Anti-Graft Crusader Takes Aim at EU’s $73 Billion Fraud Problem
(Bloomberg) -- In her homeland of Romania, Laura Codruta Kovesi ignited an unprecedented anti-corruption drive that landed the country’s most powerful politician behind bars.
As Kovesi gears up to head the first European Union-wide prosecutors office, she’s looking to repeat her domestic success by targeting as much as 60 billion euros ($73 billion) that she estimates the bloc’s budget loses each year to fraud.
The stakes have never been higher: Kovesi’s Luxembourg-based European Public Prosecutor’s Office, which becomes operational next month, arrives with the EU preparing to dole out record sums to member states -- about 2 trillion euros in financing from its regular budget and pandemic stimulus fund.
There have been early obstacles. Some signatories to the EPPO’s creation are yet to put forward their own prosecutors. But Kovesi, 47, remains confident she can help shave at least a year off the average time an embezzlement probe currently takes when she assumes control over existing investigations and gains the power to open new ones.
“We’re a very enthusiastic team,” she said Monday in an interview. “We have this once-in-a-lifetime opportunity to build a prosecutors’ office that can serve as a reference to how things should be done.”
Kovesi was the face of the historic anti-graft push in Romania, which -- among EU members -- has languished for years near the bottom of Transparency International’s annual Corruption Perceptions Index. She was responsible for jailing dozens of high-ranking officials between 2013 and 2018, before being ousted by the then-ruling party. That didn’t prevent its influential leader later being sentenced to 3 1/2 years in prison for abuse of office.
‘Matter of Concern’
As the EPPO takes shape, politics is again getting in Kovesi’s way.
Only 22 of the EU’s 27 members signed up to what is a voluntary project -- with Hungary, Poland, Sweden, Denmark and Ireland deciding not to. Slovenia, which has joined parts of eastern Europe in thumbing its nose at some of the EU’s democratic norms, hasn’t finalized its candidates for the office, despite selecting its two nominees almost half a year ago.
“Slovenia is a matter of concern,” Kovesi said. “What kind of message do you want to send when you know the office starts working on June 1 and yet you haven’t nominated prosecutors?”
The government in Ljubljana didn’t respond to email and phone requests for comment on its candidates.
Once up and running, Kovesi expects to have an initial backlog of about 3,000 cases during the EPPO’s first year. While aiming to accelerate case times, she says tangible results will still take time because of the lengthy judicial process before final court rulings.
The bulk of cases in the current pipeline is from Italy, Romania, the Czech Republic, Slovenia and Germany, according to Kovesi. But the net is likely to widen as the start of the EU’s Recovery and Resilience Facility offers greater opportunity for fraud.
“When there’s more money and more flexibility, there are more risks,” Kovesi said.
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