The allegations are vehemently denied by the Commission, which challenges its accusers to produce evidence.
The accusations follow the unprecedented arrest last week by Belgian police of two Commission tourism officials. This resulted from the first ever decision by the Commission to lift the immunity from prosecution of two suspect officials.George Tzoanos, a Greek, and Pascal Chatillon, a Frenchman, are now locked in Brussels' Foret jail, following a demand from the King's Prosecution Office of the Belgian Justice Ministry for the Commission to allow the Belgian authorities to act. Mr Tzoanos's wife was also arrested, on charges of operating a front company in Greece.
The case has brought to light the fact that no Commission official has ever been charged under criminal law for fraud. Immunity from prosecution, which is granted to all staff to enable them to operate freely, means Belgian criminal prosecutors cannot become involved unless the Commission lifts immunity. Until this case, the Commission never deemed it necessary.
It was largely due to the campaigning of Edward McMillan-Scott, MEP for North Yorkshire, that the tourism scandal was forced into the view of the Belgian fraud authorities. MEPs are rarely willing to take such a confrontational approach, and the Belgian fraud squad would normally only receive information on EU corruption from the Commission's own whistle- blowers. But the whistle is rarely blown, as Commission staff take oaths of secrecy when they join.
Belgian sources close to the tourism inquiry, which dates from 1990, criticise the Commission's reluctance to act earlier over the tourism scam, in which bribes were allegedly paid and kickbacks taken. Mr Tzoanos's nick-name in the tourism trade was "Mr Ten-per-cent."
Mr McMillan-Scott, formerly responsible for parliamentary oversight of tourism policy, says he first presented evidence of bribery within the Commission's tourism unit in 1990 to David Williamson, the secretary general of the Commission. But the two prime suspects were not suspended until July 1994. Even then, the Commission did not lift immunity from prosecution. "I would not say it was a cover-up but, in this case the Commission certainly tried to put up a smoke screen," said Mr McMillan-Scott.
The European Union has recently been badly buffeted by a report of the Court of Auditors, its financial watchdog, which revealed that pounds 2bn of the 70bn ecu EU budget was unaccounted for in 1994. The Commission argues that the "missing millions" were misused in member states, not in Brussels. However, the Belgian charges cannot be so easily dismissed.
"We are not saying that all Commission Officials are corrupt. But many officials manage huge budgets and it is clear the Commission's own control systems do not always work," a Belgian official said. "In some cases it is without doubt that the fraud begins within the Commission itself. "
Although Belgian investigators have not produced evidence of other Commission fraud, they say that "information received" gives them "strong reason to believe" this week's arrests are the tip of the iceberg. They are particularly concerned about fraud in the big spending departments dealing with agriculture and aid. They scoff at Commission claims that there is no evidence of corruption elsewhere in the organisation, and that the Tzoanos-Chatillon case is a "one off". Granting immunity from prosecution to staff means the truth about Commission fraud cannot be established, Belgian sources say.
Per Brix Knudsen, head of the Commission's newly strengthened internal anti-fraud unit, Uclaf, defends the ability of his 130-man team to uncover any malpractice by Commission officials, saying his men are better equipped to establish the facts than the Belgian police. The Court of Auditors reports annually on spending misuse. Jacques Santer, the Commission President, made fighting fraud a priority when he took over a year ago.
The EU bureaucracy does not take kindly to accusations of corruption from the Belgian police, and says the Belgians ought to examine corruption in their own state machinery.