Month-to-month allowances given to MEPs to pay for workplace provides have been used to buy shares within the arms, tobacco, mining and fossil-fuels industries to finance a heavily-indebted European Parliament pension scheme.
This included tens of hundreds of shares in a US-arms business that manufactured cluster munitions, banned by a 2008 worldwide conference signed by EU states.
Cluster munitions comprise a number of explosive bomblets that carpet a big space and may kill unsuspecting civilians probably weeks later.
Amongst people who had manufactured them previously are Raytheon, Honeywell Worldwide, and Textron Inc. The European Parliament’s voluntary pension scheme invested in all three.
In 2008, it owned 14,900 shares in Raytheon with a market worth of $547,000 and 27,000 shares in Honeywell Worldwide with a market worth of $637,000. In 2007, it held 7,600 shares in Textron Inc with a market worth of $370,000.
Textron Inc stopped the manufacturing of enormous cluster munitions in 2016 after proof emerged that the Saudis had used them towards civilians in Yemen.
And Norway’s sovereign wealth fund had in 2005 blacklisted Raytheon and Honeywell Worldwide for producing and promoting cluster munitions. So too did KBC Financial institution in Belgium 2006 given the controversy surrounding the weapons.
Together with Aerojet Normal, Honeywell Worldwide developed the CBU-87 mixed results munition, which was broadly utilized in US Desert Storm within the early Nineteen Nineties to devastating impact.
Human Rights Watch estimates 60 p.c of these killed from cluster munitions dropped by US and UK forces in the course of the first Gulf Battle have been beneath the age of 15. Raytheon and Honeywell Worldwide not manufacture cluster bombs, they are saying.
Round 11,800 shares have been additionally owned in Northrop Grumman company and with a 2008 market worth of $382,000. And it held one other 79,000 shares in BAE Techniques, a British multinational arms, safety, and aerospace firm, with a £311,000 market worth.
It has held shares in BAE Techniques for the reason that Nineteen Nineties, when it was often known as British Aerospace. It’s unclear if the pension nonetheless holds the above talked about shares given the historic data on investments was solely disclosed up till 2010.
Apart from the moral questions of utilizing European taxpayer cash to spend money on the arms business to finance an MEP pension fund, the European Parliament will seemingly need to squeeze some €400m from the general public for its bailout.
The parliament has been unable to discover a answer, elevating alarm from MEPs overseeing budgets.
“It is a shame. I believe the most important query is what occurs with the deficit of the fund,” stated German Inexperienced MEP Daniel Freund. “Is there going to be further taxpayer cash thrown into this? I believe not a cent ought to go into this,” he stated.
Monika Hohlmeier, a German MEP and Johan van Overtveldt, a former Belgian finance minister, issued related statements in a joint letter to the EU parliament president Roberta Metsola final yr.
They stated that the fund poses “potential devastating reputational dangers for the European Parliament”.
‘Not within the public curiosity’
The parliament, and its former funding advisor, Credit score Agricole Luxembourg Non-public Financial institution, have additionally refused to reveal the investments.
In a letter to EUobserver, the European Parliament claimed disclosure would undermine the safety of economic pursuits, brushing away public curiosity arguments.
An enchantment made by this web site was additionally rejected in December 2022 for related causes by conservative European Parliament vice-president Roberts Zile, who oversees document-access requests.
Credit score Agricole Luxembourg Non-public Financial institution additionally refused after which declined to elucidate why when pressed.
However EUobserver then obtained an in depth breakdown of the investments relationship from 1994 till 2010 after downloading annual statements from a public register.
These statements have been produced by the directors of the pension scheme, a non-profit often known as the “Pension Fund of the Members of the European Parliament.”
The non-profit is at present registered on the European Parliament constructing in Luxembourg and was initially administered by energetic and later former MEPs.
The scheme got here beneath a Luxembourg funding fund often known as a ‘SICAV-FIS’.
First arrange within the early Nineteen Nineties and open to MEPs till 2009, the voluntary pension fund is bleeding giant quantities of money due to the variety of individuals hitting retirement age.
Others embody Miguel Arias Canete when he was European commissioner for climate. Canete was additionally among the many MEPs who sat as an administrator of the scheme.
Requested for a remark when introduced with the investments, the European Parliament stated it was not a liberty to a make assertion.
“The voluntary pension fund is a non-profit affiliation ruled by Luxembourgish legislation. It’s a third celebration distinct from the European Parliament that may due to this fact not touch upon the requested components,” stated a EU parliament spokesperson, in an electronic mail.
MEPs solely needed to pay into the fund for 2 years to get a pension. For each €1,000 paid into it, the EU parliament contributed €2,000.
The MEP share was deducted from their month-to-month workplace allowance of a number of thousand euros, itself shrouded in secrecy given the dearth of transparency on the how the cash is spent.
Among the many largest defenders of the secrecy behind the month-to-month allowance is European Parliament vice-president Rainer Wieland who advised this web site that its lack of transparency is a non-issue.
Different investments made on behalf of the voluntary pension scheme embody massive tobacco, mining, fossil fuels, and main prescribed drugs.
Others nonetheless have been made in offshore tax havens like Bermuda and the Cayman Islands.
EUobserver will quickly be revealing the small print behind these as a part of on-going sequence right into a damaged MEP pension fund that the European Parliament’s management has been unable or unwilling to resolve.
This text is the primary in a sequence in regards to the questionable investments made by the MEP pension fund, and its deficit.