Shadow hangs over Euro Parliament construction finance

09 October 2009

In March, the European Parliament proudly inaugurated two new Brussels buildings, needed to house the ever-expanding travelling circus of members, assistants and bureaucrats. But the Parliament is less happy to talk about some of the financing arrangements behind the buildings' construction, writes Stephen Gardner. The Parliament leases the buildings, known as the Willy Brandt and József Antall buildings. It signed in 2004 a whopping €284 million deal with a Belgian developer which, shortly before, exercised an option to buy the land on which the buildings now stand. Under the deal, the developer was to raise the finance to fund the construction. Because of this, according to the Parliament, a public procurement process was not required for the financing bids. The developer oversaw it all, soliciting bids for the financing under which the buildings would be constructed, leased and eventually sold to the European Parliament. This is rather like buying a house and asking the seller to arrange the mortgage for you. Whose best interests will the seller look after? The Parliament has so far refused to release documents related to the deal. Many documents are held by the developer, and, the Parliament says, cannot therefore be made public. However, the Parliament holds a report, done by KPMG, on the financing bids assembled by the developer. But the Parliament will not release this either, citing commercial confidentiality. The EU Ombudsman has now weighed in, saying the Parliament should release the report and other documents, or "give convincing explanations for not doing so" -- the implication being that explanations so far have not been convincing. Will the Parliament clear up these muddy waters? It has until October 31 to respond to the Ombudsman. A version of this article originally appeared in Private Eye magazine.

 

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