98-100 Heal Thyself

Anonyme, « Heal Thyself », The Economist, 13 avril 1991, pp. 48-50.


European Parliament
Heal thyself
Our Brussels correspondent argues that the European Parliament needs to put its house in order if it is to deserve any more power
The parliament is often its own worst enemy. It craves more clout, yet sometimes behaves in ways that make it seem unworthy of the powers it already has: to amend some EC legislation and to approve the Community's budget. It is not just its penchant for emergency resolutions on distant events. The 518 Euro-MPs, who meet for one week a month in Strasbourg, are served by a bureaucracy of 3,600 officials which costs more than 500m ecus ($600m) a year to run. Efficiency is sapped by rivalries of nationality and party politics, and by the manoeuvrings of shadowy groups such as the freemasons.
The parliament is like no other in the world. It has neither majority nor opposition. Its members come from 66 parties, who combine into ten groups. These groups have representatives on the Bureau, the committee of senior Euro--MPs which runs the parliament’s affairs. The parliament's peripatetic existence - committees meet in Brussels but most officials are based in Luxembourg - does nothing to help good management. Top officials often travel from Luxembourg to Brussels and back several times in a day. The cost of having to duplicate or triplicate some jobs and offices is equivalent to 15% of the parliament's budget. Most Euro--MPs want to settle in Brussels, but the governments of Luxembourg and France insist that the parliament remains a travelling circus. The practice of working in nine languages only adds to the confusion. Interpreters and translators make up 35% of the payroll.
The parliament's top officials, the directors--general, each earn about BFr350,000 ($10,000) a month (mostly tax--free) for running a "directorate". Many of them lack the forcefulness of their equivalents in the European Commission. Whereas in the commission senior appointments depend on nationality and ability, in the parliament politics is a further complication. The Bureau's decisions on jobs often reflect a deal between political groups: a Socialist Official, for example, will take one post and a Christian Democrat another. The political groups influence appointments down to the level known as A3 (A7 being the lowest administrative grade and Al the highest, a director-general).
Lobbying on behalf of national or party interests, although damaging to good management, is at least open and visible to all. The influence of freemasons is more insidious. Many officials claim that freemasons have too much sway over appointments and promotions. An attempt this year to force out the parliament's financial controller has revived rows over freemasonry that go back a decade.
The de Compte affair
In 1982 the Court of Auditors, the EC's financial watchdog, discovered that BFr4.1m had gone missing from the Euro--MPs' cash office. In July 1980 Henri de Compte, who ran the cash office, had shifted 400,000 pounds sterling (then worth $950,000) from the parliament's current account to an undeclared deposit account at the Midland Bank in London. In September and November 1981 Mr de Compte tried to cash two cheques worth 52,000 pounds sterling on the deposit account (the amount of interest that had accrued, and equivalent to some BFr4.1m at the time).
But British banks did nor allow cheque withdrawals from deposit accounts. So, although Mr de Compte succeeded in cashing the cheques, Midland debited the current account. But for that quirk, the Court of Auditors might never have sported the problem, for these transactions were not recorded in the parliament's books at the time. To this day the parliament's accounts each year show a gap of Bfr4.1m.
There was no evidence to suggest that Mr de Compte had committed a criminal offence. But the parliament's then president, Piet Dankert, moved him to another post and laid disciplinary charges against him for exceeding his responsibilities and for breaching principles of sound financial management. There was strong resistance to punishing Mr de Compte: among his defenders were officials and Euro--MPs from French masonic lodges. Mr Dankert was unable to sack him.
In 1985 the Court of Auditors produced a detailed report on the missing BFr4.1m. It has never been published. Having described "irregular" behaviour and "serious negligence" in the cash office, it comments that "the attempt to conceal the deficit by manipulation runs counter to any regular financial management." The report concludes: The accounting officer [Mr de Compte] and the imprest holder [Klaus Offerman] must be held responsible."
Armed with this report, Lord Plumb, who was by then president, at last managed to demote Mr de Compte from A3 to A7 grade in 1988. But Mr de Compte appealed to the European Court of Justice, and after his retirement in 1989 drew an A3 pension. The Court of First Instance heard his appeal in March but has not yet ruled on it.
Mr de Compte claims that when he cashed the two cheques he put the money straight into the cash office's safe, although there is no entry in the books until February 1982 (the Court of Auditors says chat entry was made after it checked the books in March 1982). Mr de Compte's defence rests on the claim that the two cheques he cashed and the missing BFr4.lm are totally unrelated. He says the loss stems from accumulated mismanagement over the years and that, if there was wrongdoing, it is unfair to single him out as a scapegoat rather than his subordinates. He also points out that in 1984 the parliament voted to approve his handling of the 1981 accounts.
His demotion angered his supporters. Several of those who battled against him claim that their careers have subsequently suffered from victimisation by masons. France's two leading masonic lodges are well represented in the parliament: the Grand Orient, which leans to the left, and the right--of--centre Grande Loge. Masons of all hues and nationalities appear at times to collaborate.
Ever since freemasonry was invented, in Britain in the late 17th century, as a secret society dedicated to universal brotherhood and truth, many masons have enriched the world -- Wolfgang Amadeus Mozart and George Washington among them. But some masons have failed to keep to high ideals and have used the secret brotherhood as a way of enriching themselves.
Masonic influence in the European Parliament is especially strong in the directorate for administration. Among its responsibilities are buildings and property development, which account for a fifth of the parliament's budget. The masons' critics reckon that, of nine officials of director--general rank, three are masons. Of the three, two told The Economist they were not and one declined an interview.

Among Euro--MPs masonry is commonest in parties with anticlerical origins. One senior member of the French Socialist Party estimates that about a third of its Euro--MPs are masons. Several Euro-MPs describe this as harmless. Says Lord Plumb: "There are a lot of masons at the top of the administration, but since they do not use their influence improperly it is not a problem." Marijke Van Hemeldonck, a Flemish Socialist, says that freemasonry is insignificant in the parliament. "What worries me is the influence of the farming and industrial lobbies, and Opus Dei and Oxbridge."
O'Hannrachain's crusade
Eoghan O'Hannrachain is an officious, pernickety Irishman whose job, as financial controller, is to veto items of spending when the financial regulations have not been followed. Several times a year he wields his veto, often only to be overruled by Enrique Baron, the parliament's current president.
The Court of Auditors does not like this. It commented in a report published last December that the six overrulings in 1989 "authorised the maintenance of measures which did not comply with the rules in force." One of the six concerned a conference in Barbados, where officials and Euro-MPs met representatives of third--world countries. Mr O'Hannrachain had withheld approval because costs overran the 300,000 ecus budget by about 30%. He was overruled so that the Barbadian hoteliers could be paid; such practicalities sometimes make an overruling necessary.
This year three staff from the canteen and the bookshop with part--time contracts were given permanent status. Mr O'Hannrachain withheld authorisation because normal recruitment procedures had not been followed, but he was overruled.
Mr O'Hannrachain had made enemies when, in 1987, he refused to authorise spending on a warehouse in Zaventem, a suburb of Brussels. The director--general of administration, Jean Feidt, a French Socialist, had negotiated to rent the warehouse for three years as a store for the parliament's stationery; two alternative sites under consideration were cheaper. Because of clerical errors, the estimated bill for the warehouse's rent was three times what it should have been, and bills for gas and electricity were inflated by ten. But the parliament was stuck with the contract.
Resistance to Mr O'Hannrachain grew last year when he took a stem line over spending on computers. A project known as BUDG was supposed to provide a management--information system for the parliament. After 3m ecus had been spent without the system being delivered, Mr O'Hannrachain refused to sanction further payments. BUDG had to be abandoned.
Another project, OVIDE 2, was supposed to give members access to useful information such as agendas and resolutions, but was years behind schedule. The director of computing, Girard Bokanowski, re-negotiated the contract himself so that some penalty clauses for late delivery were waived. Mr O'Hannrachain intervened, and Mr Bokanowski was eventually given another job of similar rank.
Mr Bokanowski's sympathisers -- including French compatriots and some masons -- accused Mr O'Hannrachain of taking policy decisions rather than merely checking that people were following the rules. Yves Galland, a vice--president of the parliament, wrote to the president, Mr Baron, mentioning 12 cases where, he alleged, Mr O'Hannrachain had made mistakes. The financial controller, said the letter, was guilty of "financial McCarthyism". When asked about freemasonry, Mr Galland replies: "I have never heard about masonic influence in the parliament -- though I am the first president of the French Radical Party not to be a mason."
John Tomlinson, a Labour Euro--MP, has written a report for the budgetary--control committee which rebuffs the complaints against Mr Ohannrachain. "The financial controller must be seen to be independent of the administration," Mr Tomlinson says. He suggests that any overrulings should be on the advice of the budgetary--control committee and not, as at present, on the advice of the secretary--general. Mr Tomlinson has been baffled by break--ins to his office which have disturbed files but left valuables untouched. Of the masons he says: "They could prove they are as innocent as they say they are by agreeing to a register of masonic interests for members and officials."
With a little help from some friends
The parliament is a poor manager of staff. Its procedures for hiring and promoting are cumbersome. Many staff work much less than the prescribed 37.5 hours a week. Nobody can remember a sacking, except for the case of one usher who was regularly drunk on duty.
"Senior officials stay too long in the same job," says Diemut Theato, a German Christian Democratic Euro--MP. She is concerned about overstaffing, but adds: "How many national administrations could cope with moving between three sites and still deal flexibility with members' needs?"
Enrico Vinci, the secretary-general, is a master of improvisation who helps ensure that the administration works, in the sense that committees produce their reports and members receive the right documents at the right time in the right language. His flair for organisation is aided by an elephantine memory and Sicilian charm. But he cannot run things the way he wants, as he is under constant pressure from the political groups. Even Mr Vinci's admirers feel that he is at times too tolerant of human frailty.
The method of recruiting is too open to abuse. Candidates who pass an exam go forward to a list, from which they may later be chosen for a job. A selection panel of staff members judges each exam. Panel members sometimes allow nationality or party to influence their judgment. According to Peter Price, a British Conservative who chairs the budgetary-control committee, it is the exception rather than the rule for a panel member to favour an individual, "but there are too many cases of that happening."
Last year an exam was held to recruit ten administrators. The selection panel interviewed candidates and it emerged that, since four candidates had finished tenth-equal, the final list would carry 13 names. One of those who scraped on to the list was a close friend of an official on the selection panel. Some panel members were uneasy about the large gap between the written and the oral marks of certain candidates, and questioned the results in a minority report. Senior officials now have a tacit understanding that only those who finished in the first nine places will be considered for jobs.
Many parliamentary officials are trying to improve management. The directorate for personnel and finance is working on both staff mobility and respect for financial rules: Mr O'Hannrachain now vetoes an item of spending about ten times a year, compared with 30 times a few years ago. But there is a lot more to be done.
The root of much that is wrong with the parliament lies in the lax way it sets its own budget. In theory the Council of Ministers has to approve the budget every year. But under a "gentlemen's agreement" between the parliament and the council, neither asks the other any questions about its budget. The parliament can spend as much as it likes so long as it keeps within the generous five-year budget ceilings agreed upon in 1988.
Every year the secretary--general proposes a draft budget and the Bureau, which likes to be generous to members and staff, tries to increase it. The budget committee tries to trim it back, but the end result -- voted on by a full session of parliament -- is always larger than the first draft.
The secretary--general's proposal for 1992 works out at about 580m ecus, compared with 510m this year. That jump reflects Euro-MPs' demands for better perks. They each already get 2,500 ecus a year to spend on air tickets to wherever they like (travel on parliamentary business is paid for anyway), but they want 4,000 ecus. They want free lessons in data processing for their assistants - of whom there are 1,200 on the parliament's payrolls. And they insist on a pension scheme that will cost 6m ecus.
About half of next year's extra spending will be on property. On behalf of the parliament, private developers are building 360,000 square metres (3.9m square feet) of office space in Brussels, including a chamber for the assembly. To pacify the pro--Strasbourg lobby, the parliament is also building a new chamber and 1,825 offices in Strasbourg. EC governments have not been consulted on these decisions.
What is to be done?
Euro--MPs should take more interest in the parliament's administration and less in their own cosiness. Why, for instance, can they not use taxis in Strasbourg and Brussels instead of the special chauffeur service that costs the parliament more than 2m ecus a year? The political groups should pledge not to interfere in senior appointments. Personnel policy should oblige officials to move around every few years, and right rules should be drawn up for selection panels.

The parliament and the council should tear up their "gentlemen's agreement" on spending, which is more of a rogues' charter. Above all, France and Luxembourg should allow the parliament to settle in Brussels. Only then might the parliament begin to convince the world that it is a responsible body, worthy of its claims for more power.
THE ECONOMIST APRIL 13TH 1991

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