OLAF chief faces MEPs’ backlash in Dalligate hearing today

The head of the European Union's anti-fraud agency OLAF will today face a grilling from MEPs of the budgetary control committee, over the way he led an investigation into an alleged €60 million bribe attempt, that caused the forced resignation of European Commissioner John Dalli.

Italian Giovanni Kessler will face the harshest of criticism over his alleged personal interest in an investigation which by his own admission found no direct evidence of Dalli's involvement in the bribe attempt.

A canvasser of Dalli, Silvio Zammit, is being charged with trading in influence for asking €60 million from Swedish snus producers Swedish Match, to lift an EU ban on the retail of the chewing tobacco.

In a dossier presented by the European People's Party chief rapporteur on OLAF, Kessler and OLAF will be accused by Inge Graessle MEP of having attempted to suborn witnesses in keeping up the pretence that Dalli was present at a meeting where a cash offer might have been - which never happened; and of using the secretary-general of the European Smokeless Tobacco Council to call Zammit in an attempt at substantiating their accusation.

Graessle will say the recording of this private telephone conversation, carried out by ESTOC in the presence of OLAF investigators, amounted to illegal telephone interception.

"Telephone interception is strictly regulated in many countries in order to safeguard the right to privacy... Apart from the fact that OLAF is neither a court nor a police authority, it is quite obvious that OLAF was given no authorisation to operate in this way."

Graessle will also accuse OLAF officials of having impersonated a Spanish civil servant - revealed in the criminal proceedings against Zammit by witness Gayle Kimberley - in what she terms was "an act of deception".

OLAF officials impersonating a Spanish civil servant had called Kimberley, before intercepting her in a Portuguese hotel lobby while she was on official business, to enquire about her whereabouts. The OLAF official allegedly said the Spanish government wanted to invite the gaming authority's lottery to address a conference on gaming.

"The offence was committed in that the OLAF staff member acted without the necessary authority, conferred in this instance by the Spanish state, claimed to discharge a public office (that of a civil servant) and performed an act reserved to the holder of that office. The definition of the offence requires guilty intent... that person knew they had no capacity to take on the office concerned and carry out the actions they carried out," Graessle says in her report.

She will also accuse Giovanni Kessler of obtaining telephone records without any legal basis, carrying out a spot-check in Malta that was outside OLAF's legal remit, and breaching confidentiality.

"Kessler, having himself taken part in the investigation [meant] that he had access to information which by its very nature, was confidential, and he therefore contributed to the investigation by playing an active role in it," Graessle says, referring to the OLAF director's press conference on 17 October - the day following Dalli's resignation - in which he suggested that Dalli was guilty of trading in influence.

"He should therefore have refrained from making any comment. And what are we to make of his occasionally mocking tone of voice?"

Graessle yesterday called for the suspension of Kessler and demanded that OLAF get a "fresh start" with a new director at the helm.

Figures provided by OLAF itself show that in 2012, the anti-fraud office spent a disproportionate part of its manpower on the Dalli case. While 365 out of a total of 465 investigations OLAF led last year did not produce a result, almost 8% of the total number of interviews OLAF investigators conducted with suspects in all of 2012 were made in connection with the Dalli case (five out of 66). Similarly, six of the total 108 witness interviews conducted by OLAF investigators the same year were in connection with the Dalli case. Graessle said these figures suggested a gross misallocation of resources.