Kessler upbeat after OLAF’s working method described as being ‘rotten to the core’

Updated at 6:51pm with OLAF and Giovanni Kessler statement

A report prepared by OLAF's supevisory committee on the investigation into allegations of bribery concerning former EU health commissioner John Dalli, strongly criticises the EU's chief of anti-fraud Giovanni Kessler of having taken a personal interest in the case and comprimising his impartiality.

Dalli resigned on 16 October but was not given access to the OLAF investigation conducted on Silvio Zammit, a businessman accused in court of having solicited a €60 million bribe from Swedish Match to reverse an EU ban on the retail of snus.

The five-person committee's 2012 report, extracts of which have been seen by MaltaToday, were presented today to MEPs in the European Parliament's budgetary control committee.

MEPs shadowing OLAF were critical of the actions by Giovanni Kessler upon reading the report, which claims OLAF asked third parties to record a personal conversation in breach of privacy, as well as requested telephone records which the supervisory committee belives was without a legal basis.

"We're seeing breaches of human rights that force us to ask in which country we are living today... has this been happening and nobody noticed what has been going on? This is a fire out of control," the EPP's Inge Graessle said.

"This procedure is out of control: it's the working method of the director-general. It is rotten right to the core," Graessle said, pointing out that the supervisory committee's report had been thorough about the lack of legality in the OLAF procedure employed during the investigation of the Dalli allegations.

"The committee has been clear about describing the actions of Giovanni Kessler as having been unacceptable."

Green MEP Bart Staes called on Giovanni Kessler "to have a long and hard think" on the supervisory committee's statements.

"Why did the President of the European Commission at the time the Swedish Match complaint was received, didn't check whether the supervisory committee was being prevented from doing its duty, whether the appropriate procedures had been respected, whether fundamental rights were being respected or not? I'm very indignant at the way things have taken place," Staes said.

MEPs Jan Mulder and Jens Geier demanded a special budgetary control committee session on the the report so that Kessler can face questions from MEPs at a later stage.

Giovanni Kessler's reaction

OLAF chief Giovanni Kessler defended his office from accusations that he had guarded his office from the scrutiny of the supervisory committee. "There is a healthy and good relation between the committee and OLAF," Kessler said. "There are no problems of cooperation, as has been recognised in the report."

Kessler strongly rejected allegations that OLAF had made false statements in one of its reports, influenced a witness to make a false statement to the European Parliament, or had acted illegally in other ways.

"The Supervisory Committee's report makes no such claims," Kessler said, expressing regret that "misleading information and leaks had been circulated in an attempt to present the report as making statements it did not in fact make, in particular concerning violation of fundamental rights and procedural guarantees."

In a statement from OLAF, Kessler later said the supervisory committee's "comprehensive and constructive report" had welcomed changes made during the year to OLAF's  internal procedures and organisation which were designed to increase efficiency, to reinforce the legality of investigations and to improve the protection of fundamental rights.

Kessler shares the committee's view that 2012 had been a difficult year, particularly in the early months, because the arrival of a new Supervisory Committee had coincided with a significant change in working methods in OLAF and with a substantial reorganisation of the office.

"Despite these difficulties working arrangements had been agreed between OLAF and the Committee in September 2012, since when cooperation had improved, as the Supervisory Committee's Report acknowledges," Kessler said.

Kessler said the committee's observations of shortcomings in individual cases "were mainly due to the insufficiency of the earlier procedural rules."

The OLAF chief also decried press leaks of the supervisory committee's report. "We have to stop this spiral of leaks and manipulation of words, and make a common appeal to the competent national authorities to start a procedure where everything is made open and transparent for people to see," Kessler said.

He also urged Maltese authorities to publish the OLAF report so that there could be a transparent discussion about the matter.

Supervisory Committee's report

In its summary, the committee said that Kessler received a letter from the Commission's secretary-general Catherine Day on 25 May, 2012 at 8:15pm, specifying the complaint received from Swedish Match on 21 May.

EC President José Barroso himself asked that OLAF gives this case priority handling.

OLAF's investigation selection and review unit concluded its own evaluation of the allegations in less than 24 hours, calling for the appointment of a special investigation team.

The SC said that OLAF's checks were limited to the existence of the people and companies mentioned in the complaint from Swedish Match. "Otherwise no further indications of further investigation or collection of information into the credibility of the allegations was carried out," the supervisory committee said, saying that OLAF did not observer its ISIP rules (instructions to staff on investigative procedures).

Furthermore, the committee claimed OLAF's investigation selection and review unit did not carry out "a reasonable assessment of the facts".

It also criticised the fact that director-general Giovanni Kessler "personally and directly participated in several aspects of the investigation, including in the gathering of testimonies, on-site inspections and consultations of person of interest, and in so doing, infringed the principle of impartiality and opened himself up to a conflict of interest since a proper assessment of the actions of OLAF was not possible."

The committee further criticised Kessler for failing to distance himself "in an objectively coherent and lawful manner" from either the internal or external investigations.

It said that Kessler designated Barroso's office, and not Swedish Match, as the source of information from which his investigation was launched, violating OLAF procedure.

At one point during its investigation, Kessler demanded a second extension to the investigation, on the possibility of fraudulent activities affecting the EU's financial interests, supposedly based on private recordings of a telephone conversation. But although OLAF's investigation and review unit were doubtful, Kessler's decision to go ahead was "not based on an assessment of the accuracy and reliability of witness statements or on a reasonable evaluation of the information OLAF had".

Kessler was accused of asking the Maltese police for telephone records of incoming and outgoing phone calls "without a legal basis" or having it cleared by OLAF's investigation and review unit.

The committee believes that OLAF's request for telephone data could have violated the right to privacy.

OLAF's lead investigators also encouraged a witness to record a private telephone call but its content was not transcribed and included in the final investigators' report.

Kessler was accused of not having told the subjects of the investigation itself what the investigation concerned throuhgout its fourt-month duration, drawing three conclusions with regard to one person - ostensibly John Dalli - who had only been questioned on allegations concerning the first two conclusions.

The committee said Kessler did not ensure that this person could answer to the third allegations.

He was said to have "failed to inform the person of all the relevant facts clearly and accurately."

The final report was delivered to the Maltese Attorney General on 19 October - three days after John Dalli's resignation at Barroso's request - "preventing the Supervisory Committee from submitting its comments five days prior to this transfer".

Kessler was also accused of failing to give the committee "sufficiently meaningful documentation" to allow them to fulfil their duties of inspecting the report.