Background to the complaint

1. The complainant was the representative of a Polish company (‘the company’), that received EU funds from the European Regional Development Fund (ERDF) for a project aimed at creating a financial management website for small and medium-sized enterprises.

2. The European Anti-fraud Office (OLAF) investigated the complainant for alleged misappropriation of EU funds[1].

3. In parallel with OLAF’s investigation, the company had a legal dispute with the Polish authorities[2]. In the context of that dispute, the Polish authorities issued a decision to recover funds received by the company, which was then contested by the company before the national courts. The complainant claimed that the Polish authorities had discriminated against the company and breached the principle of fair competition. He asked OLAF to investigate the matter. The case also triggered a national criminal investigation against the complainant, which was suspended until OLAF finalised its own investigation.

4. On 28 December 2016, the complainant made a complaint to OLAF. He stated that OLAF failed to investigate and resolve the dispute between the company and the Polish authorities. He also said that, by not securing relevant information and documentation from the company’s servers located in Malta[3], and by denying him the possibility to be interviewed, OLAF failed to conduct a proper investigation.

5. In its replies of 4 and 24 January 2017, OLAF stated that the dispute between the company and the Polish authorities fell outside its remit. Regarding its own investigation, OLAF stated that it would invite the complainant to comment in due course on the facts established, and that it was for OLAF to determine which investigative measures needed to be taken and when.

6. Dissatisfied with OLAF’s responses, the complainant turned to the Ombudsman on 11 February 2017.

7. On 25 April 2017, the complainant asked OLAF for access to the file of the investigation concerning him.

8. On 2 May 2017, OLAF refused the complainant’s request.

9.  On 19 April and 24 May 2017, OLAF gave the complainant the opportunity to comment in writing on the facts established by the investigation. On 12 June 2017, the complainant replied, contesting OLAF’s findings.

10. On 7 July 2017, OLAF closed the investigation and transmitted its ‘Final Report’ to the European Commission and to the Polish prosecution authorities, together with recommendations for follow-up actions.

The inquiry

11. The Ombudsman opened an inquiry into the complainant’s concerns that OLAF failed to:

a) seek and accept evidence stored in the servers of the complainant’s company;

b) investigate how the Polish authorities gathered evidence leading to the administrative decision to recover funds from the complainant’s company;

c) interview the complainant and give him access to the file; and,

d) give him the opportunity to comment on OLAF’s conclusions before sending them to the Polish prosecution authorities.

12.  The Ombudsman’s inquiry team examined all the correspondence between the complainant and OLAF, and also inspected OLAF’s file on this case. The inspection report was sent to the complainant for comments.

Gathering of evidence by OLAF

Arguments presented to the Ombudsman

13. The complainant stated that OLAF failed to seek and accept as evidence data stored in the company’s servers located in Malta, and unilaterally decided which evidence is useful for its investigation. OLAF collected only information “in form of documents” from the company and its contractors in Poland, and failed to collect digital evidence stored in the servers in Malta. By doing so, OLAF failed to act impartially and to collect all relevant evidence, both inculpatory and exculpatory.

14. In its replies to the complainant, OLAF stated that, in accordance with Regulation 883/2013[4] and its internal guidelines[5], it is for OLAF to determine which investigative measures need to be taken and when. OLAF’s investigators conduct the investigative activities that are deemed necessary to seek evidence for and against the person under investigation. OLAF added that it would give the complainant the opportunity to comment on the facts concerning him[6] once the investigation is completed.

15. During the inspection meeting with the Ombudsman’s inquiry team, OLAF’s representatives explained that the evidence collected at the premises of the complainant’s accountant in Poland, at those of one of the company’s suppliers (also in Poland), and from the Polish authorities and the company’s insolvency administrator was sufficient for OLAF to reach its conclusions.

16. They also explained that the complainant wrote to OLAF stating that information that would prove his innocence was stored in the company’s Malta­based servers, to which he claimed he would no longer have access after 31 December 2016. However, the complainant did not provide any indication about the type of information that might be stored on these servers. In addition, he sent his letter on 28 December, that is, during the 2016 Christmas period, when OLAF’s investigation was almost completed. In January 2017, OLAF replied and informed him that, upon completion of the investigation, he would be provided with an opportunity to comment on the facts established. He was further invited to provide OLAF with any relevant information concerning the investigation. 

17. In his comments on the inspection report drawn up by the Ombudsman’s inquiry team, the complainant pointed out that OLAF should have collected not only the evidence incriminating him, but also the evidence on the servers in Malta, which was likely to exonerate him[7]. The complainant further explained that, at the time he was being investigated by OLAF, he was legally not allowed to hand over the servers. Finally, the complainant considered that it was “absurd” that OLAF would not carry out an investigation due to the Christmas holidays. He also contested OLAF’s statement that he had not provided any indication about the type of information that might be stored in the servers in Malta.

The Ombudsman's assessment

18. Under Regulation 883/2013, OLAF enjoys full independence and broad discretion regarding how it conducts its investigations. However, the use of a discretionary power cannot lead to arbitrariness, and therefore, OLAF’s powers are subject to legal limits, established by the Regulation and EU case-law[8]. While OLAF certainly has a margin of discretion to choose the most appropriate investigative methods and techniques, it has no discretion regarding its obligation to seek evidence for and against the person under investigation, and to conduct its investigations objectively and impartially[9]. It must take into account all the relevant aspects of the case (both inculpatory and exculpatory evidence), in order to uphold objectivity and fairness. This is especially so when it is asked to investigate an aspect of the case that could exonerate the person under investigation[10]. If OLAF decides not to do so, it must provide a reasonable justification.

19. In this case, OLAF did not follow up on the complainant’s request to seek and gather evidence from the company’s servers located in Malta. The Ombudsman notes that there are a number of reasons that explain why OLAF chose not to do so. First, while the complainant made this request on 28 December 2016, he also stated that, at the end of 2016, the information and evidence stored in the servers in Malta would be lost. It was not clear whether OLAF would have been able to seek to obtain the evidence after 31 December 2016. Therefore, OLAF could have reasonably considered that the complainant’s request, made three days before the end of the year and during the winter holidays, came too late. Second, the complainant did not provide any address or any information detailing where the servers in question were located, other than that they were in Malta. Third, the complainant had had a number of opportunities to mention the issue of the servers to OLAF, starting from the date when he was notified of the investigation (9 September 2015). Finally, contrary to what OLAF stated, the complainant did provide to OLAF information about the kind or nature of the evidence stored in the company’s servers in Malta[11] . However, he did not explain why or how that information could exonerate him.

20. In light of the above, the Ombudsman finds that, by not seeking to retrieve and gather the digital information mentioned by the complainant, OLAF did not misuse its discretionary powers. The Ombudsman also notes that, in any event, the complainant also had the possibility to raise the issue of the allegedly exculpatory evidence stored in the servers located in Malta with the national authorities to which OLAF has forwarded its Final Report and its recommendations. 

21. That said, the Ombudsman considers that a public institution should make all possible efforts to assist citizens when they make reasonable requests. If it is not possible to accommodate their requests, the institution should explain why this is so. The Ombudsman has therefore carefully examined the explanations that OLAF gave to the complainant as to why it had decided not to look for the evidence that the complainant had mentioned in his requests. In its replies to the complainant in January 2017, OLAF merely referred to its discretion to decide which investigative measures need to be taken and at what time, and to the principle that its investigators conduct the investigative activities that are deemed necessary to seek evidence for and against the person under investigation. Such statements are of a very general nature and do not explain why, in this case, the investigators did not deem it necessary to seek to obtain the evidence in question. It was only during the inspection meeting between the Ombudsman’s inquiry team and OLAF’s representatives that the latter provided detailed explanations in that regard.

22. While it was for OLAF to assess whether the evidence collected in Poland was sufficient for it to reach its conclusions, OLAF should have explained better to the complainant why it did not consider it necessary to inquire further into the allegedly exculpatory evidence stored in the company’s servers in Malta. In addition, the fact that he asked OLAF to look for the evidence in question during the holiday season does not mean that OLAF could not have addressed this request after the break.

23. As OLAF’s investigation is now closed, the Ombudsman considers that pursuing the matter further would serve no useful purpose. She will, however, make a suggestion for improvement for the future.

Alleged failure to investigate the Polish authorities

Arguments presented to the Ombudsman

24. The complainant stated that OLAF failed to resolve the dispute between the company and the Polish authorities[12], and to investigate how the Polish authorities gathered the evidence that led to the adoption of the decision to recover funds from the company.

25. In its replies to the complainant, OLAF noted that the Polish authorities had conducted project-related verifications, which led to decisions to recover ineligible expenditure, and which were then challenged by the complainant before the competent administrative and judicial authorities. Therefore, the dispute between the company and the Polish authorities did not fall within OLAF’s remit. During the inspection meeting with the Ombudsman’s inquiry team, OLAF’s representatives also explained that the complainant had made several allegations of corruption against the Polish authorities, which were different from the matter under investigation. These new concerns were forwarded to the relevant unit in OLAF for further assessment[13]. The unit examined the information received and found that there was no need to open an investigation into this matter.

The Ombudsman's assessment

26. The information in the file inspected by the Ombudsman shows that the dispute between the complainant and the Polish authorities concerned the question whether the checks carried out by the national authorities (which led to the decision to recover funds received by the company) were fair and proportionate. Therefore, OLAF’s explanation to the complainant that it was not within its remit to deal with conflicts between individuals and national authorities is correct.

27. The Ombudsman also notes that the complainant raised concerns about corruption by the Polish authorities. OLAF transferred the information received from the complainant to the relevant unit in OLAF for evaluation. This unit did not consider it necessary to open an investigation into the matter based on this information. In his comments on the report drawn up following the inspection carried out by the Ombudsman’s inquiry team, the complainant did not make any comments on this point.

28. In light of the above, the Ombudsman considers that OLAF has taken sufficient action in relation to this issue.

Right of defence

Arguments presented to the Ombudsman

29. The complainant stated that OLAF refused (i) to interview him and (ii) to give him access to the file of the investigation[14], in breach of his right of defence. Thus, he was not aware of the evidence in OLAF’s file on which OLAF based its findings, and therefore could not comment on it[15].

30. In its replies to the complainant, OLAF explained that, according to EU case-law[16], the “opportunity to comment” is sufficient to ensure respect for the right of defence of a person under investigation (Article 48(2) of the EU Charter of Fundamental Rights), and that the refusal to grant him access to the investigation file does not infringe the right to good administration (Article 41(2) of the Charter). Granting access to documents that are in OLAF’s file could harm its investigative activity, and go against its obligation to preserve the confidentiality of the investigation, professional secrecy and data protection. Moreover, the conclusions of its Final Reports cannot adversely affect the legal position of the person under investigation. In cases where OLAF transmits information to EU or national authorities for further action and these authorities intend to adopt, based on elements established during an OLAF investigation, an act adversely affecting a person who was under investigation by OLAF, that person may ask those authorities for access to the file, in accordance with the procedural rules in force in that country.

31. During the inspection meeting with the Ombudsman’s inquiry team, OLAF’s representatives elaborated on the difference between an “interview” (Article 9(2) of Regulation 883/2013), and the “opportunity to comment” (Article 9(4) of Regulation 883/2013). They pointed out that Regulation 883/2013 does not provide the person under investigation with a right to be interviewed. The possibility to carry out interviews is merely one of the investigative measures available to OLAF’s investigators. It is, therefore, within OLAF’s discretion to decide, in each case, whether such a measure would be necessary. In this case, OLAF considered that, in light of the evidence gathered, interviewing the complainant would not be necessary. 

32. On the other hand, the opportunity to comment under Article 9(4) of Regulation 883/2013 can be exercised either in writing, or orally during an interview. In the present case, OLAF invited the complainant to comment in writing on the facts established throughout OLAF’s investigation. Therefore, the complainant’s right of defence was fully respected.

The Ombudsman's assessment

33. OLAF provided the complainant with the opportunity to comment on the facts concerning him[17]. What the complainant takes issue with is the fact that OLAF chose to do so in writing rather than in an interview.

34. In light of the applicable rules[18], it was clearly for OLAF to decide whether the complainant should be invited to comment on the facts in writing or in an interview. The Ombudsman also notes that the complainant’s comments were taken into account by OLAF in its Final Report on the investigation. In any event, the complainant did not explain why the fact that he submitted his comments in writing instead of in an interview infringed his right of defence.

35.  OLAF’s investigations are not of a criminal nature, in which an oral hearing may be obligatory. They are of an administrative nature. As OLAF explained, its Final Reports are not binding on the national authorities and cannot be considered as an act adversely affecting the person under investigation by OLAF[19]. Since OLAF’s final recommendations are submitted to the competent national authorities, it is for those authorities, if they intend to take measures adversely affecting that person, to give him or her the opportunity to exercise his/her right of defence in accordance with the administrative or criminal-law procedure applicable[20].

36. That said, the Ombudsman considers that, while OLAF has discretion in deciding which investigative measure is most appropriate in a specific case, it should clearly explain the reasons why it chooses not to carry out an interview when the person under investigation requests it to do so. The Ombudsman will therefore make a suggestion for improvement below. 

37. Finally, the Ombudsman finds that the reasons provided by OLAF for refusing access to the investigation file are correct and in line with the relevant EU case-law. As explained above, it is in the context of the national investigation that the complainant must be provided with the opportunity to examine all the documents or evidence in the investigation file that may be relevant for his defence. In addition, the case-law relied upon by the complainant[21] is not applicable in this case, as OLAF’s Final Report is not an act adversely affecting a person under investigation by OLAF.

Opportunity to comment before OLAF’s report was sent to the Polish prosecution authorities

Arguments presented to the Ombudsman

38. The complainant said that OLAF sent its Final Report to the national authorities before providing him the opportunity to comment on it.

39. During the inspection, OLAF’s representatives confirmed that OLAF had sent the Final Report to the Polish authorities only after the complainant had provided his comments.

The Ombudsman's assessment

40. The inspection of the documents in OLAF’s file confirmed that OLAF had sent its Final Report to the national authorities after having received the complainant’s comments on the facts concerning him, and after having incorporated these comments in the Final Report. In case the arguments of the complainant were to be understood as referring not just to the Final Report but also to the communication OLAF had had with the national authorities during the investigation, the Ombudsman notes that that communication consisted merely of information gathering.

41. In light of the above, the Ombudsman finds no maladministration in the way OLAF carried out its investigation in this case.

Conclusion

Based on the inquiry, the Ombudsman closes this case with the following conclusion:

There was no maladministration by the European Anti-fraud Office in this case.

The complainant and the European Anti-fraud Office will be informed of this decision.

Suggestions for improvement

Whenever it makes use of its discretion to decide which investigative measures need to be taken and at what time, OLAF should clearly explain, if the person under investigation so requests, why it chooses to take (or not) a specific investigative measure.

OLAF should explain why it chooses not to carry out an interview if the person under investigation asks it to do so.

 

Emily O'Reilly

European Ombudsman

Strasbourg, 07/12/2018

 

[1] The complainant was a ‘person concerned’ in that investigation. A ‘person concerned’ means “any person or economic operator suspected of having committed fraud, corruption or any other illegal activity affecting the financial interests of the Union and who is therefore subject to investigation” by OLAF (Article 2(5) of Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013 concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC) No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999, OJ L 248, 18.9.2013, p. 1–22.

[2] With the West Pomeranian Agency for Regional Development (ZARR) and with the Polish Industrial Development Agency (PARP).

[3] The complainant claimed that, after the end of December 2016, he would no longer have access to those servers.

^[4]  See footnote 1 above.

[5] Article 11 of the Guidelines on Investigation Procedures for OLAF Staff (GIPS).

[6] As provided for in Article 9(4) of Regulation 883/2013.

^[7] The complainant referred to Article 8.5 of the GIPS, which provides that: “All information or evidence, whether inculpatory or exculpatory, gathered in the course of investigation or coordination cases, shall be collected and recorded in due and proper form.”

^[8] According to EU case-law, when EU institutions have a margin of discretion in respect of decisions or measures they take, they must comply with the rights guaranteed by the EU legal order in administrative procedures. Those guarantees include, in particular, the duty of the institution to examine carefully and impartially all the relevant aspects of the individual case, the right of the person under investigation to make his or her views known and to have an adequately reasoned decision (see judgment of the Court of 21 November 1991, Technische Universität München v Hauptzollamt München-Mitte, case C-269/90, ECLI:EU:C:1991:438, paragraph 14).

^[9] Article 9(1) of Regulation 883/2013 provides that “In its investigations the Office shall seek evidence for and against the person concerned. Investigations shall be conducted objectively and impartially and in accordance with the principle of the presumption of innocence and with the procedural guarantees set out in this Article". (emphasis added)

[10] See also judgment of the General Court of 8 November 2017, Ivanyushchenko v Council, case T­246/15, ECLI:EU:T:2017:789, paragraphs 74 and 117.

[11] In his letter of 28 December 2016, the complainant referred to “communication between management and employees, communication between the company and its subcontractors on each task in the project”, to “source code files, technical documentation, employee and end-user training sessions”, and to “documentation how each phase, each task and even each document in the project has come to existence, who has maintained it, how it was maintained”.

[12] In the complainant’s view, the Polish authorities failed to abide by EU law when exercising their management and control functions concerning the public expenditure in relation to the project in question, and incorrectly interpreted the principle of fair competition.

[13] Unit 0.1 - Investigation and Selection Review Unit.

[14] The complainant raised the argument about OLAF’s refusal to give him access to the file in his comments on the inspection report drawn up by the Ombudsman’s inquiry team.

[15] In that regard, the complainant relied on the judgment in Aalborg Portland A/S and Others v Commission, Joined Cases C-204/00 P, C-205/00 P, C-211/00 P, C-213/00 P, C-217/00 P and C­219/00 P, paragraph 68.

[16] Gomez-Reino v Commission, Case T-215/02, ECLI:EU:T:2003:352, paragraph 65; Nikolaou v Commission, Case T-259/03, ECLI:EU:T:2007:254, paragraphs 242-246; Franchet and Byk v Commission, Case T-48/05, ECLI:EU:T:2008:257, paragraphs 255-258; Catinis v Commission, Case T­477/11, ECLI:EU:T:2014:267, paragraphs 63-64; and IMG v Commission, Case T-110/15, ECLI:EU:T:2016:322,  paragraphs 34-36.

[17] OLAF invited the complainant to comment on 19 April 2017 (in English), and again on 24 May 2017 (on his request, in Polish). It also gave him the possibility to submit written information early on, which he did in a statement of 5 June 2016.

[18] Article 9(4) first paragraph of Regulation 883/2013 provides that “once the investigation has been completed and before conclusions referring by name to a person concerned are drawn up, that person shall be given the opportunity to comment on facts concerning him”. Article 9(4) second paragraph, first sentence provides that “To that end, the Office shall send the person concerned an invitation to comment either in writing or at an interview with staff designated by the Office”. (emphasis added) Finally, Article 9(2) provides that “The Office may interview a person concerned or a witness at any time during an investigation”. (emphasis added)

[19] Commission v Violetti and Others, case T-261/09 P, ECLI:EU:T:2010:215, paragraphs 46-73.

[20] Nikolaou v Commission, cited above, paragraphs 243-246; IMG v Commission, cited above, paragraph 34.

[21] In case Aalborg Portland A/S and Others v Commission, cited by the complainant, the Court held that, when conducting administrative investigations into and imposing fines for anti-competitive practices and agreements, the Commission must give the undertaking concerned the opportunity to examine all the documents in the investigation file which may be relevant for its defence, including both incriminating evidence and exculpatory evidence (paragraph 68).