Schembri - the permanent secretary heading the OPM's internal audit and investigations department (IAID) and the anti-fraud coordinating service (Afcos) - was "personally involved" in the investigation, having been present during OLAF's interrogations held in Malta on the Dalli case.

In an interview on PBS's Dissett, Dalli said the Maltese government "was aware of the investigation and was being kept informed step-by-step" by Rita Schembri, thanks to her dual role as OLAF supervisory committee member and head of Afcos in Malta, the liaison unit with OLAF.

As head of Afcos, Schembri communicated information about the Dalli investigation as early as 5 July to the Office of the Prime Minister.

There is no smoking gun of any irregularity in this dual role, since Schembri may have led the investigation as Afcos head and later withdrew from the supervisory committee's examination of the Dalli case on 17 October, a day after the commissioner's resignation.

Dalli claimed the supervisory committee's first meeting on his case was on 22 October, the day a new chairman was appointed instead of Christiaan Timmermans - whom OLAF says resigned for personal reasons. "OLAF tried to force the report to be fast-tracked by means of a quick superficial review, and that the supervisory board refused, insisting on the need of a detailed review in writing of what they had seen," Dalli said.

"As far as I am informed, [the supervisory committee] has not yet approved the report," Dalli added. The review is expected to be finalised for 20 November.

"It is ridiculous that a person involved in direct contact with OLAF over investigations is also concurrently in a position where he or she is expected to supervise and scrutinise OLAF itself," he said of Schembri's dual role.