Europe braced for MEPs' expenses storm

Publication of suppressed report could undermine efforts to deal with eurozone debt crisis

The European Parliament will today back down and order the release of a secret report detailing the widespread abuse of expenses by MEPs, The Independent has learnt.

A meeting of senior MEPs is expected to accept a European Court of Justice ruling that there is an "overriding public interest in disclosure".

The decision could have far-reaching consequences for transparency within the European Parliament and wider European Union institutions. It will increase pressure on the parliament to publish more details of the expenses claims of MEPs including their travel expenditure, attendance records and the highly controversial €4,300 (£3,800) "go anywhere" budget given to members.

Given the difficulties the EU faces in persuading countries such as Greece, Ireland and Portugal to accept tough austerity measures, the re-emergence of allegations of misuse of taxpayer funds by MEPs is unlikely to be welcome on the streets of Athens or across the Union. It also means future reports – however controversial – into governance of EU institutions are likely to be put into the public domain.

"Bit by bit the parliament is being brought kicking and screaming towards transparency," said Chris Davies MEP, who first leaked the contents of the report compiled by the parliament's chief internal auditor, Robert Galvin, in 2008. "I was delighted by the European Court's decision. There is still a long way to go but I would hope pressure will now build to identify what was done to pursue those MEPs identified by Galvin as misusing the system."

The court ruled earlier this month that European institutions could no longer claim potential political controversy as grounds to refuse access of internal audit reports.

A leaked copy of the report to The Sunday Times revealed systematic abuses by Euro MPs of parliamentary allowances that enable them to pocket more than £1m from a five-year term.

Among the abuses it detailed were:

* Payments made to assistants of MEPs who were not accredited.

* End-of-year bonuses worth nearly 20 times the monthly salary paid to assistants, which allowed members to use up their full annual allowance.

* Some assistants doubled their salaries by banking pay-offs from outgoing MEPs at the same time as receiving salaries from incoming ones.

But despite widespread outrage at the allegations senior officials in the European Parliament refused to release the full report and fought a costly court battle with Ciaran Toland, an Irish lawyer, over its disclosure.

The parliament had argued that if such reports were released to the public then in future those writing them might not be prepared to offer frank advice and could adversely affect decision-making. However, this was rejected by the court.

Last night Mr Toland said: "I would very much welcome this development. When they refused me access to the report, the European Parliament effectively said that the taxpayers of Europe, who fund the parliament, cannot be trusted to know how their money is being spent by that parliament, nor are they entitled to know what recommendations exist for how the system should be reformed.

"What is at the heart of the case are central issues of European transparency law. This case has now established new rights of access to a wide range of documents by both citizens and the media. On a wider point, involving the public in any debate on legislative reform, or in respect of public funds, is an essential prerequisite of a democratic system. No self-respecting parliament should ever be afraid to discuss its finances in front of the citizens who elect it, and who pay for those very funds."

Those who argued against the publication will be anxious it should not inflame the situation in Greece. Anger there is so far directed at the Commission and other nation member states, but that could spread.

Sources in the European Parliament said last night that the Galvin report would be discussed today at a meeting of the Bureau of the Parliament which is responsible for matters relating to the budget, administration, organisation and staff. It is composed of the President, Jerzy Buzek, along with all 14 vice-presidents.

The release of the Galvin report is being backed by Diana Wallis, the vice-president responsible for transparency and is expected to be passed.

"The plan is to release the report and not question the wider element of the European Court's decision either," said the source.

The move was welcomed by the Ukip MEP Nikki Sinclaire, who has campaigned for greater transparency within European institutions.

Selected revelations from the Galvin Report

* Documentation was not provided for 63 of the 105 contracts examined.

* A series of bonuses awarded MEPs' assistants between three and 19.5 times their normal salary.

* A payment was made to a crèche, supposedly for secretarial work, whose manager was a local politician from the MEP's party.

* Payments were made to national political parties.

* One MEP paid the full £182,000 staff allowance to one person, suspected of being a relative.

* The report was based on a sample of 167 payments — out of a total of 4,686 — made during October 2004.