Hungarian public prosecutors have followed a recommendation from the European Anti-Fraud Office (OLAF) and opened proceedings against individuals accused of illegally overcharging for the renovation of children’s playgrounds using EU money. Prosecutors are calling for prison sentences for the fraudsters, who illegally pocketed more than €1.7 million in European and Hungarian funding.
OLAF Director General Ville Itälä said: “I welcome the decision by the Hungarian authorities to bring proceedings against the fraudsters investigated by OLAF, in line with our initial recommendations. This was a clear case of fraud against EU and Hungarian taxpayer money, and it is good to see that the Hungarian prosecutors agree with this assessment. This case is a prime example of how OLAF and national judicial authorities work together to take on the fraudsters to ensure that every euro of European funding is spent as and where it should be. This kind of investigation is at the heart of what OLAF does and I am delighted that our collaboration with the Hungarian authorities in this case has led to such a positive outcome.”
OLAF opened an investigation in 2011 into the possible manipulation of the initial cost estimation and irregular tender processes for the construction of children’s playgrounds in small municipalities in Hungary. The net costs of the construction or renovation of the playgrounds were fully reimbursed from a combination of EU (European Agricultural Fund for Rural Development) and national funding. Only value-added tax (VAT) costs were not reimbursed.
The OLAF investigation found that a consultant had colluded with two colleagues to artificially inflate the costs related to the renovation and construction work. Meanwhile, a fourth individual was found to have established a new company with the express purpose of carrying out the construction work. The fraudsters targeted smaller Hungarian municipalities – with fewer than 5,000 inhabitants – offering to renovate or construct their public playgrounds at minimal cost. The consultant put in place a system in which he requested significantly overpriced offers from other companies and made use of these to apply for funding from the authorities in Budapest.
Once the project was awarded, the same consultant was put in charge of the tendering procedures, which were manipulated in order to systematically favour the same general contractor. The work was carried out by sub-contractors at a much lower price: in most cases, the main contractor charged more than double the real cost of the work completed by the sub-contractors.
The fraudsters also managed to ensure that the municipalities did not even need to cover the VAT costs not reimbursed by the funding. Instead, the VAT was covered by payments from a foundation funded by companies linked to the consultant or the construction firm.
OLAF’s investigation showed that the total amount of irregular subsidies paid for 145 projects was around €4m. This amount was excluded from EU financing by the European Commission and the corresponding amount was reimbursed to the EU budget by Hungary.
The case was closed in 2014, with recommendations to the Hungarian General Prosecutor to initiate judicial procedures. OLAF also provided expertise and information to the Criminal Directorate-General of the Hungarian Tax and Customs Agency, under the supervision of the Capital’s Prosecutor’s Office, for their criminal investigation.
According to the indictment, the Hungarian authorities have found sufficient evidence of the fraud being carried out in in 60 projects between 2009 and 2013, as a result of which the three main defendants pocketed more than 536 million forints (€1.7m) of EU and Hungarian public money. The fourth defendant is considered to have defrauded almost 187m forints (€609,000).
The public prosecutor’s office in Budapest is calling for custodial sentences against the fraudsters, as well as fines and a ban on holding company directorships and undertaking public works. The principal defendant in this case is already in pre-trial detention in Hungary in relation to another criminal case, while his accomplices remain at large.
OLAF mission, mandate and competences
OLAF’s mission is to detect, investigate and stop fraud with EU funds.
OLAF fulfils its mission by:
- Carrying out independent investigations into fraud and corruption involving EU funds, so as to ensure that all EU taxpayers’ money reaches projects that can create jobs and growth in Europe;
- contributing to strengthening citizens’ trust in the EU institutions by investigating serious misconduct by EU staff and members of the EU institutions, and;
- developing a sound EU anti-fraud policy.
In its independent investigative function, OLAF can investigate matters relating to fraud, corruption and other offences affecting the EU financial interests concerning:
- All EU expenditure: the main spending categories are Structural Funds, agricultural policy and rural.
- development funds, direct expenditure and external aid;
- some areas of EU revenue, mainly customs duties, and;
- suspicions of serious misconduct by EU staff and members of the EU institutions.
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EAPM: Keeping tabs on lung cancer and Commission pharma strategy
Good day, and welcome, health colleagues, to the first European Alliance for Personalised Medicine (EAPM) update of the week. We have more news on the upcoming EAPM round table on lung cancer, as well as all the usual health-care updates, writes European Alliance for Personalised Medicine, Executive Director Denis Horgan.
Lung-cancer screening and European Beating Cancer Plan
Yes, we are all aware that by far the best way to reduce numbers of lung cancer patients is to persuade smokers to stop. Although not all sufferers are, or have ever been, smokers. High-risk groups exist, of course, and early diagnosis is vital. Currently, five-year survival rates stand at a mere 13% in Europe and 16% over in America. This will be discussed in our upcoming event on 10 December.
It is the most commonly found cancer in men and lung cancer in women is being represented by a “worrying rise” according to the World Health Organization. Some one billion people on the planet are regular smokers. And figures show that lung cancer causes almost 1.6 million deaths each year worldwide, representing almost one-fifth of all cancer deaths.
The European Respiratory Society and the European Society of Radiology (also a supporter of the event, as is the European Cancer Patient Coalition - ECPC), the societies have recommended screening for lung cancer under the following circumstances: “In comprehensive, quality-assured, longitudinal programmes within a clinical trial or in routine clinical practice at certified multidisciplinary medical centres.”
NELSON and victory?
The NELSON study into computed tomography (CT) screening of lung cancer showed that such screening reduces lung cancer deaths by 26% in high-risk asymptomatic men. The findings also indicated that, with screening, the results could be even better in women.
For screening to be cost effective, it has to be applied to the population at risk. For lung cancer, this is not simply based on age and sex, as it is in the majority of breast or colon cancer screening. Europe needs to involve all key groups in developing recommendations and guidelines for implementation, adapted according to the healthcare landscape of individual countries.
Various member states have already shown a willingness to move forward in lung-cancer screening, and several countries representatives will take part in the event.
The Alliance and its stakeholders realize that, among other elements, what is required in Europe is: continuous screening monitoring, with regular reports; assured consistency and enhanced quality of commented data for the screening reports; reference standards for quality and process indicators should be developed and adopted.
All of the above will be discussed at the lung-cancer screening event, and it is envisaged that a coordinated plan will emerge, which will make its way to Commission and Parliament policymakers and member state health system chiefs.
EU Pharma strategy on the horizon
Affordability, availability and sustainability are the main focus points of the EU’s new pharmaceutical strategy, due to be published tomorrow (25 November). Coming in the wake of the COVID-19 pandemic, the EU’s pharmaceutical strategy aims to “future-proof” the European health-care sector. The new strategy, set to be unveiled on Wednesday, is designed to improve and accelerate patients’ access to safe and affordable medicines while also supporting innovation in the EU pharmaceutical industry.
Health Commissioner Stella Kyriakides has previously described the strategy as a “cornerstone” of health policy over the next five years. It is considered a key pillar of the Commission’s vision to build a stronger health union, as President von der Leyen set out in her 2020 State of the Union speech. It will also inform the newly proposed EU4Health Programme and align with the Horizon Europe programme for research and innovation, as well as contribute to Europe’s Beating Cancer plan.
And the European Commission has unveiled the first building blocks of a broader health package aimed at increasing the range of preparedness tools to respond to future cross-border health threats. Patient-oriented approach A first part of the strategy underlines that “research priorities should be aligned to the needs of patients and health systems.”
Therefore, the whole EU system of pharmaceutical incentives should be reoriented to stimulate innovation in areas of unmet medical needs, such as neurodegenerative and rare diseases as well as pediatric cancer. An example of unmet medical needs mentioned in the document is antimicrobial resistance (AMR), which decreases a doctor's ability to treat infectious diseases and perform routine surgery. By 2022, the Commission will explore new types of incentives for innovative antimicrobials, as well as measures to restrict and optimise the use of antimicrobial medicines.
The US drug regulatory agency, FDA (Food and Drug Administration), has just issued an Emergency Use Authorization (EUA) for the treatment of mild to moderate intensity COVID-19 in adult and pediatric patients who they have not been hospitalized. The therapy, still under investigation, is based on monoclonal antibodies and goes by the name of bamlanivimab. This therapeutic agent, developed by the pharmaceutical company Eli Lilly, is a monoclonal antibody (mab) similar to those that were part of the cocktail of drugs for COVID-19 that was administered to Donald Trump.
Beginning EU Health Union
The European Commission is beginning the building of the new European Health Union to help strengthen the EU’s health security framework, and to reinforce the crisis preparedness and response role of key EU agencies. The creation of the European Health Union was announced by the European Commission‘s President, Ursula von der Leyen, in her State of the Union address. The Commission is putting forward a set of proposals to reinforce Europe’s health framework as more co-ordination is needed at an EU level in order to step up the fight against the COVID-19 pandemic and future health emergencies.
Protecting the health of European citizens
The proposals focus on revamping the existing legal framework for serious cross-border threats to health, as well as reinforcing the crisis preparedness and response role of key EU agencies such as the European Centre for Disease Prevention and Control (ECDC) and the European Medicines Agency (EMA). President of the European Commission, Ursula von der Leyen stated: “Our aim is to protect the health of all European citizens.
The coronavirus pandemic has highlighted the need for more coordination in the EU, more resilient health systems, and better preparation for future crises. We are changing the way we address cross-border health threats. Today, we start building a European Health Union, to protect citizens with high quality care in a crisis and equip the Union and its member states to prevent and manage health emergencies that affect the whole of Europe.”
Von der Leyen urges gradual lifting of coronavirus lockdowns
European governments should lift coronavirus lockdowns and other social restrictions gradually to prevent a third wave of infections, according to European Commission President Ursula von der Leyen. Europe has been grappling with a second surge in Covid-19 infections since September which has led to the re-introduction of lockdowns in certain countries and an overall stepping up of restrictions across the region.
Despite a slowdown in cases in some countries in recent days, the numbers are still high and are not yet showing clear signs of a cresting. In the meantime, Europeans are pondering whether they’ll be able to gather with their families over the holiday period.
News that the AstraZeneca/Oxford vaccine is effective and could have up to 90% efficacy was met with widespread joy on Monday (23 November). “We expect COVID-19 vaccines to develop into a significant market as new products gain approval and begin to meet the high demand for protection from the disease,” according to a brief analysis by Fitch Solutions. It notes that with more products looking likely to pass regulatory hurdles, “these products will help to develop COVID-19 vaccines into a multi-billion-dollar commercial opportunity”.
“Prices are expected to rise in the short-term as countries look to secure access in light of positive Phase 3 trial results, but over the long-term are expected to fall back as new products enter the market,” the briefing added. “Companies will soon be in a position to capitalize on success in Phase III trials through commanding high prices for vaccines,” the analysis states.
Extra plenary session between Christmas and New Year’s Eve
The European Parliament is preparing for an extra plenary session between Christmas and New Year’s Eve to give its consent to a possible post-Brexit trade deal with the UK, according to several EU officials and diplomats. It is likely to be held on 28 December, to give EU governments the opportunity to have the very last say, as foreseen by the bloc’s procedures, before the end of the UK’s Brexit transition period on 31 December.
Private Greek hospitals compelled to take COVID-19 patients
The Greek government took over two private hospitals in Thessaloniki on 19 November in which transmission of the coronavirus has been particularly widespread. The decision was reached after the private clinics failed to voluntarily provide 200 beds for COVID-19 patients despite appeals by the Health Ministry. Public hospitals in Thessaloniki and other parts of northern Greece have been struggling to cope with the influx of coronavirus patients, adding beds from other wards and setting up isolation tents after reaching their official capacities. .
And that is everything from EAPM for now, do stay tuned during the week for further updates on all health-related issues, stay safe, and remember to check out the agenda of EAPM’s 10 December lung cancer round table here, and register here.
Trial of ex-French president Nicolas Sarkozy begins
Nicolas Sarkozy has been under investigation for years He was nicknamed the "bling-bling" president for what many in France saw as his lavish tastes - but now Nicolas Sarkozy (pictured) faces the stark reality of a soulless courtroom. He has gone on trial accused of corruption and influence-peddling, for allegedly trying to bribe a magistrate in return for information about an investigation into his party finances.
Sarkozy is the first ex-president in modern France to appear in the dock. He led France from 2007 to 2012. His first court appearance was brief, however. The session was suspended after 30 minutes - until Thursday - because a key figure in the case, former senior judge Gilbert Azibert, is required to have a medical examination. He is 73 and did not appear in the dock with his co-accused - Sarkozy, 65, and the ex-president's former lawyer Thierry Herzog. There is a question mark over the court proceedings because of the general coronavirus disruption. The trial is set to run until 10 December.
If found guilty, Sarkozy could face a 10-year prison sentence and €1m (£889,000) fine. Another former right-wing president, Jacques Chirac, was given a two-year suspended prison sentence in 2011 for diverting public funds and abusing public trust. The offences dated back to his time as mayor of Paris. But he did not appear in court, owing to ill health. He denied wrongdoing. French magistrates have spent years investigating allegations of corruption dating back to Sarkozy's election campaigns and period in office.
This case is linked to a long-running investigation into the right-wing politician's suspected use of secret donations to fund his 2007 presidential campaign. The prosecution alleges that Sarkozy and lawyer Thierry Herzog sought to bribe Gilbert Azibert with a prestigious job in Monaco in return for information about that investigation.
It is known as the "wiretapping case" in France, because phone calls between Sarkozy and Herzog were tapped in 2013-2014, in which Sarkozy used the alias "Paul Bismuth" and they discussed Judge Azibert. French media report that Sarkozy was heard telling Herzog "I'll get him promoted, I'll help him."
Sarkozy denies any wrongdoing - and he points out that Judge Azibert did not get the Monaco position. "Gilbert Azibert got nothing, I made no approach [on his behalf] and I've been rejected by the Court of Cassation," Sarkozy said in 2014, referring to his battle to clear his name. In October 2013 magistrates dropped him from their investigation into claims that he had accepted illicit payments from L'Oreal heiress Liliane Bettencourt for his 2007 presidential campaign.
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