The study prepared by the European Court of Auditors shows the pathology of the allocation of European funds. Money flowed to amazing entities and it is not clear what it was spent on. No 1 wanted or could halt this pathology.
‘Transparency of EU backing granted to NGOs. Controlled EU backing in 2021–2023" is the title of the European Court of Auditors report, which exposes another pathology of the functioning of EU structures.
For respective days now, we have heard that the European Commission has wrongly spent any of the LIFE funds on unacceptable climate lobbying through NGO. It is worth noting that these funds were utilized by various law firms, e.g. in Krakow by Frank Bold Foundation for anti-smog initiatives and fighting opponents of alleged clean transport zones.
The Court, recalling the EU definition of NGO, points out that it is ‘a voluntary, government-independent non-profit organisation which is not a political organization or a trade union’. In EU countries, six countries have a different definition of NGO, and 21 countries do not have that definition at all, but the EC grants subsidies to NGO entities that are not even defined as NGO.
It may be presumed that this is simply a convenient way to circumvent lobbying rules that require lobbying organizations to lobby for the interests of their members or governments to registry as lobbying organizations. By impersonating the NGO, they can defraud EU subsidies for their activities. And they have no consequences.
According to the audit report, between 2021 and 2023 EU countries and the European Commission distributed a full of EUR 7.4 billion of EU funds to NGOs. The EC itself has distributed as much as 4.8 billion euro to 12 000 entities in the 2 years surveyed.
The EU Transparency registry contains little than 3.5 000 NGOs. Officially, little than 900 NGOs received EU grants from 2021 to 1923.
The Court found that:
– "EU backing data are inactive not correct or complete;
– NGO recognition and registration processes are inconsistent and unreliable;
– There is simply a deficiency of clear information on the EU-funded advocacy activities, including lobbying;
– Compliance with EU values is not verified proactively."
It was stressed that due to the deficiency of many data and the "lack of a credible review of EU spending on NGOs" an "effective analysis is difficult".
However, based only on "voluntary transparency of NGOs" and carrying out cross-checks, the audit squad established irregularities.
It has been pointed out that the issue of transparency of spending EU funds on the NGO is very important, as the Treaty on European Union points out, which "emphasises the importance of a transparent and continuous dialog with civilian society organisations with a sub-group of NGOs".
‘Public transparency is about providing citizens with the right information so that they can hold public decision-makers accountable. This means that gathering the transparency requirements includes cognition not only of who, why and for what intent EU funds have been allocated, but besides of how they have been used, what amounts they have related to and whether recipients of funds comply with EU values."
NGOs seeking EU funds must respect the values of "human dignity, freedom, democracy, equality, the regulation of law and human rights, including the rights of persons belonging to minorities, as the basis of the EU".
Respect for these EU values is simply a "agreed commitment" to the recipients of European funds, including NGOs.
Organisations receiving Union grants must comply with the transparency requirements. Data should be "complete, reliable, easy accessible, understandable and reusable information on how many EU funds have been allocated to NGOs, including through various NGOs and/or another entities in the case of sub-grants or consortia. ‘Why’ and ‘for what’. There should be a clear strategy for selecting organisations, explaining why the organisations afraid received grants, for what purpose, how these funds were spent (the compliance monitoring system) etc.
The European Court of Auditors stressed that, following the 2022 Qatargate scandal, the European Parliament adopted a resolution even in 2024 calling for greater transparency and accountability of EU funds granted to recipients, including NGOs. The EC besides adopted an update of the guidelines on this issue.
Despite the actions taken, there was no crucial improvement. Auditors pointed out that "EU funds granted to NGOs under interior policies were not sufficiently transparent". The EC "essentially" carried out verification of "key transparency requirements before granting EU funds to NGOs, but did not proactively check compliance with EU values".
‘The transparency of EU funds granted to NGOs is undermined by the deficiency of a credible review. We have observed that the Commission, its partners and associate State authorities have not always understood in the same way as NGO. List of NGOs in the Financial Transparency System... base self-certification’. In another words, it was adequate that the entity declared to be NGO, Even if it is He wasn't.
The Commission did not check "important aspects of the position of a non-governmental organisation, specified as the government's influence through its representatives in the governing bodies" and whether self-proclaimed NGOs did not prosecute the commercial interests of their members.
This approach contributes to the fact that any entities have incorrect classification of a non-governmental organisation in the Financial Transparency System. It was added that "the definition of a non-governmental organisation contained in the Financial Regulation of 2024 is not in itself adequate to resolve this problem due to the fact that any operational aspects stay open to interpretation".
It was so recommended to "improve the guidelines for the classification of NGOs". The NGO must be ‘independent of the government’ and the position of a non-governmental organisation that pursues the commercial interests of its members should be verified.
The auditors besides pointed out that associate States' authorities do not monitor or study EU backing to NGOs; since this information is not required by EU law, it is not easy available. On their websites, associate States' authorities only disclose to the public information about the amounts that have been distributed, but do not give to whom and how much.
This is to change and, as of 2028, "information on EU funds allocated to recipients, including NGOs, under shared management programmes is to be published on a centralised website, together with information on direct and indirect management modes". This fresh request would improve "the completeness of information on recipients of EU funds".
Currently, the full comparability of financial data from all management modes cannot be ensured, as there is no request to study payments received under shared management.
‘Overall, we found that there is no credible review of EU backing granted to NGOs. This information is published in a number of systems, websites and databases, resulting in a fragmented approach that hinders transparency and limits insight into the function of NGOs in shaping EU policies and implementing programmes. Moreover, on the basis of this information, it is hard to measure whether EU funds are overfocused on a tiny number of NGOs and whether specified concentration is in line with EU policy objectives", the study states.
It has so been recommended to improve the completeness of the data, their quality, the validity of the Financial Transparency strategy since 2029.
It has besides been recognised that the EC does not disclose to the public data on NGO's allocation of EU grants to lobbying, which organisations utilizing EU funds cannot do and what they do.
The EC besides "has not carried out a control of financial dependence and backing sources which can supply useful information on "who is behind the NGO concerned".
It was pointed out that the NGO itself "divided importantly in terms of transparency towards the public".
The auditors referred to an example of an entity qualified as a non-governmental organisation which benefited from Union grants and which could not be so qualified due to the commercial interests of its members. This entity is simply a investigation organisation that, in addition to investigation and innovation, provides advanced method services for the textile manufacture and comprehensive services for the cosmetic industry. It employs over 250 employees and has offices worldwide.
It is simply a private non-profit organization, but clearly pursues the commercial interests of its members, who are primarily profit-oriented, so it should not be considered a NGO.
The study says“We found that more than 90% (more than 70,000) of the entities to which payments were made in the accounting strategy between 2021 and 2023 were not classified as NGO or non-NGO due to the fact that the field was left empty (optional for recipients). We believe that this increases the hazard of incorrect categorisation of recipients for reporting purposes, which has a direct impact on the quality of the information available to the public through FTS.’
Cross-checking shows that 8 entities (more than 25% of the sample) were mislabelled as NGOs. 3 of these entities included government-dependent organisations specified as public-private partnerships or a national investigation institute. The 4th represented the commercial interests of its members which were not consistent with being NGO. 3 further beneficiaries did not consider themselves to be NGO and functioned as specified on the F&T website.’
Auditors describe pathological situations involving at least a government investigation institute, which functioned as NGO, conducted global investigation on energy and bioeconomy. It belongs to the largest investigation institutes in Europe and is registered as a private company non-profit with limited liability. In applying for a grant from the EU, the institute declared it NGO. However, this entity is closely linked to the government, the State has granted it a warrant to safeguard its financial capacity, and only representatives of the associate States' authorities sit in the highest management body.
The EC publishes the grant data with an yearly or longer delay. It besides turns out that, for example, it grants funds to certain organisations gathering certain criteria, and these separate them further to non-compliant entities. In any cases, only 10% of the amounts received by them were transferred to NGOs, while 90% went to another types of recipients.
The Commission shall besides make payments to implementing partners, who are not NGOs, a who can then transfer funds to NGOs. However, the Commission did not monitor the amounts thus transferred to NGOs.
Auditors who submitted an example to the control of the 3 grant partners regretted that each entity utilized different procedures to disclose information on their management of Union funding. It was about entities in Germany, Poland and Slovenia. Attention has been paid to the dissemination of information, which makes it hard and even impossible to audit due to the deficiency of a request to study in item what EU funds have been distributed by entities that have straight received backing for the distribution of grants between NGOs.
The auditors stressed that "some EU operating grants granted to NGOs may finance such actions, like lobbying’.
KE does not truly check who is behind the organization neither Whose business he represents. By impersonating NGOs, lobbyists can extort EU funds, i.e. taxpayers from EU countries, for climate, gender, etc. It's a convenient way of circumventing lobbying regulations.
The audit besides shows that only a tiny group are real NGOs, bottom-up and independent, and many organisations that claim to be independent, are entities sponsored by authorities and various trade groups.
It is worth noting that, for example, the EU funds are utilized by Frank Bold Foundation, which lobbys for clean transport zones and fights opponents of discriminatory zones in courts.
For example, between 2022 and 2024 the Foundation received EUR 95 000 of backing for the Active Citizen project. The Frank Bold Foundation is “part of the Frank Bold global legal squad (in Poland since 2012). Main nonsubjective Foundation is environmental protection implemented through actions for the energy transformation of Poland, as well as strengthening the legal competences of another NGOs and grassroots initiatives through environmental law training and legal support. Foundation monitor the state and application of environmental law, participate in administrative and judicial proceedings and make demands in the legislative process to strengthen environmental protection and extend the powers of NGOs. Foundation conducts air protection activities through precedent court proceedings, as well as workshops and training on anti-smog resolutions, providing legal advice and supporting legislative processes at local and national level. Only in 2021 she trained more than 2,000 officials, city guards and police officers in the field of air protection legislation. The Foundation's lawyers participate on the public side in proceedings concerning planned and existing lignite and hard coal mines and existing and planned fossil fuel-fired power plants. They contributed to the fact that the mines of Gubin, Złoczev, Paruszowiec or Imielin North would not be built and plans for the construction of the Ostrołęka C coal power plant were abandoned.’
It was pointed out that "thanks to the organisational grant, the Foundation will, among another things, prepare and implement a communication strategy and train staff in this area, set up an internship programme for lawyers curious in environmental protection law and proceed their activities".
The Foundation has, of course, received more EU grants. And who's behind it? Among another things, the Ministry of improvement and the Ministry of Justice of the Czech Republic, but besides the US embassies is Open Society Foundations.
Source: eca.europa.eu, frankbold.org
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