Exeter profited from link

The THES examines fallout from the report that led EU commissioners to quit

Sir Geoffrey Holland, vice-chancellor of Exeter University, acted as a Pounds 2,000-a-day consultant to the agency at the centre of corruption allegations that have contributed to the downfall of European commissioner Edith Cresson and her boss, Jacques Santer.

The contract between Agenor, the company that ran Leonardo (see right) for the commission, and Exeter is criticised by the independent committee of experts, set up to examine the activities of the commission and its divisions, for not having been formally authorised by the commission.

Sir Geoffrey, a former senior civil servant at the then Department for Education and an architect of Britain's youth training scheme, was contracted to Agenor to chair a group of experts that would advise on the programme's policy and development. Additionally, Leonardo's technical assistance office asked for two Exeter staff to contribute expertise and networking know-how.

Exeter was chosen because of its wide links with other European universities, and there is no suggestion either that Sir Geoffrey charged more than the rate for the task, or that he was personally paid the fee, which went to the university, or ever acted improperly at any time.

A university statement issued on the day after the commissioners resigned said: "The university charged on the same basis as it does for all external consultancy work, ie salary plus overheads."

It confirmed that Sir Geoffrey devoted eight days to the project in 1995-96, six and a half days in 1996-97 and five days in 1997-98. The university was paid Pounds 40,000 in the first year (Pounds 15,000 for Sir Geoffrey at Pounds 1,875 a day and Pounds 19,500 for the support staff with office costs of Pounds 5,500); in 1996-97 it received Pounds 33,300 paid in the same proportions. In 1997-98, Pounds 7,526 of an advance payment of Pounds 16,901 was repaid after a review of university spending by Sir Geoffrey.

The statement concluded: "The university has done exactly what it was commissioned to do at the price that was agreed. The university's charges were agreed in advance by the Technical Assistance Bureau (sic) and calculated on the same basis as the charging out of any other staff of the university for any purposeI "The university and the vice-chancellor consider they have acted entirely properly in all their dealings in relation to the Leonardo programme and the bureau."

The university was not prepared to comment further on any specific allegations except to say that it had heard of an allegation that the technical assistance office had billed the commission twice for the same work and added: "The university has no evidence of this, but would wish to make it clear that there is no allegation that it billed the bureau twice for the same work."

Concerns about the Exeter payments first surfaced in an internal audit by DG XXII into Agenor's first year of operation, after it won the contract to provide technical assistance for Leonardo.

This and other allegations (see box right) were not investigated further, the independent experts reported, but a subsequent brief audit in July 1997 found evidence of "overstated fees and daily payments for consultancy services from Exeter University".

Even after DG XX (financial control) became involved, it was four months before DG XX submitted its report on apparent fraud and nepotism at Agenor, despite the number and nature of the allegations. Nevertheless it proposed that DG XXII should "seriously reconsider" continuing Agenor's contract, which was initially for five years from June 1995 to May 2000, renewable annually.

In the event, the process became bogged down in discussions between the directorates, and it was not until Paul van Buitenen, the suspended commission official, finally blew the whistle and passed most of the findings to the chair of the Green group in the European Parliament that the process was speeded up. On February 11, the commission retrospectively terminated the contract with effect from January 31.

A Brussels court ruling three weeks ago found that the contract between Agenor and the commission had expired at the end of January, rejecting Agenor's claim that the contract be upheld. The commission has told Agenor to hand over any relevant documents, and DG XXII is to take over the running of Leonardo.

Agenor is a French company with a multi-EU shareholder base. Its controlling share is held by the French-based Centre d'Etudes Superieures. Big French firms on its management board include Renault and Rhone-Poulenc. The public prosecutor in Brussels is considering criminal proceedings against Agenor over four alleged fraud offences.

The committee of experts drew attention to how the European Parliament had to decide on the shape of Leonardo's second phase without vital information on how the scheme was being run.

Mr Santer, the president of the commission, is accused in the report of being evasive to the point of misleading Sue Waddington, the rapporteur on Leonardo, when asked pertinent questions.

Euro-sceptic view, page 16