Keynote speech of the European Chief Prosecutor, Laura Kövesi, at the Policy Forum "Anti-corruption, Democratic Resilience and Economic Security" in Sofia, Bulgaria - 9 November 2023
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Dear Prime Minister,
Ladies and Gentlemen,
Thank you for giving me the opportunity to speak today.
I have been a prosecutor for more than a half of my life. I have fought against high-level corruption for many years. This is how you know me.
Of course, fighting corruption is about policies and action. It is about the right laws, and their consistent implementation. Which requires courage. It is about prevention and sanction. Of course.
However, in my experience, the key is to win the hearts and minds of the people.
It might be more difficult today than a few years ago.
Mainly because our democratic societies are targeted by vicious disinformation campaigns. The biggest problem is not that these campaigns disseminate lies on a scale never seen before. The biggest problem is that they seek to undermine our very ability to distinguish true from false. This, in turn, undermines our ability to distinguish right from wrong. At that point, who still cares about what is just?
When it comes to corruption, it was already hard enough to make citizens understand how it influences their lives. In reality, corruption has been and continues to be tolerated to a large extent. Everywhere. There is no clean country.
First and foremost, because most of the people do not see a direct impact of corruption on their life. And also because there is this tendency to consider that white collar crime, financial fraud, is not that dangerous after all. There is a great deal of fatalism too: this is the way of the world, the assumption goes.
In 2015, when I was the Chief of the Romanian anticorruption Office, a private company wanted to open a music club. They bribed public officials to obtain the necessary authorizations. They started organizing concerts in a building that did not comply with security obligations. Until one night, during a concert, a fire started – 64 people died, and a 180 were injured.
As we started to investigate the crimes related to corruption in this tragic event, we had to open another investigation. The victims were brought to a hospital supposed to have state of the art equipment to take care of their severe burns.
It turned out that the hospital managers bought the necessary medical equipment massively overpriced, only to enrich themselves. They signed documents according to which the barometric room had been delivered and installed, but it had never been functional.
Several victims of the music club fire died because of this. Others had to be transferred to other hospitals, abroad, as this was the only hospital with such an equipment in Romania.
Despite the years, I am still appalled by this case. Often, when we talk about corruption and financial fraud, we talk only about monetary damage – how it is not good for the free market economy, how it destroys fair competition. But I see all those victims, and their parents, their families.
So yes, corruption can become very quickly a question of life and death. By the way, I believe that our Ukrainian friends understood this a few years ago already. If anyone needs to become fully aware of the danger, it is not only them. It is us too.
Let me share some first-hand experience with you.
The European Public Prosecutor’s Office is the first transnational prosecution office, specialized in financial and economic crime. As I was appointed European Chief Prosecutor, I found out that we were expected to start operations in twenty-two Member States with a budget of little more than 6 million Euro. I was shocked. While there was substantial improvement since, I still cannot fully grasp why, 4 years later, we are still not where we should be. We need to finally put things right.
You know, sometimes I have a déjà-vu. I still hear that fighting fraud and corruption is good in theory, but problematic in practice, especially during electoral campaigns, as it can negatively affect the perception of the citizens.
I am a prosecutor. I think that for too long, we have been in denial about the level of financial fraud in general, and about the level of fraud affecting the financial interests of the European Union in particular.
What is even more worrying, for years, we have ignored what the real level of financial fraud means for our own security.
Let me explain.
There are not two separate criminal worlds. The world of the really bad and dangerous criminals smuggling drugs, trafficking people on the one side; and the world of white-collar criminals, “merely” corrupting and laundering money, on the other side. Serious organised crime cannot exist without financial crime.
In our investigations, we see for example that complex VAT fraud operations are financed with money obtained from other criminal activities. Moreover, we see the same operators laundering money from VAT fraud and other criminal activities. Therefore, when combatting cross-border VAT fraud, the EPPO is actually fighting with serious organised crime groups.
As an illustration, I can give you some inside information from our cases: Drug trafficking is too risky because of the long prison sentences. The members of the criminal groups think that VAT fraud is a “clean” sector, because you risk nothing, you just need to find an accountant, a good lawyer and someone who knows how to talk and you “can make big money”.
VAT fraud has been considered as risk free for a decade and, together with fraud in European funds, has grown into the biggest business of several serious organised crime groups.
This is not to tell you that the EPPO is a very important European institution. This is to ring the alarm bells.
Perhaps you know the American movie “Traffic”. It is about the war on drugs. There is this newly appointed Director of the US Office of National Drug Control Policy looking at the Mexican border, with binoculars. An agent from the Drug Enforcement Agency stands next to him and says:
“See, the problem is the Juarez cartel owns everything and everybody, all the property on the Mexican side, sometimes all the property on both sides. Warehouses, transportation, even tunnels. It’s very organized.”
On his way back to Washington, in the plane, the Director asks his staff to brainstorm on what to do and to think “out of the box”. The first idea that comes up is “unlimited funds”.
There is consensus, among us practitioners, that one of the big advantages of serious organized criminal groups against law enforcement and judicial authorities is money.
We cannot have “unlimited funds”. Therefore, our strategy cannot be to match the financial capacity of organized criminal groups. Instead, our strategy should be to cripple their financial capacity.
In reality, this is what we mean at the EPPO when we say that our prosecutorial policy is to improve the recovery of criminal assets and to focus on cases involving organized criminal groups.
According to Europol’s first threat assessment on financial and economic crimes, the value of seized assets in the EU amounted to at least 4.1 Billion Euro on average in 2020 and 2021. If this is true, then the EPPO currently already accounts for approximately 10% of all the ongoing seizures of criminal assets in the EU.
Be it as it may, Europol estimates that the amount of assets that law enforcement manages to take away from the hands of criminal networks in the EU still remains below 2% of yearly proceeds of organized crime. If this is true, we clearly need to seriously think about our priorities and the next course of action.
Ladies and Gentlemen,
If you allow them to proliferate, corruption and fraud eventually lead to threats, violence, and terror.
Rather than playing the proverbial three monkeys, we should roll up our sleeves and get down to work.
To win the hearts and minds of the people, they need to trust that the law applies to everyone, that justice is tangible.
I worked as a local prosecutor, and our work was important for our community, for our town. In the years that followed, I always applied what I have learned in the little city of Sibiu: only through an efficient work can you win the citizens’ trust, and constant work is the only path to keep it.
Therefore, our first duty is to do our job, and our main challenge is to be good at it. To always do our best.
Thank you for your attention.