THE European Commission suffered a double embarrassment yesterday with the disclosure that two separate criminal investigations have been launched into activities involving some of its staff.

The more damaging concerns Eurostat, the European Union’s statistical office in Luxembourg, which is alleged to have been involved in a €900,000 (£640,000) scam, while the second involves a Commission official accused of renting out slum properties to illegal immigrants in Brussels.

Eighty Brussels police officers raided six run-down buildings in the city on Thursday that were being used to house scores of illegal immigrants.

The owner, a middle-aged Commission employee, was immediately arrested and is currently in prison awaiting trial.

The circumstances surrounding the two inquiries could hardly have been worse for the Commission, which has spent much of the past 3½ years putting in place strict internal controls and modernising its staffing policy in order to stamp out inefficiency, fraud and financial mismanagement.

The Brussels official is understood to be a Belgian working in a junior capacity in the Commission department that handles justice and home affairs issues and takes the lead in drafting European immigration legislation, including measures to stop the flow of illegal migrants.

News that French prosecutors are investigating Eurostat badly tarnished the celebrations organised this week to mark the 50th anniversary of the Luxembourg-based agency, which compiles EU-wide statistics and surveys, including sensitive data on the single currency.

The French decided to open the investigation after receiving information from an inquiry by the EU’s own anti-fraud office into allegations of false accounting between Eurostat and outside contractors.

In a letter to the French public prosecutor, dated March 19, the head of the EU fraud office, Franz-Hermann Brüner, alleged that a French company with its headquarters in Paris was involved in the scam, which is estimated to have siphoned off €900,000 from the EU budget. The information he supplied was sufficiently detailed to convince the Paris court to open a preliminary inquiry in early April.

The European Commission insisted yesterday that it had not been informed of the French legal action or of the results of the EU’s anti-fraud investigation.

A spokesman refused to comment on the allegations that some of the institution’s officials might be involved in the illegal activities.

But he emphasised that these “seem to refer to activities pre-dating the Prodi Commission”, which took office in September 1999.

He confirmed that the Commission would take “account of the evidence, conclusions and recommendations . . . when deciding on its follow-up actions”, adding: “Believe me, if there are grounds to act, we will act and if the axe has to fall, it will.”

It emerged yesterday that the EU fraud office has launched six separate investigations into Eurostat’s activities, the first dating back to 1999.

Two of these have been completed and the results handed to the Luxembourg authorities, which have since opened their own inquiries.

As yet no Eurostat employees have been directly implicated in the alleged financial irregularities.

Asked how long the existing investigations were likely to take, one official replied: “It’s like unravelling a ball of string. It depends how complicated the strands are.”

The housing clampdown, which was the result of investigations launched last December, uncovered 58 illegal immigrants. Most were Roma people who had fled from Romania, while others had been smuggled into the country from Nepal and Somalia.

All were living in squalid conditions. In one instance, 30 refugees were crammed into a single house, with each paying its owner €70 a month.

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