MEP fat cattery

http://www.moneyweek.com/news-and-charts/the-brussels-bubble-42407.aspx

The Brussels bubble: how long can the junkets last?
By Associate Editor David Stevenson Feb 27, 2009
The European Parliament has so far escaped the recession. But as a damning report reveals shocking levels of self-enrichment, for how much longer can it do so? David Stevenson reports.

What's been going on?

Former management consultant David Craig and Matthew Elliott of British campaign group The Taxpayers' Alliance (TPA) have opened up a Pandora's box of lavish MEP perks, with their new book The Great European Rip-Off. "The EU project and institutions have been hijacked by an arrogant, self-serving and undemocratic elite, which has become increasingly isolated from and disdainful of the people who pay their considerable salaries, expenses and pensions – us," says Craig in The Sunday Times. "Among the things that shocked me were the arrogance, cynicism and avarice of MEPs, commissioners and EU staff, and the extraordinary levels of thieving. Brussels is a bubble that's escaped the recession."

How big are the numbers?

A British MEP receives basic pay of £63,291, the same as a British MP. But after this June's European Parliament elections, MEPs from all countries will be paid the same - €91,980. At current exchange rates, that would see a British MEP's salary rise to more than £81,000. MEPs also enjoy free accident, travel and life insurance, as well as widespread medical benefits. But the real kicker – and the area most ripe for abuse – is in allowable expenses. Over the course of a year, these include a subsistence allowance of £51,000, staff allowances of £182,000, office expenses of £44,000 and travel expenses of £11,000. That lot accounts for €200m of the €1.45bn total annual cost of the EU parliament.

So the living is easy for MEPs?

It certainly seems so. Thanks to "lax financial checks", says the Daily Mail, "grasping MEPs can become millionaires [pdf] through dodgy expense claims". "So generous is the staff allowance," says Craig, "an MEP can slip his or her spouse or offspring £50,000 to £60,000 a year and still employ more than one full-time secretary and a few researchers." And although allocated two fully furnished, rent-free offices in the European parliament building, "many MEPs claim for a constituency office in their own homes, while some take the cash without having a constituency office at all". No receipts are required. That's also true of the £257 a day tax-free subsistence allowance, which MEPs can claim by simply turning up and signing in to the European Parliament in the morning before leaving again – no attendance at actual sessions is required. Chuck in handsome travel expenses and one of the best pension schemes in Europe and the package is worth more than £400,000 a year. At current exchange rates the five-year total profit – even after deducting expenses such as 'genuine full-time assistants', and assuming salaries are spent on living costs – comes to £1,176,800, says The Times's Jonathan Oliver.

Is this all legal?

The rules governing the use of expenses and the need for receipts are certainly lax, but it seems that some MEPs have stretched them to breaking point. The TPA has also published a confidential 92-page study, written by the head of internal audit for the EU parliament, Robert Galvin, in 2006. He details "corruption, dodgy dealing and poor financial controls". Some assistants were paid bonuses of over 1.5 times their annual salaries. Payments were made to others for whom no records existed, or to 'front' companies. One MEP paid the entire staff allowance to a person suspected of being a relative, while other payments were made to the coffers of national political parties. Overpayments of allowances were also common, says Galvin. Overall, such abuses exposed the parliament to "financial, legal and reputational risk". "Taxpayers deserve to know if anyone is stealing from them," concludes Elliott. "There must now be a proper police investigation."

Why has all this taken so long to emerge?

Galvin's analysis was initially "kept secret", says The Daily Telegraph's Andrew Porter. It first came to light a year ago when Lib Dem MEP Chris Davies disclosed some of its findings after refusing to sign a confidentiality agreement, but it's only now that the full report has been published. Many MEPs aren't on the make, says Davies, but honesty just doesn't pay. "We need absolute transparency. No one knows who's cheating and who's not, and it's a disgrace the parliament has voted to keep auditors' reports secret. I don't want the cheats to get away with it." Given that Galvin examined just 167 payments out of a total of 4,686 in October 2004, it's likely that many more abuses of the system by some of the 785 members of the 27-nation parliament remain uncovered.

How can the junkets be stopped?

This June's European elections will see "a complete overhaul of the system", says the EU parliament. MEPs' flat-rate travel allowances will be replaced by reimbursement of expenses incurred, and they won't be able to hire close family members as assistants. But any employed before July 2008 may remain on the EU payroll until the 2014 European parliament elections. And payments for subsistence and constituency offices of up to £94,000 annually will continue, with no requirement to prove where the cash goes. So MEPs can still make thousands a year tax-free. Davies thinks the reforms don't go far enough: "if five steps are needed, the parliament always seems to take only two. We're now better than the Italian system but a long way short of the standards of the House of Commons". Not that London is squeaky clean. As Galvin concludes: "the world's political class is increasingly contemptuous of the rules".

http://www.youtube.com/watch?v=5T7GXrDCJMI
Tom Wise boasting about his cushy life as MEP to impress a "posh Teddington bird".