Dear Mr M.,
On 28 June 1999, you made a complaint on behalf of the company G. to the European Ombudsman concerning actions taken by the European Commission and the Committee of Independent Experts, which have caused damage to the reputation of G.
On 29 July 1999, I forwarded the complaint to the Acting President of the European Commission. The Commission sent its opinion on 27 October 1999. I forwarded it to you with an invitation to make observations, which you sent on 22 December 1999.
I am writing now to let you know the result of the inquiries that have been made.

THE COMPLAINT

Background information
In August 1997, allegations of corruption against a former managing director of one of the company G.'s Belgian subsidiaries and a Commission official in the awarding and supervision in relation to a guarding contract, appeared in a Belgian newspaper. The allegations were that the guarding contract had been manipulated in favour of G., that a supplementary agreement with incorrect prices and other regulations to compensate the company for making a reduced offer had been amended, and finally that a number of fictive employees had been registered.
UCLAF (now OLAF) and DG XX of the Commission were instructed to carry out investigations inside and outside the Commission and presented their report on 12 March 1998. Their conclusions were, that there was clear and concordant evidence that the tender procedure had been manipulated in favour of G.. In April 1998, a Belgian Public Prosecutor was asked to initiate a judicial investigation. G. also initiated an investigation managed by a separate company. The report (the Farleigh report) was presented to UCLAF in September 1998 and a copy sent to the Public Prosecutor.
On 6 January 1999, the Commission made a press release presenting both the background and developments of the case. The information was based on data which the Commission held including the UCLAF findings. It is against this background that the complaint was lodged.
The complaint
As regards the allegations against G. concerning the guarding contract that the Commission awarded to it in 1992, the complainant, the General Counsel on behalf of G., stated that UCLAF's work in relation to the guarding contract had been manipulated and leaked in order to protect colleagues within the Commission. The complainant reported this to commissioner GRADIN's cabinet in March 1998, but according to the complainant no specific action was taken to restore any significant measure of integrity to UCLAF's work on the file. Further, the press release of 6 January 1999 from the President of the Commission, stating that there was "clear and concordant evidence that the processing of tenders was manipulated in favour of G." and that the subsidiary derived excessive profits from a supplementary agreement, was defamatory, misleading and highly damaging to the company's commercial interests.
The matter was also included in the First Report on Allegations regarding Fraud, Mismanagement and Nepotism in the European Commission, produced by the Committee of Independent Experts on 15 March 1999 and available on the internet. The Report contained claims that are categorically untrue which were made on the basis of testimony given by UCLAF officials. These statements were equally damaging to the company's commercial interests. The complainant wrote to the Committee of Independent Experts on two occasions to correct the information but it appears that it did not receive a reply.
The complainant requested an apology from the Commission and a public correction of the false statements.
The complainant wrote to the Commission on two occasions, 1 February and 22 June 1999 respectively, to clear up the matter, but claimed to have received no reply from the Commission.
In addition, the complainant informed the Ombudsman that the case was being examined by a Belgian Public Prosecutor.

THE INQUIRY

As the case was currently being investigated by a Belgian Public Prosecutor, the Ombudsman did not find it justified to inquire into that part of the complaint. However, he did ask the Commission to inform him of the scope of that investigation. Further, the Ombudsman asked the Commission to supply information as regards the legal base and status of the Committee of Independent Experts. The Ombudsman also pointed out the lack of reply by the Commission to the complainant's letters of February and June 1999.
The Commission's opinion
In its opinion, the Commission explained that the investigation performed by the Belgian Public Prosecutor covered UCLAF's report of 12 March 1998, which had been sent to the Public Prosecutor. The referral covered all UCLAF's findings including the question of the use of staff recruited on the basis of a contract concluded with G.. In agreement with G., the report of 18 September 1998 commissioned upon G.'s initiative, the Farleigh Report, was also forwarded to the Public Prosecutor by the Commission. The Commission took the view that the Ombudsman should not inquire into this part of the complaint, but that is up to the Belgian courts to rule on the matter.
The Commission's standpoint was that the Commission's action vis-à-vis the press and, the alleged failure to reply to the complainant's letters were not covered by the investigation of the Belgian Public Prosecutor.
In relation to the press release of January 1999, the Commission stated that a distinction should be made between safeguarding the confidentiality of investigations (the responsibility of the Public Prosecutor) and UCLAF's obligations (confidentiality required for needs of the inquiry) or those of the Commission (transparency as an institution and, in addition to these obligations, the rights of the Commission as the aggrieved party). The Commission took the view that the statements in the press release complied with these principles. The statement contained only factual information; no specific statements were made on the judicial inquiry or its progress and a simple summary of the main findings of UCLAF, not at odds with the report commissioned by G. - the Farleigh report - was included. The Commission stated that the press release was prepared to contain objective and harmless information, also in accordance with the rights of defence, and that it could not be held responsible for the way in which the information was used by the press.
As regards the failure to reply to the letters sent by the complainant, the Commission recognised that the letter of 1 February 1999 was not given an official reply. Given the content of the letter, the Commission found that a reply would expose it to potential litigation. However, the letter of 22 June 1999, which referred not only to elements contained in the first letter but also to the report of the Committee of Independent Experts, was in fact replied to by letter of 12 July 1999. This letter also referred to the first letter of the complainant and could therefore also be considered as an acknowledgement of receipt for both letters. Finally the Commission stated that its duty to reply to all correspondence should also be seen in the light of its obligations with regard to protection of the Community's financial interests.
Concerning the Committee of Independent Experts, the Commission stated that it would be inappropriate to comment on the conclusions of the Committee, because its conclusions come under the Committee's own responsibility. However, the Commission invited the Ombudsman to contact the Committee of Independent Experts directly.
In relation to this aspect of the case, the Commission explained that the Committee was set up following the European Parliament's resolution of 14 January 1999(1) on improving the financial management of the Commission. According to this resolution, the Committee has the competence to examine the way in which the Commission detects and deals with fraud, mismanagement and nepotism, including a fundamental review of Commission practices in awarding financial contracts. The terms of reference of the Committee are laid down in the note of 27 January 1999(2) by the Conference of Presidents. This note specifies that the Committee must present its conclusions in two reports, which are to be delivered to the Conference of Presidents and then made public.
The Committee was given unrestricted access to all documents they may request, including UCLAF proceedings. Further, they are free to interview members of the Commission, officials or other agents, who are not obligated to respect the rules of confidentiality and discretion. The Committee deals with the information under conditions of strict confidentiality.
In its opinion, the Commission also sent information of a confidential nature, for the information of the Ombudsman only. The Ombudsman would like to underline that he cannot take a stand based on information, which the complainant has not been given the possibility to comment on. This would be in breach of the principle of the rights of defence and the right to be heard and consequently, this information will have no bearing in this case and will not be taken into account by the Ombudsman in deciding on this complaint.
The complainant's observations
In its observations, the complainant maintained its complaint. The company stated that it was never submitted a copy of the UCLAF report or informed of its findings. The complainant alleged that the company only received a letter in October 1998 confirming UCLAF's agreement with the results of the Farleigh report. However, according to the complainant, it must be clear that the two reports are at odds with each other, but it agreed with the Commission that it is now for the Belgian Public Prosecutor to decide on that matter.
The complainant put forward that the complaint rather concerned the Commission's disrespect of basic principles. Taking into account the ongoing judicial inquiry and the contradictory findings by UCLAF and the Farleigh reports, the Commission's press release of 6 January 1999 was against basic principles of proper administration and prejudicial to the complainant's interest in the case and extremely damaging to the reputation and commercial position of the company.

THE DECISION

1 The scope of the Ombudsman's inquiry
1.1 Since the complainant informed the Ombudsman that the matter was the subject of an investigation managed by a Belgian Public Prosecutor, the Ombudsman asked the Commission to inform him of the scope of that investigation.
1.2 According to the Commission, the scope of the investigation performed by the Public Prosecutor covered UCLAF's report of 12 March 1998. The referral covered all UCLAF's findings including the question of the use of staff recruited on the basis of a contract concluded with the complainant.
1.3 It is established practise that, if another competent body is examining the matter within its authority, there are no grounds for the Ombudsman to inquire into the same issue. The investigation performed by the Public Prosecutor appears to relate to the guarding contract that the Commission awarded to the complainant in 1992. The complainant thereby alleged that the Commission and UCLAF made false allegations of corruption against it, and that this was damaging to the company. It is therefore not justified for the Ombudsman to investigate into that part of the complaint.
2 The Commission's statements
2.1 The complainant referred to certain statements in the Commission's press release of 6 January 1999, and claimed that these were defamatory, misleading and highly damaging to the company's commercial interests. Moreover, it claimed an apology from the Commission and a public correction of false statements.
2.2 The Commission took the view that the statements contained only factual information; no specific statements were made on the judicial inquiry or its progress and a simple summary of the main findings of UCLAF, not at odds with the report commissioned by G. - the Farleigh report -, was included.
2.3 The Ombudsman considers that as regards the issues in dispute between the Commission and the complainant, these are covered by the investigation performed by the Public Prosecutor. Only the investigation performed by the Public Prosecutor will bring the issues to an conclusion and it is the Ombudsman's view that it is not possible to make a final judgement on statements made by the Commission in this context. Moreover, the complainant's claims and arguments can be properly addressed by the investigation performed by the Public Prosecutor. It shall also be noted that the press release is explaining the findings of UCLAF's report as far as the Commission's own activities are concerned and, that the complainant is mentioned in that connection and further, the Commission's intention does not seem to have been to harm the complainant. Therefore, the Ombudsman finds that there is no instance of maladministration in relation to this aspect of the case.
3 The Commission's failure to reply
3.1 The complainant put forward that the letters to the Commission dated 1 February and 22 June 1999 respectively, were not replied to.
3.2 The Commission recognised that the letter of 1 February 1999 was not given an official reply. However, the Commission did reply to the letter of 22 June 1999 by letter of 12 July 1999. As this letter also referred to the first letter of the complainant, it could be considered an acknowledgement of receipt for both letters.
3.3 It is good administrative behaviour to respond to letters from citizens within a reasonable period of time. In the present case, the Commission did not immediately reply to the complainant's letter of 1 February 1999. However, on 12 July 1999, the Commission replied to the letter of 22 June 1999 and in doing so, it also acknowledged receipt of the letter of 1 February 1999. The Ombudsman will therefore not inquire further into this part of the complaint.
4 The Committee on Independent Experts
4.1 As the complainant's complaint also related to the Committee of Independent Experts, the Ombudsman asked the Commission to supply information as regards the legal base and status of the Committee.
4.2 The Commission stated that it would not be appropriate for it to comment on the conclusions of the Committee but invited the Ombudsman to contact the Committee of Independent Experts. The Commission also supplied information as to the status of the Committee.
4.3 The Committee of Independent Experts was set up by the European Parliament's resolution of 14 April 1999 on improving the financial management of the Commission(3). According to the resolution, the Committee was to be convened with a mandate to examine the way in which the Commission detects and deals with fraud, mismanagement and nepotism, including a fundamental review of Commission practices in the awarding of all financial contracts, and to report on their assessment. The Committee's terms of reference are laid down in the note of 27 January 1999 by the Conference of Presidents(4).
4.4 In the Committee's first report on Allegations regarding Fraud, Mismanagement and Nepotism in the European Commission of 15 March 1999, the Committee comments on its status stating the following:

1.2.2. The Committee is not constituted under the Treaties or any other regulation governing the European institutions and is thus neither a Community institution nor a Community agency. It is certainly not a Community court and has no formal investigative power. Further, its authority is vested in it by virtue solely of an agreement between the Commission and Parliament that (i) all relevant documentation the Committee wished to look at would be made available and (ii) that the staff of the institutions would be exempted from all secrecy obligations imposed on them by Staff Regulations.

1.2.3. The Committee therefore regards itself as a temporary advisory committee operating by consent and drawing its authority from the resolution of Parliament and the commitment of both Parliament and the Commission to support its work and to recognise its findings.

1.2.4. The Committee therefore seeks neither to 'judge' in the judicial sense of the word nor to give 'instructions', but rather to offer a (legally or politically) non-binding evaluation of the Commission's, and Commissioners', conduct in the cases under consideration.

1.2.5. Throughout its mandate the Committee has been completely independent. Though established 'under the auspices' of the European Parliament and the Commission, it was guided by the principle of impartiality vis-à-vis these two institutions and sees itself as answerable only for the exercise of its mandate and accountable to no party other than the general public.

1.2.6. In practical terms, the Committee applied conditions of confidentiality to its work in order to avoid any interference from outside.

4.5 The Ombudsman notes that the object of the inquiry is the Commission. In the light of the above-mentioned facts, the Ombudsman finds, that the Committee of Independent Experts cannot be regarded as a body under the responsibility of the Commission. Therefore, the Ombudsman finds that there is no instance of maladministration in relation to this aspect of the case.
5 Conclusion
On the basis of the Ombudsman's inquiries into this complaint, there appears to have been no maladministration by the Commission. The Ombudsman therefore closes the case.
The President of the European Commission will also be informed of this decision.
Yours sincerely
Jacob SÖDERMAN

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(1) OJ 1999 C 104/106

(2) PE 276.526/BUR/Ann./fin. See under point 6 et seq.

(3) Decision of the European Parliament of 14 April 1999, OJ 1999 C 104/106.

(4) PE 276.526/BUR/Ann./fin.