British Eurocrat in fraud investigation

A senior British official working for the European Commission is under investigation for fraud.

Michael Emerson, formerly the European Union's ambassador to Moscow, has been accused of siphoning off large sums in European subsidies meant to support the Russian economy. He returned to Brussels last month. The official is "'presumed innocent", and is continuing to work, the spokesman said.

If the claims are substantiated, they will fuel concern about fraud within the European Commission and misuse of EU funds. Mr Emerson is one of the most senior officials ever to fall under suspicion, and the area of assistance to Russia is one of the most highly sensitive areas of EU foreign policy.

According to the allegations Mr Emerson, a former accountant who has worked for the Commission since 1973, passed on large contracts to his own business contacts in Moscow, St Petersburg and elsewhere in order to build up his own business empire.

Mr Emerson, who now has a senior post in the Commission's foreign policy directorate in Brussels under Hans van den Broek, the Commissioner for Foreign Affairs, was unavailable for comment last night.

A Commission spokesman confirmed that an internal fraud inquiry is under way and that the allegations, which come from outside the Commission, are being taken seriously. The Commission's fraud inquiry unit, UCLAF, is co-ordinating the investigation, but there were no plans to take take action against Mr Emerson until the results of the investigation were known, said a spokesman.

The EU's Court of Auditors, its financial watchdog, revealed last year that pounds 2bn of EU funds was unaccounted for in 1994. The Commission argues that the missing money is the result of mis-use in member states. However, last month Belgian fraud investigators accused the Commission of failing to tackle fraud, after Belgian officers arrested two high ranking tourism officials from the Commission on corruption charges.

The Emerson case could prove embarrassing for Britain which has led calls for action against EU fraud. A number of British officials hold senior posts within the Commission, including David Williamson, the Secretary General.

Mr Emerson has held a series of key Commission posts, including economic adviser to Roy Jenkins, the former EC President. Colleagues last night expressed surprise that allegations should be levelled against such a respected official.

As EU ambassador in Moscow, Mr Emerson was responsible for overseeing the EU's Tacis programme, under which 500bn ecu in grants is made available to Western companies operating in the former Soviet Union.