Statistics chief ran agency as a personal fiefdom away from the gaze of Brussels

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The Independent Online

Just four months ago Yves Franchet, director general of Eurostat, instructed staff to "celebrate together" at the 50th birthday of the EU's statistical agency. At M. Franchet's large home in Luxembourg there will be little champagne flowing today as one of the European Commission's most senior officials contemplates the wreckage of a glittering career.

Three reports into a multimillion euro fraud scandal at Eurostat point the finger firmly at M. Franchet as the architect of the biggest crisis of this European Commission. Moreover an inquiry into extraordinary goings-on at Eurostat paint a picture of its long-serving ex-director general as the ruler of a personal fiefdom.

Two hours down the motorway from Brussels, Luxembourg is a little world of its own, cut off from the Commission headquarters in Brussels. The grand duchy's capital is a small, prosperous city dominated by medieval fortresses, big banks and EU institutions. It has a low-tax regime and a small-town mentality. M. Franchet was a big fish in a small and extremely calm pond.

During his period in charge of Eurostat, the EU's statistical office outsourced work and colluded with private firms to create bogus or inflated contracts. M. Franchet, moreover, was not just in charge of Eurostat, he was also connected intimately with some of the firms, including CESD-Communautaire, which at one point he chaired.

Cash generated by the sale of EU data went into hidden bank accounts which were controlled by the 64-year-old French official. M. Franchet has denied any personal gain, and what the money was spent on remains unclear, although we do know that it included staff perks such as travel, dinners, volleyball and an equestrian centre.

Those who have had dealings with M. Franchet have found him "approachable" and even "charming", devoid of the arrogance displayed by some of France's haut fonctionnaires. But, significantly, he was little known in Brussels.

Instead M. Franchet spent most of his life in Luxembourg, where he lived a comfortable life even by the standards of a nation with the EU's highest income per capita. His basic salary as a top "A1" official was €185,000 (£128,000) a year, plus generous living allowances, easily enough to afford a holiday home in France.

This substantial EU pay cheque is still being drawn. Although he moved from Eurostat, that was at his request, and M. Franchet has been pushed quietly into a low-profile post while the investigations continue.

Married with two children, he is a keen golfer and a freemason who moved in the dry world of economic statisticians, and whose recent speeches include an exposition on "Statistics without borders, the elusive quest for market-relevant statistics, quality and timeliness of information".

After studying in Paris in the early 1960s, M. Franchet became an economist at the World Bank, and from 1965 to 1968 served in Congo. Between 1980 and 1983 he was deputy director of the European headquarters of the World Bank in Paris, and has also worked in Washington and Latin America.

When he took up the Eurostat post he said his ambition was to preside over the harmonisation of economic statistical methods.

In fact his job was important and politically sensitive. As the man in charge of Eurostat, M. Franchet played a role in determining whether countries' economic data qualified them for euro membership. Last year he received academic honours at the University of Bucharest, and picked up the Honorary Sign of Liberty of the Republic of Slovenia in Ljubljana. It is a fair bet that such honours will not be coming his way again.

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