An internal report confirming expenses fraud by some MEPs has been locked in a secret room. So do they really deserve the new powers they’ll get under the Lisbon Treaty?

It should be the most glorious of times for the European Parliament. Last week, the body marked its 50th anniversary and the Lisbon Treaty, if ratified, will substantially increase its powers. At the same time, the parliament is embroiled in a grubby financial scandal concerning misappropriation of funds by MEPs.

Last week, at a session to mark the parliament’s half-century, the rhetoric was predictably high-blown with the parliament’s president, Hans-Gert Pottering, declaring that the parliament had ‘‘fought to secure more and more rights’’ and ‘‘today it does credit to its name’’.

The president of the European Commission, Jose Manuel Barroso, said a strong European Parliament was an ‘‘indispensable partner for other institutions’’. The Lisbon Treaty would extend parliament’s powers and strengthen the commission’s dual democratic legitimacy, he said.

If the treaty is ratified, it will extend the power of co-decision - meaning the European Council will have to get the parliament to agree to new measures - into the areas of agriculture, fisheries, transport and structural funds, as well as justice and interior affairs.

In fact, the parliament will become a co-equal legislator for almost al l European laws, and crucially, will enjoy full parity with the council when agreeing the EU’s annual budget.

This increased ‘‘democratisation’’ is one of the central arguments that Irish government ministers have been making in favour of the treaty. Far from transferring sovereign powers from Dublin to the bureaucrats of Brussels, they claim, the treaty provides for amore democratic, open and accountable Europe.

‘‘For those who believe in a democratic Europe, Yes is the only way to vote,” Brian Cowen told a conference recently.

But the financial scandal is casting a shadow over the celebrations. Characteristically, the parliament has attempted to cover it up, reserving its threats of sanctions for those would reveal details of the scandal, rather than for those guilty of stealing from the European taxpayer.

An internal auditor examined the expenses and staff costs submitted by a sample of members of the parliament. He discovered evidence that some MEPs had been retaining or redirecting some of the €16,000 a month allowance for paying assistants.

According to reports in the European press, one MEP appeared to have collected the full allowance while employing no assistants. Another employed a single assistant, but claimed for others.

The auditor also found that some MEPs set up shell companies to pay assistants but the companies were actually owned by their relatives. Others paid most of the allowance to their wives, while employing junior staff at a lower cost.

According to Jens-Peter Bonde, an often Eurosceptic Danish MEP who addressed the Forum on Europe at Kilmainham two weeks ago, the report has found ‘‘massive suspicion of fraud with taxpayers’ money from 2004-06’’.

‘‘Members are suspected to cheat with taxes, social security and Vat. There are also examples where salaries for assistants are directed to accounts from the members themselves. In one example, money had been sent to a day-care centre and, in another example, to a service provider dealing with wood,” Bonde said in a lengthy statement.

‘‘In more than half of 22 studied dossiers in regard to service contracts, the employer’s public registration number is wrong. In one example, a special Christmas bonus was given to an assistant that was 19.5 times his monthly salary.”

However, it is the parliament’s reaction to the findings as much as the fact of the fraud which has the potential to gravely damage the institution. Although individual MEPs are not identified in the auditor’s report, the parliament has refused to release it.

Only members of the budget committee who signed a confidentiality agreement were allowed to read the report, which is kept under lock and key in a room whose location has not been disclosed - the buried report in the secret room. Notes cannot be taken by anyone reading the report. However, a Dutch MEP has released some details on his website.

If anything, the scandal appears to have made MEPs more determined to keep details of their financial dealings to themselves, despite warnings that abuses threaten to undermine the work of many honest and conscientious members. A committee of MEPs has rejected a recommendation by the EU’s ombudsman that members of the parliament should publish details of their perks and expenses.

MEPs are paid the same as members of their national parliaments, leading to huge anomalies in their salary levels, but that system is due to end next year. Some MEPs, from ex-communist countries, receive as little €850 a month, while the best paid deputies, from Italy, receive more than €12,000.The lavish perks and allowances system is in part intended to compensate the lower paid MEPs, but is available to all.

Irish Labour MEP Prionsias De Rossa struck a defensive note when contacted for his view on the matter. ‘‘I’m sick and tired of journalists ignoring the work of MEPs and then when one or two MEPs try to boost their publicity in their own member states, by alleging that all MEPs are involved in wrongdoing, you all sit up and take notice. I’m sick and tired of it. Goodbye,” he said.

Fine Gael MEP Gay Mitchell, however, said if any MEPs were shown to be involved in fraud, they should be prosecuted. ‘‘Let the expenses be published and be done with it,” he said. However, he too expressed frustration with press interest in the issue.

Parliament members have traditionally been extremely touchy when queried about their expenses and perks. In 2004, when an Austrian MEP and former investigative journalist, Hans-Peter Martin, secretly filmed MEPs signing on for a daily allowance and then leaving the parliament, his colleagues were furious.

Martin submitted a dossier of over 7,000 individual allegations to parliament president, Pat Cox, but Cox dismissed the allegations and accused Martin of a ‘‘slur campaign’’. A British MEP wrestled Martin to the ground when the Austrian attempted to film him signing the attendance register.

However, the problems faced by the parliament go beyond some of its members’ venality. Turnout for the last European election was just 45 per cent, and dropped as low as 30 per cent in some countries. In the meantime, MEPs continue to campaign for the ratification of the Lisbon Treaty, which would increase the parliament’s power. Whether it deserves it is another matter.