The mysterious swindling of the EU and the Bank of Italy – POLITICO | #ukscams | #datingscams | #european

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ROME — Italian courts are nearing the end of a puzzling and long-running drama around an elusive former Bank of Italy economist who plundered hundreds of thousands of euros while advising an EU committee.  

From 2009 to 2012, the economist, referred to here as “G.” as his name cannot be legally published under Italian privacy laws, swindled both the bank and the European Economic and Social Committee (EESC) of €234,394.06 by way of a comically simplistic scheme that involved, in part, sleeping in his office while pretending to pay rent. He also faked thousands of euros in expense claims that allowed him, among other things, to maintain a property in Venice.

Despite being found out, he still managed to land a job at the European Commission — where he was able to continue the ruse for two more years.

In a sentencing brief shared earlier this month with POLITICO following years of silence on the case from both the Bank of Italy and the EESC, G. was finally ordered by the Rome branch of the Italian Court of Auditors, which monitors public expenditures, to pay over €150,000 back to the EESC. That’s in addition to a 2019 criminal court verdict in Rome sentencing him to a year and two months in prison as well as a token fine of €400. An appeal remains possible, if vanishingly unlikely. Italian daily Il Messaggero has also reported on the verdict. 

How G. managed to pull off the scheme for half a decade under the noses of the two institutions remains a mystery, although it is consistent with previous evidence of lax standards at the EESC. Years passed before authorities even attempted to bring him to trial, and less than half of the money stolen has been recovered.

Perhaps even stranger is the fact that G. has failed to turn up to court or offer any response to the charges against him. His whereabouts, meanwhile, remain unknown. 

‘National expert’

G. joined the EESC in 2009 on secondment — that is, a foreign assignment — from the Bank of Italy, where he was a senior economist. At the EESC he had the status of a “national expert,” a kind of consultant who works with the Committee, but not for it. 

The EESC is one of Brussels’ oldest institutions, having been established in 1958 as a platform for employers’ federations, unions and civil agencies to lobby politicians. That was before the European Union was established, and as the Union’s institutions have grown more powerful, the need for the EESC has faded. It lingers on, a vestigial organ of European integration that costs taxpayers more than €140 million annually, despite its “negligible” influence.

That proved to be a creatively stimulating environment for G., who immediately began playing both sides against the middle.

The lion’s share of the ill-gotten gains, €152,856.97, was pulled in by gaming the “subsistence allowances” offered by the EESC to national experts. These allowances, today paying €119.90 daily, are in some circumstances legitimate. G., however, claimed his without notifying the Committee that he had already been granted a wage increase by the Bank of Italy under the terms of his secondment. 

G. also fleeced his employer in Rome, conjuring vast expense claims out of thin air for which he provided no documentary proof. They included €11,192 for the transfer of household goods from Brussels to his property in Venice, and €64,898 in allowances for fabricated accommodation expenses. The bank did not respond to multiple requests for comment. 

Irregularities soon emerged regarding G.’s use of the EESC office in Brussels | James Arthur Gekiere/Belga Mag/AFP via Getty Images

Homing from work

It was G.’s peculiar living arrangements that first alerted his colleagues to what he was up to.

At first, the EESC told POLITICO, nobody suspected a thing — until certain “irregularities” began to come to light regarding G.’s use of his EESC office. An examination of entry and exit times in the office, for instance, revealed that he had claimed an excessive amount of overtime that didn’t “even correspond to the office’s opening hours,” the EESC said.

At the same time, the Committee noticed that the office was done up with G.’s personal effects, “with the door hermetically sealed to prevent anyone from coming in.” 

Most concerning was the presence in the office of a mattress, according to one Bank of Italy official who is familiar with the case. The implication, the official said, was that G. was using his office as living quarters — while pocketing thousands of euros in accommodation expenses. 

The EESC described these irregularities in a complaint that it submitted to both the Bank of Italy and the Permanent Representation of Italy to the EU in 2012. At this point, the EESC said, G. was due to leave anyway, and it was too late to carry out a formal dismissal. The banker then moved on to the European Commission until 2016, though that institution declined to give further details on how he got the job and under what circumstances he left. 

After leaving the EESC, G. continued defrauding the Bank of Italy, claiming a further €5,445.76 in wages despite being “unjustifiably absent” from work between November 2013 and January 2014, according to the Court of Auditors. Made aware of this fraud, the bank fired him in January 2014, according to the Court. 

G. was finally prosecuted in an Italian criminal court in 2017, leading to a fine and 14-month jail sentence in 2019. In a separate case, the Court of Auditors ordered that he pay back the stolen funds, but that verdict was complicated by his mysterious absence from the hearings — as well as his failure to respond to the Court’s summons, sent to the Italian embassy in Brussels. The Court had to effectively appeal its own verdict, ordering an additional attempt to contact G. via his last known addresses in Brussels and Palermo. The second round of summons went unanswered, and the verdict was upheld. 

As well as facing jail time, G. must now pay €152.856,97  in restitution to the EESC, but no money to the bank, which the Court said had been able to “recover” the €81,537 owed to it independently. The bank did not comment on how it managed that. 

Banker at large 

The EESC tells POLITICO it’s confident it will get its money back. But in reality the verdict may have little practical effect, given G.’s absence from the legal process.

He was a ghost at his own trial, and his whereabouts remain unknown. His Brussels residency expired way back in 2017, and authorities in Palermo haven’t been able to find him at his last registered address. In the recent sentence brief, no lawyer is cited as representing him. His LinkedIn profile says he still works for the Bank of Italy, but he hasn’t been seen there for years. 

“For a while he has been untraceable,” said the Bank of Italy official. “Nobody has managed to find him.”

That doesn’t exactly mean he’s a fugitive, and he is not yet subject to a nationwide manhunt. In Italian civil law, a defendant can choose to be legally absent from hearings, unwise as that may be. “The rationale is that if you receive a valid notification of the proceeding and decide not to do anything about it, it’s on you,” said an Italian legal expert granted anonymity because they were not permitted to comment on ongoing cases publicly. “But who in his right mind would do that?” 

Neither is his absence an acknowledgement of guilt. There are a number of reasons why G. might not have presented himself in court. He may be gravely ill, marooned in the Pacific or seconded to the great consultative committee in the sky. “Maybe he is in India!” a Court of Auditors official speculated, cackling wildly. G. may also simply be uninterested in defending himself — for reasons unknowable. 

G. continued to defraud the Bank of Italy after leaving the EESC | Riccardo Antimiani/EPA-EFE

Dishonor among thieved  

G.’s prodigious thieving does not reflect especially well on the internal financial controls of either of the institutions involved. Before the publication of this article neither had ever commented publicly on the case.

“It’s a squalid affair,” said the bank official, observing that the bank prefers to narrow its PR focus to matters of monetary policy. 

The EESC, for its part, said that while national experts were subject to strict financial controls even at the time of G.’s expense-fiddling, it has since reinforced its legal framework to ensure more rigorous vetting of possible double claims.

Whether G. himself will take note of this bold new framework or appeal the recent verdict will ultimately depend on his capacity — and willingness — to return from his unaccountable, yearslong sabbatical from earthly affairs. 

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