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Casa, Muscat and Grech vote to keep extra EUR1,000 a week on flights to Brussels
Matthew Vella
The Brussels gravy train was kept trucking on earlier this week when the European Parliament’s 732 MEPs failed to endorse a series of amendments on public control and scrutiny of their generous allowances, including plans for a random audit of their general expenditure allowances and their pension premiums.
The report by Liberal MEP Ona Jukneviciene, granting the discharge for the European Parliament’s 2003 budget, was adopted by a clear majority, with 551 votes in favour and 81 against.
Malta’s MEPs voted in favour of the report but a series of amendments to reform the system of perks and privileges for MEPs drew clear distinctions between Malta’s representatives.
Liberal MEP Chris Davies, a member of the Budgetary Control committee which presented the report, accused MEPs of endorsing embezzlement.
On Tuesday MEPs voted against proposals to replace the generous system of travel expenses with a system that reimburses their actual travel costs. Maltese MEPs are estimated to earn an extra EUR1,000 (Lm429) a week just for the distance covered between Malta and Brussels, apart form the reimbursement of their plane ticket and taxi fares.
However, only Socialist MEP John Attard-Montalto voted in favour of limiting the payment of travel allowances to the value of expenses incurred. His colleagues Joseph Muscat and Louis Grech, as well as EPP-ED member David Casa, voted against – and formed part of the 345 MEPs, mainly from the Socialist and Christian-Democrats which rejected the proposal.
Simon Busuttil, who last week told MaltaToday he was not an advocate of the current system of allowances and that he had joined other MEPs in calling for its reform to improve transparency, abstained from the vote – one of the only three EPP members who abstained.
Indeed Busuttil and Casa’s voting patterns this Tuesday failed to live up to claims of their advocacy for reform in last Sunday’s MaltaToday, where they said that reports on their potential Lm40,000 in yearly allowances had attacked their integrity by suggesting they claimed allowances for doing nothing.
Both MEPs said they were calling for reforms to improve the transparency of the perks and privileges at the European Parliament. However on Tuesday, the two MEPs abstained from voting on an amendment that called for naming-and-shaming MEPs who were found not to be adhering to the rules relating to the use of parliamentary allowances.
The proposal was again rejected mainly by Socialists and Christian-Democrats. Only seven Christian-Democrats abstained.
Attard-Montalto, Louis Grech, and Joseph Muscat voted in favour.
Ona Jukneviciene, the Lithuanian Liberal MEP who drafted the report, said MEPs had failed to address the persistent criticism surrounding parliamentary allowances.
“For too long the lack of transparency and accountability has been allowed to poison the atmosphere in Parliament, creating hostility between MEPs and fuelling criticism and cynicism in the media. This was a missed opportunity to reform our system of parliamentary allowances and hold ourselves fully accountable as elected representatives.”
One of the more contentious votes centred on the lucrative MEPs’ voluntary pension. All five Maltese MEPs are signed up to the Euoprean Parliament’s voluntary pension scheme.
MEPs have to pay one-third of the premium, EUR987 (Lm423), whilst the European Parliament pays the rest. In reality, it means MEPs are receiving two pensions for one job, paid mainly by the European taxpayer. Some 485 MEPs are signed up to the pension, including those who are critical of the system – nobody looks a gift horse in the mouth.
The scheme has one added benefit for MEPs. For ‘administrative concerns’, the premium is paid directly from their monthly EUR3,785 (Lm1,624) general expenditure allowance.
MEPs are supposed to compensate for this by making a personal payment into the office account. However, despite a Court of Auditors ruling in 1998, MEPs are not required to keep receipts of their expenditure or to have their accounts audited.
Both Busuttil and Casa however abstained from voting, unlike the outright majority of the EPP bloc, on an amendment for an audit statement to verify whether MEPs are reimbursing their general expenditure accounts. Only Muscat and Grech voted in favour.
Attard-Montalto voted against the amendment. Attard-Montalto had said he wrote to the European Parliament to ask that his premium be paid directly from his personal account, although the EP refused to depart from tradition.
So what happens if no payments are made into the office account? According to Liberal MEP Chris Davies, there is no proof that MEPs are not backing up their premiums by paying back them back into their office account, “but rumours are rife that it is not uncommon. With no procedure for auditing accounts every MEP can be caught up in a cloud of suspicion.”
Along with other Liberals and Green MEPs, Davies had tabled a motion in the Budgetary Control committee in March to allow random audits of MEPs’ accounts and suspend those who broke the rules, but was defeated by 23 votes to seven. MEP Simon Busuttil is a member of the committee.
Depending on the length of service, retired MEPs will receive a minimum of EUR700 (Lm302) a month to a maximum of EUR5,000 (Lm2,157).
Not a real pension
The MEPs’ pension scheme was set up in 1991 after the EP decided that MEPs could enter a secondary voluntary pension scheme on an individual basis. A non-profit association was set in Luxembourg to act as the holding company for the MEPs’ pensions.
Green MEP Paul van Buitenen is however critical of the set-up. A former auditor at the European Commission, van Buitenen blew the whistle in 1998 on fraud and mismanagement in Jacques Santer’s Commission, triggering its collapse. Following disciplinary action, he entered politics and was elected to the EP, joining the European greens.
Today, van Buitenen says it is unacceptable that European taxpayers are paying for the deficit bill in the MEPs’ pensions fund, and wants a new pension scheme to be set up so deficits will not have to covered by the EP budget.
“The financial risks of this pension is that it is not a ‘real’ pension fund, but a non-profit association which needs a long-term return on investments to be able to pay out pensions. In fact, it is an investment ‘club’ which depends on the fluctuations of the investment markets with all risks involved,” the MEP told MaltaToday, warning that it is the European taxpayer which is making good for the deficits in MEPs’ pension funds.
In fact, potential deficits in the fund are paid for from the European Parliament’s budget, because the EP pays two-thirds of MEPs’ contributions to the pension fund.
“This is contrary to a normal investment fund where the risks or benefits are spread among and between the participants,” van Buitenen comments.
Being an association and not an ASSEP – ‘association d’epargne-pension’, the legal status for pension funds in Luxembourg – the normal legal obligations in most Member States to have coverage of over 100 per cent for pension funds does not apply in this case, because it is not a pension fund. It is an investment fund with all risks included.
So where have MEPs taken their ‘investment club’?
The latest figures show that from an actuarial deficit of EUR8 million (Lm3.4 million) seven years ago, the pension fund has descended into a EUR41 million hole (Lm17.6 million), with the European taxpayer picking up the bill.
As van Buitenen says, the EUR8 million deficit was repaired by the European Parliament, which consequently increased the contribution MEPs had to advance.
“Promises were made that the fund would be totally separated from the EP budget, other than the contributions by the EP directly, and responsibilities would be clear, and that this was a one and only deal to help repair the funds deficit.”
Now there is a new EUR41 million deficit in the fund, showing that the actuarial funding level was only 76 per cent. The figure is mainly due to negative investment returns in 2001 and 2002, with a slight recovery in 2003.
Van Buitenen adds that with the basic pension increasing by 2.5 per cent every year, the deficit is getting worse. The value of its investments is only EUR135 million when it needs EUR177 million to cover all pensions and costs.
Hans-Peter Martin, another whistleblower MEP who was expelled from the Socialist group for hunting down his colleagues who were not attending committee meetings and claiming their handsome attendance allowance of EUR268 (Lm115) for every meeting, has queried the European Council on the MEPs’ pension scheme.
In a parliamentary question, Martin queried the Council as to whether it considered the fund to be “keeping with the times” by allowing MEPs not to keep supporting documents to prove that office expense accounts were being topped up by MEPs after premiums are paid out of the account.
The Council said it was determined to negotiate the terms of an agreement on the regulations governing the performance of the duties of its Members.
matthew@newsworksltd.com |
