Dalligate | OLAF supervisors given redacted investigation report day after resignation

Shortened version of Dalli investigation handed to supervisory committee before full investigation was transmitted to Attorney General.

The OLAF supervisory committee, with Johan Denolf (first from right).
The OLAF supervisory committee, with Johan Denolf (first from right).

The EU's anti-fraud office OLAF, whose investigation into former commissioner John Dalli uncovered "circumstantial evidence" that he was aware of a bribery attempt by a former canvasser of his to influence tobacco legislation, has told MaltaToday it gave a "redacted version" of its investigation report to the supervisory committee on 17 October - two days before its transmission to the Maltese attorney general.

OLAF came under criticism of some MEPs who questioned the unit's decision not to forward its investigation to the supervisory committee, a five-man group of experts that vets the way investigations are carried out, before handing over the report to the Maltese judicial authorities.

The anti-fraud office has told this newspaper there is "no specific deadline" for any OLAF investigation to be passed on to the supervisory committee, and that no such obligation is imposed by the seminal Franchet & Byk case. In that judgement, the European Court of Judgement 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.

An OLAF spokesperson yesterday told MaltaToday that in its current working arrangements the anti-fraud office agreed to provide the shortened and 'anonymised' [sic] version of the final report five working days before sending it to the judicial authorities.

"In the Dalli case, due to its importance and sensitivity, it was considered inappropriate to follow the general procedures and delay the transmission of the Final Report to the judicial authorities for five days. Therefore, the President of the Supervisory Committee was informed on Tuesday 16 October of OLAF's intention to transmit the final report to the Maltese judicial authorities within a shortened timeframe."

OLAF insisted there is no requirement under the Franchet & Byk decision to delay the transmission to the national authorities pending an opinion from the supervisory committee.

Supervisory committee chairman Johan Denolf yesterday told MEPs from the Budgetary Control committee of the European Parliament that he is compiling a report on whether OLAF's regulations were followed during the Dalli investigation.

Former chairman Christian Timmermans also assured MEPs his resignation had nothing to do with the Dalli investigation, while Rita Schembri, a member of the committee and the director general of Malta's Afcos, the anti-fraud coordination unit to OLAF, told MEPs her role in the Dalli investigation was minimal and procedural and that she withdrew from the committee's supervision of the case after Dalli's resignation.

The new information is a slight improvement on what has been reported so far: MEPs who meet OLAF director Giovanni Kessler were told that the full investigation was handed to on 23 October 2012 - after having being first handed to the Maltese attorney general on 19 October. No mention was made of a redacted version being given to the supervisory committee the day after Dalli's resignation was announced by the European Commission.

Then on Monday 22 October came news of the resignation of the supervisory committee chairman Christiaan Timmermans's resignation, ostensibly on personal grounds, to stay on as member while Johan Denolf takes the helm of the committee.

On 25 October, Denolf said the supervisory committee was "formally informed... of the existence of the Dalli case" by Kessler on 17 October and that the OLAF director intended to transfer it to the Attorney General: a statement that did not explain whether the committee had the investigation in hand at the time. It now turns out, OLAF claims, that it had a redacted version of the investigation.

While the law regulating the anti-fraud office says OLAF must forward its reports to the supervisory committee before they are sent to national judicial authorities, OLAF insists 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 Maltese Internal Audit and Investigations Department (IAID) assisted OLAF in a part of the investigation that was conducted in Malta, as required by the Administrative Cooperation Arrangement between the IAID and OLAF.

IAID director Rita Schembri, who is a member of the OLAF supervisory committee and was aware of the investigation as early as 4 July 2012, withdrew from any of the work of the committee which might refer to the Dalli case in order to avoid any potential conflict of interest.

On his part, John Dalli has raised his own 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.

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.

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