EU General Court rules for the first time on financial consequences of alleged irregularities regarding a former member of the EU Court of Auditors

 

 

Alessandro Nato* and Camilla Ramotti**

 

*Associate Professor in European Union law, University of Teramo

**Postdoctoral Research Fellow in Administrative Law, Luiss Guido Carli, Rome

 

Photo credit: Cedric, via Wikimedia Commons

 

 

1.     Introduction

 

The role of EU institutions and officials in managing and protecting Union funds remains a relatively underexplored area within European legal scholarship. For this reason, the present post will address this specific issue, investigating case-law that evaluates how effectively EU institutions handle supranational public finances.

 

On September 11^th, 2024, in its Judgment in Case T-386/19, CQ v Court of Auditors, the General Court of the European Union partially annulled a decision concerning CQ, a former Member of the European Court of Auditors (ECA).

 

The dispute arose from an action brought by CQ against the ECA on June 24^th, 2019, in which the applicant requested, in essence, that the Court: (i) declare the action admissible and well-founded; (ii) annul the decision of the Secretary General of the Court of Auditors of April 11^th, 2019, which classified the sum of € 153,407.58 as an undue payment and order the recovery of that amount, plus interest at a rate of 3.5% from May 31^st, 2019.

 

CQ had served as a Member of the Court of Auditors from March 1^st, 2006 until April 30^th, 2018, completing two terms of office. Prior to his appointment, CQ had held various political roles in the Kingdom of Belgium dating back to the 1980s. During his tenure at the Court, he was assigned to the section responsible for auditing EU expenditure related to external relations, enlargement, and humanitarian aid.

 

In 2016, the Court of Auditors received information regarding several serious irregularities allegedly committed by CQ, who was informed of these allegations in July 2016, which he has consistently denied.

 

In October 2016, the Secretary-General of the Court of Auditors referred the matter to the European Anti-Fraud Office (OLAF), concerning activities by CQ that had led to potential undue expenditure being charged to the EU budget. OLAF subsequently decided to initiate an investigation and, in March 2017, the Director-General of OLAF formally notified the President of the Court of Auditors of the opening of an investigation into potential irregularities involving CQ. These included allegations of misuse of the Court's resources, breaches of applicable rules concerning official missions, and matters affecting the financial interests of the Union.

 

Following several exchanges of information and documents between OLAF and CQ, the Court of Auditors received OLAF’s final report, which concluded that CQ had misappropriated resources of the Court in connection with activities unrelated to his official duties. The report found that CQ had improperly used fuel cards, misused the insurance policy for his official vehicle, been absent from work without justification, failed to declare external activities, disclosed confidential information, and been involved in a conflict of interest.

 

Meanwhile, the Court of Auditors had sought to recover the full contested sum of over €157,000 for the irregularities attributed to CQ. CQ paid this amount but simultaneously lodged an action before the General Court of the European Union seeking the annulment of the recovery decision and compensation for non-material damage allegedly suffered.

 

 

2.              The protection of Eu’s financial interests

 

In Case T-386/19 (for further comments, see EU Law Live Blog and BETKONEXT Newsletter n. 2/2024) the General Court found that the OLAF investigation had not uncovered evidence of all the alleged irregularities. The Court also concluded that the ECA’s decision to recover the sums in question was sufficiently reasoned and well-founded.

 

On the merits, the General Court held that although five years had elapsed between the facts in question and the establishment of the financial entitlements, the majority of the claims were not time-barred, as the ECA could only have identified the relevant sums after OLAF’s investigation was concluded.

 

Moreover, in relation to the allegations concerning breaches of procedural safeguards, the Court found that it could not be excluded that the applicant had been afforded a sufficient opportunity to be heard on the relevant elements, even those he could not comment on prior to OLAF’s report. Given the absence of any new or concrete evidence to the contrary, and the applicant’s ability to raise such matters during the written stage of the proceedings, the plea was rejected as unfounded.

 

The Court further determined that a significant proportion of CQ’s meetings with politicians were unrelated to his duties as a Member of the Court of Auditors, rendering the expenses associated with those meetings irregular. However, finding that certain claims were time-barred and that certain mission and representation expenses, along with costs related to CQ’s driver, were legitimate, the Court annulled part of the recovery decision.

 

Ultimately, the General Court set aside certain aspects of the ECA’s recovery decision.

 

It ruled that several claims were indeed time-barred and that some of the mission and representation expenses, as well as driver-related costs, were valid. Consequently, the General Court partially annulled the ECA’s decision, reducing the contested amount by €19,254.20, while rejecting most of CQ’s claims.

 

Regarding CQ’s claim for compensation, the General Court held that there was insufficient evidence to establish that the ECA’s actions caused direct damage to his reputation or that it was responsible for the unauthorized disclosure of information.

 

 

3.              Damage compensation

 

In the CQ case at hand, the plaintiff sought compensation of 50,000 euros, claiming that he had suffered serious damage to his career and reputation from the dissemination of information related to an OLAF investigation. According to him, the ECA had violated the presumption of innocence by disseminating elements suggesting his responsibility before he was formally informed. He disputes that the report was forwarded to third parties (members of the Court and Parliament) before him, and that the press was able to publish its contents as early as July 11, 2018. On the same day, the Court issued an internal briefing note, according to the appellant, reinforcing the perception of guilt.

 

The criticism levelled at the Court of Auditors was thus twofold: on the one hand, there would have been an active tortious behavior - the disclosure of information not yet known to the person concerned, in a context that suggested liability; on the other hand, an omission - the failure to activate an internal investigation to identify the source of the leak. The Court responded by first raising a plea of inadmissibility on grounds of procedural defect, holding that the claim for compensation could not be brought in the context of an action for annulment (Article 263 TFEU), but only through an autonomous action based on Articles 268 and 340 TFEU.

 

However, the same Court later recognized that, in principle, it is possible to cumulate claims for annulment and compensation within the same proceeding, provided certain formal requirements are met. In this case, however, it was held that the plaintiff had not adequately substantiated, from the outset, the grounds for the Union’s non-contractual liability.

 

On the merits of the case, the Court rejected allegations of infringement of the presumption of innocence and the principle of good administration, finding that the internal communication of July 11, 2018, was after the publication of the news by the press, which occurred as a result of a leak from an anonymous source.

 

However, this reconstruction raises several questions. The fact that the Court reacted with communications directed within the institution, even after the newspaper article came out, does not rule out the possibility that these communications contributed to consolidating a negative portrayal of the plaintiff. The strongest objection relates precisely to the principle of impartiality: even in the presence of a leak that cannot be attributed to the administration, the latter remains bound to prudent and neutral management of information, particularly when the person concerned has not yet been put in a position to formally know the acts that concern him or her. The principle of good administration requires not only transparency and timeliness, but also balance in communication, especially when it affects personal rights.

 

The Court also dismissed the failure to launch an internal inquiry, citing no obligation to do so. Yet, even without a binding rule, confidentiality and administrative accountability could justify such action. In a rule-of-law framework, institutional inaction can also entail liability. Furthermore, the Court rejected the claim for failing to establish wrongful conduct — the first condition for non-contractual liability — making examination of damage and causality unnecessary. Legally consistent, this outcome nonetheless raises doubts about the actual protection of fundamental rights and principles in EU administrative action.

 

 

4.              Concluding remarks 

 

The CQ v. Court of Auditors case is a significant test in assessing the effectiveness of judicial protection with respect to the protection of the Union’s financial interests. The case highlights a latent tension between two fundamental requirements: on the one hand, the need to respect the procedural guarantees of the person involved; on the other, the imperative to effectively protect the integrity of the EU budget.

 

In this delicate balance, the ruling ends up downplaying the proactive role and responsibility that institutions should assume in preventing and dealing with irregularities. The fact that CQ’s conduct resulted in a misuse of public funds that was not contested in substance, but only partially acknowledged for procedural reasons, raises questions about the level of diligence and control exercised by the European institution.

 

However, this case law cannot be viewed in isolation. On 28 April 2025, the Official Journal of the European Union published a summary of an action for annulment brought by the European Public Prosecutor’s Office (EPPO) before the Court of Justice (case T-99/25, lodged on 10 February 2025) pursuant to Article 263(4) TFEU. In that action, the EPPO challenges the decision adopted by the European Court of Auditors on 9 December 2024, denying the authorization to hear certain staff members as witnesses in an ongoing criminal investigation into alleged wrongdoing within the same institution. The investigation, launched at the end of 2022 following a report from the European Anti-Fraud Office (OLAF), concerns facts that potentially constitute offences affecting the financial interests of the Union.

 

According to the EPPO, the repeated refusal by the Court of Auditors to cooperate—first by denying access to its electronic archives, then by refusing to lift immunity and finally by preventing witnesses from testifying—has obstructed the investigation and hindered the EPPO’s ability to determine whether the allegations should lead to prosecution. Under the EU Staff Regulations, authorization from the institution is required for staff members to testify about matters known to them in the exercise of their duties. However, as clarified by the Court of Justice, such authorization may only be withheld in cases where the Union’s “interest of considerable importance and vital to the Union” is at stake. The EPPO argues that this condition clearly does not apply in the present case.

 

Taken together, these two cases—one dealing with individual financial responsibility, the other with institutional resistance to judicial cooperation—reveal a deeper tension within the EU legal and governance system: the challenge of ensuring both personal accountability and institutional transparency in the management and protection of EU public funds. On the one hand, the EU seeks to recover unduly paid amounts from former members of its institutions; on the other, it encounters systemic obstacles when a key institution refuses to cooperate with its own prosecutorial authority.

 

This duality exposes a structural concern. When an EU institution can, in effect, block a criminal investigation by withholding key testimonies, it undermines the very logic of interinstitutional checks and the role of the EPPO as an independent prosecutorial body. Such conduct raises fundamental questions about the coherence of the EU’s system for protecting the rule of law and financial integrity. More broadly, it calls into question whether the principle of sincere cooperation—enshrined in Article 13(2) TEU—is being fully respected when institutional interests are perceived to outweigh those of justice and public accountability.

 

In conclusion, the CQ v. Court of Auditors case and the EPPO’s appeal in T-99/25 highlight the growing need for a systematic reflection on how to ensure both individual and institutional accountability within the EU legal framework. At a time when the Union is managing unprecedented levels of public expenditure—particularly through instruments such as Next Generation EU—it is essential to ensure that mechanisms for oversight, enforcement, and judicial cooperation are not only available in theory, but fully operational and unobstructed in practice. A deeper and more critical exploration of these legal and institutional dynamics—across academia, jurisprudence, and policymaking—is not merely advisable: it is imperative. In a context where EU funds are increasingly significant and politically sensitive (i.e. Next Generation EU), opaque management by officials can undermine public trust and the effectiveness of the protection of the Union’s financial interests.