A parliamentary hearing was told that fraudsters are increasingly trying to cash in on the rising popularity of renewable energy.
The hearing on Tuesday heard that “environmental crime” is on the rise throughout Europe, particularly in Italy where it is already described as a “serious problem”.
Antonio Pergolizzi, coordinator of an Italian environmental NGO, told MEPs that EU funding for the renewable energy industry was particularly at risk of abuse by such “gangs”.
He said that over the next 10 years, Italy alone was expected to receive up to €10bn of public money, much of it from the EU, for the renewable and energy efficiency sector.
He warned, “Great care will have to be taken with this money. We need more auditing and more controls to ensure it does not fall into the hands of the Mafia.”
The public hearing, “Efficiency and effectiveness of EU funding,” was organised by Belgian Greens MEP Bart Staes, a member of the budgetary control committee.
It heard from several experts, including Pergolizzi, who outlined a case study on renewable energy in Italy which he said, highlighted the scale to which the Mafia had already infiltrated the sector in his country.
“This is already a serious problem, but I believe it is one that we can control,” he said.
Having first targeted hydroelectric generation, Mafia gangs, he said, were now targeting the fast-rising popularity of wind energy.
Some cases involve windmills that stand derelict or are simply never built, while others are used to launder profits from other crime enterprises.
Pergolizzi said, “First, they control the grassroots, then they seek to shut out the free market and influence the labour market.
“They then try to regulate every aspect of the sector. One of the challenges is to follow where the public money is going.”
He told the hearing that the biggest challenge was tackling links between criminal gangs and people who work in public administration.
“This is where the key decisions are taken and this is where the Mafia and such groups have a strong foothold. They already, of course, have their hands on the levers of power.
“We are not talking about a media-generated folklore here. This is a financial phenomenon on a global scale.”
Szabolcs Fazakas, a former MEP and now member of the European Court of Auditors, told the meeting the court was “committed” to ensuring that EU funds were spent correctly.
The aim, he said, was to ensure “value for money”, but he conceded that “this is not always the case in several important areas”.
Fazakas, a former chairman of the budgetary control committee, said this included EU cohesion policy, which accounts for the second biggest chunk of EU funding.
He said, “The key message we are trying to convey is that it is not a question of spending more but spending it better. We have to show a clear and visible benefit in the way that EU funds are spent which could not be achieved at member state level alone.”
He said that many of the irregularities in EU funding which are uncovered by the Court are due to “incorrect application” of national rules.
They are often the result of ineligible claims for funding and “non-compliance” of conditions for payments.
“This raises obvious concerns, for example, in the way regional funds are spent,” he said. “It calls into question the whole issue of EU expenditure.”
Fazakas said, “What is needed is a unified effort by all the EU institutions to ensure that EU funds are spent more effectively and efficiently.
“This is in the interests of both the institutions themselves and EU taxpayers.”
Further comment came from Troels Oerting, assistant director of operations at Europol, the EU law enforcement agency, who said fraudsters had created an “EU-wide” network of criminality, sometimes involving the abuse of EU funds.
“In some ways, it is a huge problem, not least because these people adapt and change so quickly,” he said. “It is clear that more needs to be done to tackle this problem.”