E.U. Defends Farm Subsidy Program Exploited by Autocrats

BRUSSELS — European Union officials, questioned about new revelations of corruption and exploitation of the bloc’s farm subsidies, said Monday that outright fraud was very rare and that auditors swiftly root it out.

But they also acknowledged that law enforcement often falls to the same national leaders who warp the system — and benefit from it.

“We are not here to replace national governments,” said Mina Andreeva, a spokeswoman for the European Commission, the administrative arm of the 28-nation European Union.

The responses at a daily news briefing came after a lengthy New York Times investigation that showed how oligarchs, populist leaders and their families have made millions of dollars from European farm subsidies, often based on dubious land deals or outright corruption.

European subsidies have helped underwrite Mafia-style tactics in Slovakia and enrich a cadre of politically powerful land barons in Bulgaria. The Times tracked at least $42 million in subsidies last year to companies owned by the prime minister of the Czech Republic, Andrej Babis.

The Times report showed how, under the Hungarian prime minister, Viktor Orban, farmland has been auctioned off to political patrons and to members of Mr. Orban’s own family. Since farm subsidies are linked to the land, the government auctions immediately made the new owners eligible for huge amounts of European subsidies each year.

Ms. Andreeva noted that European authorities were auditing Mr. Babis’ companies and that, in response, Czech authorities have frozen some subsidies. She also pointed out that a European public prosecutor, a newly created position, is scheduled to begin work at the end of next year.

That prosecutor will have authority to investigate crimes against the European Union’s budget. Hungary is among six countries, however, that refuse to participate in that project. Despite pressure to join, Mr. Orban says prosecutions must be left to the national governments.

The Commission has proposed new rules that would require countries to uphold rule-of-law standards to qualify for money. Hungarian politicians strongly oppose that effort.

In response to the Times report, journalists from several European countries pressed officials about whether subsidy manipulation, when overseen by national governments, enabled fraud to fall through the cracks.

“Obviously there is no-mans land between the national responsibility for such malpractices and the lack of oversight on behalf of the European Union,” said Georgi Gotev, the publisher of the news site Euractiv’s publication in Bulgaria.

The Times report showed how the subsidies have been channeled to that country’s politically connected elite. Mr. Gotev said he tried to get answers from European officials a year ago about this problem and was referred to local officials, who refused to answer questions.

For years, populist politicians across the continent, including national leaders like Mr. Orban, have condemned the European Union for domestic political gain. They denounce Brussels as an intrusive force, a threat to their national sovereignty, even as they eagerly accept its largesse.

The European Union is not a country and does not have a government, per se. The administration of most of the bloc’s budget is governed by what is known as “shared management” — meaning that the European Commission supervises the spending but national governments carry it out.

“We’re acting precisely within our powers,” Ms. Andreeva said. But the weakness revealed by the Times investigation is not that the European Union fails to follow its own rules, but that those rules are not enough to restrain abuses.

Europe’s $65 billion annual farm fund is one of the biggest subsidy programs in the world, accounting for 40 percent of the European Union’s budget. The bloc spends three times as much on agricultural subsidies as the United States, and the money is widely seen as sacrosanct.

The farm program dates to the foundation of the European Union itself, and it is one of the key elements that hold the bloc together.

European Commission officials have in years past proposed restrictions like capping how much any one farmer can receive. Such a cap could help narrow the chasm between small farmers and the wealthiest agriculturalists who receive the bulk of the public assistance.

But such proposals have never survived the legislative process. A subsidy cap is once again up for debate as lawmakers discuss the next version of the subsidy bill.

Selam Gebrekidan contributed reporting from London.

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