Ostend (Brussels Morning Newspaper) – The European Anti-Fraud Office has launched an investigation into the city of Ostend in West Flanders for possible mismanagement and fraud with European subsidies. The city received around 3 million euros in the context of a project with the sister city of Banjul, in Gambia.
European Anti-Fraud Office (OLAF) started an investigation into Belgian Ostend to examine EU subsidies handling problems and financial misuses. In 2019, Ostend obtained €3 million worth of European funding to support its cooperation project with Banjul from Gambia. Sustainable waste management and local government support were supposed to be funded by the money granted to Banjul.
According to Gambia’s National Authority, the EU funds were spent on expenses that had no connection to the project, such as resort meetings and curtains for Banjul’s mayor. The Ostend officials shall appear in front of the OLAF inquiry committee for early April.
“Although that report from the Gambian authorities needs to be qualified somewhat,”
says Alderman for Budget, Maxim Donck (N-VA).
“That money was made available to the city of Ostend for the project and then paid out in installments to Banjul in the form of pre-financing,”
Donck explains.
“So we had little control over what happened with the money, but we are 100 percent responsible. It should never have been approved.”
“The subsidy application was submitted in 2018, before we were on the board,” says Donck. “We only received the subsidies in 2019, when we were indeed co-governing. Due to corona, that project was stretched over a longer period and now we have to conclude that certain documents are no longer available.”
The city must now answer for the possible mismanagement and fraud of European subsidies in early April.
“They have requested a lot of documents and we are going to make them available to them. We are now going to defend ourselves as best we can and try to justify everything,”
says Donck.
“Based on our file, I am moderately positive about the outcome,”
says Donck.
“But of course, as I said before, certain documents were lost.”
If it turns out that fraud or mismanagement took place, the city will have to pay back the money (in part).
“I hope we don’t have to pay back anything,”
says Donck.
“But let’s be clear, every euro we have to pay back is one too many. Moreover, it will be with tax money from the people of Ostend, this should never have happened.”
Donck confirms this again now.
“I am currently working on a phase-out scenario, in which we can still keep a number of things. Think for example of the nursing students who moved there. Of course, it is not the intention that we finance the recruitment of government employees in Banjul.”
What is the history of Ostend’s partnership with Banjul and EU funding?
Ostend city in the Flemish Region of Belgium has entered into a twin partnership relationship with the city of Banjul in the Gambia since 2016 based on cooperation in urbanism and governance improvement. This led to the acquisition of €3 million in subsidies from the EU for the “City Link Ostend Banjul” project as part of the Development Cooperation Instrument of the European Commission in 2019.
The funds would be used in the way of sustainable waste management, enhancement of the local government of Banjul, and general development of infrastructural utilities. Nevertheless, following Audit Commission of the Republic of the Gambia exposed the misuse of the funds, stating that the latter was spent on non-sector purposes such as accommodation in expensive hotels and other expenses.
EU subsidy rules mandate recipient cities to distribute funds correctly by means of strict reporting requirements. Functions of Banjul are said to have been depended on by Ostend officials yet missing documentation makes the auditing process more difficult. The case demonstrates broader concerns with EU twinning projects because insufficient monitoring systems can generate fund mismanagement issues.
Since 2014 OLAF has identified more than 1,000 instances of potential EU fund fraud that resulted in recovering €1.4 billion. A case similar to Ostend’s has already resulted in a 2022 investigation of cohesion fund abuse by officials in a Romanian city. Future EU controls of municipal partnerships may face adjustments based on the investigation’s results.
