The European Ombudsman, P. Nikiforos Diamandouros, has called on the European Anti-Fraud Office (OLAF) to consider re-opening its inquiry, or conducting a new inquiry, into the so-called "Blue Dragon" case. According to the Ombudsman, "principles of good administration require administrative investigations by OLAF to be carried out carefully, impartially and objectively". In this case, the Ombudsman's investigation revealed a number of points that give rise to concern about the adequacy of the inquiry carried out by OLAF so far, notably concerning:

• The investigators in charge of the inquiry
• The documents at OLAF's disposal
• OLAF's decision not to carry out an inspection
• The findings of the OLAF inquiry

The Ombudsman has called on OLAF to respond to his draft recommendation by 31 May 2004. This draft recommendation can be found on his website, at the following address:

Background to the case(1)

The directors of the company Blue Dragon 2000 complained to the Ombudsman in 2002, alleging that OLAF had failed to deal properly with their allegations of fraud and that the system of distribution of LEADER II funds through private sector bodies, as well as inadequate controls by the Commission, had facilitated the fraud. The complainants claimed public exoneration, restitution of what had been stolen from them and compensation for economic and moral losses they had suffered.

Although OLAF had decided in 2001 that it would open an inquiry and carry out an inspection on the spot, it decided to suspend its inspection after it learnt that the Spanish authorities were carrying out their own inspections. Based on the findings of the Spanish authorities, OLAF issued a final report on its inquiry in 2002, stating that irregularities had been found in the Blue Dragon 2000 project. The report recommended that the case be closed with a financial follow-up in order to recover the funds allocated to the Blue Dragon 2000 project.

 

For further information, please call Ms. Elodie Belfy, tel. +32 2 284 39 01.

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(1) While this complaint is against both the Commission and OLAF, this draft recommendation is addressed only to OLAF. The Ombudsman already addressed a draft recommendation to the Commission on 26 June 2003, which the Commission accepted on 16 September 2003. The draft recommendation to the Commission is available at: