Updated 1.20 p.m.

 A German MEP Inge Graessle has described the situation at the EU anti fraud agency OLAF as “a fire out of control”, after an audit report revealed serious irregularities with the way the investigation on former Commissioner John Dalli was handled.

“It seems we have a fire out of control here,” Dr Graessle said, urging fellow MEPs to “stop downplaying” these things.

She was commenting on a report by the supervisory committee responsible for overseeing the work of OLAF, the agency responsible for the investigation involving Mr Dalli.

The report was discussed at a hearing of the European Parliament’s budget control commission this morning.

The report is not public but it is understood that the committee questioned the legal basis of how OLAF obtained mobile phone records of the protagonists in the case.

The situation in OLAF is rotten

Dr Graessle placed her criticism directly on the doorstep of the Director-General Giovanni Kessler, who had a leading role in the Dalli investigation, saying that “these are not the working methods of OLAF but of the Director General”.

“The situation in OLAF is rotten,” she insisted.

Dutch MEP Jan Mulder went a step further, saying that he could not understand why European Commission President Jose Manuel Barroso did not check whether the supervisory commission had done its duty to scrutinise the Dalligate investigation and establish whether the rights of the people investigated had respected.

“Had the supervisory committee said then what they said now he would not have summoned Mr Dalli,” Mr Mulder said.

The supervisory committee only reviewed the investigation after it was communicated to the Commission and action was taken in respect to Mr Dalli, who was forced to step down after a short meeting with Mr Barroso in October 2012.

KESSLER URGES MALTA TO PUBLISH OLAF REPORT

Mr Kessler, who spoke briefly towards the end of the hearing, said he “must have read a different” report because he was “very positive” about it.

He argued that while the report, as was expected from such documents, had flagged areas where improvements were needed, there was no claim that the fundamental rights of anyone had been breached.

He insisted that, even in respect to the Dalligate investigation, the report of the supervisory committee had highlighted legal issues which OLAF “should look into but at no stage had said there was a violation of human rights or fundamental guarantees”.

He also urged Maltese authorities to publish the OLAF report so that there could be a transparent discussion about the matter. While doing this, he referred to “leaks” to the press intended to manipulate the situation, apparently referring to a report which said that the supervisory committee report had uncovered abuse in the way the Dalligate investigation was handled.

Such selective leaks, “not by disinterested parties” were intended to manipulate the situation, he said.

But Dr Grassle remained unimpressed with the director general, saying that she got a sense of déjà vu from a hearing last year in which similar problems were flagged between Olaf and the supervisory committee, adding that since then nothing had changed.

“I am interested in having a discussion with you Mr Kessler but from previous experience I know it will not go very far,” she said. I do urge you to stick to the truth, stick to the truth,” she said.

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