The Corruption Crisis of the European Commission

Abstract: The Corruption Scandal of the European Commission and its possible effects on the institutional balance and the question of legitimacy

I. Defining Corruption The first chapter is an attempt to define corruption. It is important to divide overlapping and complicated terms such as corruption, scandal and fraud. Corruption is defined as an illegal transaction, where both actors benefit from their special position in the market or the government. Scandal is the public reaction to allegations of corruption and thus it is interconnected with the issue of legitimacy. Fraud, however is a purely criminal cathegory.

The European Commission is a multicultural and multinational institution of the European Union so it is vital to take into account the cultural relativity of the meaning of corruption. Corruption can only be defined within a specific society and at a specific time. This culture specific aspect of corruption is reflected in the division of so called black, white and grey corruption.

Black corruption in a given society is a repremanded behaviour both by the public and by experts. It is a well defined area of the untolerated behaviour. White corruption on the other hand is the behaviour that is tolerated by the public in a given society and not looked upon as misbehaviour. Grey corruption is the area in between, which is tolerated by a part of the society, while seen as corruption by the other part. It is also important to realize the dynamics of the definition of corruption, as it changes with geography or time from black to grey to white corruption (or vica versa). Corruption scandals are often only a sign of this change in the public perception of corruption.

These cultural differences can be observed in the member states of the European Union. There is a dividing line on the imaginary corruption scale between the Northern protestant countries (Denmark being the least corrupt) and the Southern catholic countries (with Italy at the lowest end of the corruption scale).

The corruption in the Mediterranian countries can be identified along the lines of amoral familiarism, and the constant use of mediators. The cause of this southern type of corruption is the relative weakness of tthe central government and the inefficiency of the buerocracy. These madiators came to be the only effective channels between central governments and peripheries. They were the seeds of organized crime of the maffia for example, which integrated into the central government.

In the northern part of the continent there is more emphasis on the notions of incompatibility and the conflict of interest. There are problems however around the financing of political parties.

II. The Organization of the European Commission The Commission is at thte heart of the Union. It has a very important role in formulating policies, initiating legislation, overseeing implementation, make administrative decisions.

The Commission had a great impact on the poltics of the Communities from the earliest times. The ambitions of the Commission to gain more influence in European decision-making caused frequent conflict with the Council of Ministers, which saw the strengthening of the supranational Commission as a main threat to the souvereignity of the member states. This conflict was accentuated at the Luxembourg crisis in 1965, which was the greatest institutional crisis of the Community. The crisis was caused by De Gaulle`s resistance of the Commission`s proposal of introducing majority voting in the Council instead of unanimity. The French President paralysed the working of the Community by practicing the "empty chair" politics, boykotting the Council of Ministers. The crisis was solved by he Luxembourg compromise, which kept the veto of the member states.

The first sign of corruption in the Commission was the 1979 report of the Court of Auditors, which accused the commissioners of using the community funds for private purposes and scrunitized the Commission of the reckless spending of he resources.

The European Commission can be divided to a political and an administrative arm. The political arm is the College of Commissioners. The College of Commissioners is responsible to provide political leadership for the Commission. It is a collegiate body of 20 commissioners nominated by the member states. Commissioners must act independently and represent the general interest of the Community. Comissioners are usually high calibre polititians from the member states, many being prime ministers or senior ministers prior to their post on the European Commissioners. They act as an informal channel between the Community and the political elite of the member states.

The commissioners are surrounded there personal team of 6-8 senior advisors, the so called cabinets. The influence of the cabinets is a contegious issue. The directorates often see them as an obstacle of communication between the department and the commissioner. Cabinets are also accused of being of the same nationality as the commissioner.

The administrative arm of the Commission consists of the permanent and the temporary staff. The permanent staff is about 15,000 people in size. They are nationals of the Member states who get on a closed list of appointees to the Commission through the concours. This competitive exam however is just a first step. To get appointment often depends just as much on who they know. There is another practice of filling in permanent posts, known as parachutage. There is an age limit of 32 years to get appointment in the Commission. Senior staff with temporary appointment however can get permanent posts via closed examinations. These practices can cause a lot of tension.

Within the Commission there are also informal network of natinalities, which can influence senior appointments. An anthropological research of he Commission also showed the cultural differences in identifying invalidity, alcocholism or corruption.

The Commissin is highly dependent on external expertise as well. This is provided by temporary appointments and the complicated system of committees surrounding the Commission, known as comitology. These committees are very heterogenous and contribute to the complication of decision making mechanisms.

In the case of the European Commission we can identify two "constituencies", the Member states and the citizens. This causes an internal conflict, as the two interests often do not coincide.

In the European Commission there are traits of intergovernmentalism. Both the commissioners and the staff articulates national interests at Community level. Commissioners are independent, but they are nominated by their governments and they can be re-nominated. The staff is coming from a particular administrative, political, educational background of a member state, which is by definition oriented at national interests.

III. Questions of legitimacy in the Euroean Commission One of the most important political and legal problem of the European Union is the so called democratic deficit. This symtom undermines the legitimacy of the EU. The lack of legitimacy in the EU is caused by the economic nature of the Union. Efficiency was emphasized in contrast to democracy.

The European Commission itself suffers from this lack of legitimacy. The European Commission tries to gain legitimacy by strengthening its accountability towards the European Parliament. The two institutions are the supranational bodies in the Union. However their relationship is not harmonic at all.

The relationship between the EP and the Commission is laid down in the Treaty of the European Union. It outlines a system of rather weak accountability of the Commission towards the Parliament. However, it seems that the seeds of a classical executive-assembly type relationship can be found in the treaty of Rome. (Art 189-201 EC)

There is also a network of informal cooperation between the two institutions, through different channels.

The Parliament has little role to play in the appointment of commissioners. Before the Maastricht Treaty. According to this only had the power of voting of the Commission as a body. The Amsterdam treaty gave further powers to the EP. It now has the authority to vote on the president of the Commission before the apointment of the individual commissioners.

The Commission’s problems of the lack of legitimacy also derive from its lack of transparency. Besides the complicated nature of decision making in the Commission, there is also a culture of secrecy. The importance of transparency and openness was reaffirmed.

IV. The president of the European Commission The fourth chapter deals with the role of the president in the european Commission. If we look at the different presidents of the commission we see the different approach they took.

It is possible to differentiate between proactive presidents and presidents with more cautious, technocratic approach. Proactive presidents like walter Hallstein or Jacques Delors aimed at transforming the Commission into a powerful, highly prestigious political body. They wanted to strengthen the political power of the institution and act as a real executive. This ambitious approach frustrated the Member States, and generally they appointed a weaker president to the Commission after a strong one.

Strong presidents were also very successful at providing both political and organizational leadership to the Commission. They managed that notwithstanding the fact, that their position was hardly more than first among equals and the Treaties provided no real power to the president over his commissioners.

Jacques Santer was chosen to be the president after the decade of Delors, who was said to be the most influential president of the commssion in the history of the European Union. Santer was assumed to be chosen for his relative weakness (or at least that is how he was viewed by the public) and this approach determined his period. He did not manage in providing authority and charismatic leadership to his team.

V. The corruption scandal In the absence of strong leadership mismanagment and corruption flourished within the Commission. The first allegations started in December 1998 after the report of the Court of Auditors.

One of the auditors in the commission also made a report for the Green Party which was made public. This report criticized the commissioners with incompetence and unwillingness to deal efficiently with fraud and corruption. The EP held a hearing of santer, but he refused to sack any of his commissiners. The arrogance of some commissioners, particularly that of Edith Cresson also further angered the assembly.

They held a motion of censure according to Art. 201 of the EC Treaty, which empowered the Parliament to make the commission to resign en bloc. The motion, which requieres absolute majority and 2/3 of the cast votes was unsuccessful. However in 14 January 1999 the Parliament set up a committee of independent experts to investigate the allegations of nepotism and mismanagement inside the Commission.

The First Report established the extent of the responsibility of the Commissioners as a body for such irregularities. The Committee found evidence of nepotism in thte case of Edith Cresson. They also found the Commission as a body responsible in the case of several projacts such as ECHO or TOURISM for launching programs without the necessary resources and thus creating opportunity for corruption.

After the damning report the commission resigned as a body on 16 March 1999.

The Committee made a second report in which it called for the creation of an efficient monitoring for projects. It suggested to simplify procedures. The Committee emphasised the need for new codes of conduct. It also called for the cooperation of Member States to create the legal context to fight corruption efficiently at the Union level.

VI. The commission of Romano Prodi Romano Prodi was chosen to be the president who leads out the Commission of what the media refferred to as the biggest institutional crisis of the EU.

The Treaty of Amsterdam strengthened the position of the president by giving the EP the right to vote for the president nominee in advance of appointing the whole Commission. It gives further legitimacy to the president.

The president got further authority by the right to rearrange portfolios and by having to accept the nominees of the Member States for commissioners. Santer also made all his commissioners agree that they will resign if he requests it.

VII. The consequences of the corruption crisis The consequence of the crisis is that the commission has to reform itself. It has to oblige itself to fundamental values such as transparency, openness and responsibility to regain its legitimacy and the confidence of thte public.

If the commission manages to bring about fundamental changes it has a chance to strengthen the legitimacy and the influence of the institution and create real political leadership to the EU. If it fails doing so, the institutional balance will go towards giving more power to the Council. The EU will become more intergovernmental than supranational system. This process can set back the further deepening of integration.