Unanswered Questions on the Fate of an Investigative Journalism Fund at the European Commission
One can debate whether journalists should accept government funding for investigative reporting. What is easier to agree on is that when governments move to fund the media, any such process should be transparent and open. Unfortunately, that does not appear to be the case in Brussels today. Our story begins with an introduction by Margo Smit, executive director of VVOJ, the Dutch-Flemish Association of Investigative Journalists, and a GIJN board member. Ms. Smit gives context to what follows — an extraordinary summary of events, prepared by Peter Rauschenberger, an advisor to Benedek Jávor, MEP (Member of the European Parliament — Editor’s Note.
When the Budgetary Control Committee of the European Parliament in late 2011 requested that I and a team of six other researchers report on the role of investigative journalism in fighting fraud and corruption within the EU, part of the goal was to show the impact journalism can have on upholding the rule of law in society. And when our report was presented to the Committee in October of 2012, the members once again underlined their position that Europe should do more than just support the watchdogs of journalism by word of mouth. For that was all the European Commission and Parliament so far had done. The EU should, literally, put its money where its mouth was, one member said to me, and find ways to (both financially and by for instance designing proper whistleblowing laws and source protection guidelines) support and safeguard investigative reporting without interfering with editorial independence.
Two years have passed since, more research was done but has not been published yet. Once again, it is up to the journalists to trace the story of what happened with the Commission’s grand plans for supporting investigative reporting, and with the money allocated for another study into what was already known. If this story about ourselves is in any way exemplary for how ‘Europe’ works, it is, once again perhaps, disenchanting! — Margo Smit.
On the Fate of a Proposed EU Fund for Investigative Journalism
Summary — In 2009 the European Parliament proposed to start a research grant scheme for investigative journalists who plan to investigate cases that affect at least two member states, or the EU as whole. EUR 1.5 million was allocated for this purpose in the EU’s 2010 budget. In 2010 a pilot project defaulted due to an unresolved administrative issue. Then, from 2012 on, the pilot project was turned into a preparatory action and an external consultant was hired for about a quarter of a million euros to figure out how the administrative problem could be solved. The feasibility study was drafted in 2013, yet the Commission felt it could not implement the program in 2014, because the necessary legislation would not go through, they said, due to administrative difficulties. So they didn’t do anything.
By Peter Rauschenberger, for The Global Investigative Journalism Network/THE Frontliner | Monday, November 17, 2014 |
Now the budget line is missing from the 2015 EU budget for yet another administrative reason: no legislation has been passed to carry the project on to the next phase, and it cannot be continued as a preparatory action, since there is a rule that says that no preparatory action can run for longer than three consecutive years. Quite a strange thing it is to say of a programme which never took off the ground that it has already run too long to be continued. The Commission also has kept saying for more than a year that the administration of the grant scheme would cost too much. They have made this claim on the ground of the feasibility study they ordered in 2012, and was delivered to them, apparently, in October 2013 at the latest, but which they still haven’t published. For administrative reasons, we suspect.
A brief outline of the course of events
In 2009 the European Parliament decided to include funding for a pilot project for a research grant scheme for cross-border investigative journalism in the European Union’s 2010 budget , with a budget line of 1.5 million euros. From the part of the Parliament the group of MEPs who pushed the initiative included Danish liberal MEP Anne E. Jensen , German green MEP Helga Trüpel, Belgian conservative MEP Ivo Belet, and their efforts were coordinated by Danish liberal MEP Morten Løkkegaard, rapporteur on the Parliament Resolution on journalism and new media .
An international expert team, including, among others, Fredrik Laurin and Nick Davies, was appointed in June 2010 to assist the Commission in implementing the project , and a call for proposals was launched in October 2010, but then called off later in the same year because of an administrative problem.  The Commission insisted to have access to the editorial content of the investigations proposed by the applicants, and also the identity of the applicants, prior to the selection of the grant winners. The journalists involved, including members of the expert group assisting the Commission, protested against it, emphasizing that the nature of investigative journalism requires that the investigations should be kept a secret up to the point of the publication of the results, for which reason they recommended an intermediary body to distribute the grants and insulate the Commission from the content of the proposed investigations.  The Commission, in turn, was worried that conformity with the requirements of the Financial Regulation could not be secured this way.
By this time the legislative procedure aiming at the revision of the Financial Regulation had already been initiated by the Commission. It was foreseeable that the new Financial Regulation (FR) and the accompanying new Rules of Application (RAP), to be adopted in 2012, will relax the budget implementation rules applicable to the externalization of implementing powers to third parties (like in the case of cascade funding), opening a way to solve the apparent conflict between editorial independence and confidentiality and conformity with the FR, along the lines suggested by the experts, i.e. involving an intermediary body. The need for relaxing these rules is mentioned among the reasons for revising the Financial Regulation in Commission memo “Why was it necessary the budgetary and spending rules in the Financial Regulation” of October 2012 , and that it was among the purposes of the reform is also clear from the new FR’s preamble .
After the failure of the first call for proposals, the pilot project was converted into a preparatory action from the financial year 2012, with the same amount of budget . The aim of the preparatory action was to solve the apparent conflict between confidentiality and financial responsibility, and establish a sound way to implement the grant scheme . The Commission’s Directorate-General for Communication contracted UK based consulting firm Technopolis Ltd., one of the Commission’s regular consultants, to draft the feasibility study for EUR 247,200 . The feasibility study was prepared in 2013.
In the meantime two EU-funded studies underlined the importance of new avenues of funding for investigative journalism. In 2012, on the initiative of the Parliament’s Budgetary Control Committee, the Commission’s Directorate-General for Internal Policies commissioned and published the study titled “Deterrence of fraud with EU funds through investigative journalism in EU-27” (Smit et al, 2012) . The study established that investigative journalism is a powerful tool to track down abuses of EU public money, and also that investigative journalism is a costly genre facing a serious shortage of funding in consequence of the recent restructuring of media markets. In January 2013 the so-called “High level group on media freedom and pluralism”, which was established in 2011 by the Commission to provide a set of recommendations for the protection and promotion of pluralism and freedom of media in Europe, published its report (Vike-Freiberga et al. 2013). Recommendation 14 of this report calls for, among other things, new forms of funding for investigative journalism .
The Commission started referencing the feasibility study in October 2013, justifying their reluctance to implement the preparatory action in 2014. In a “letter of executability” sent by the Commission to the Parliament prior to the adoption of the 2014 budget, they foresaw that they won’t be able to implement the preparatory action for two reasons. One was that they deemed it unlikely that, given the change of guards in both the Commission and the Parliament in 2014, the necessary legislative steps to set up the grant scheme could go through. The second was that according to “a draft study” the administrative overhead of the grant scheme would be way above what is normally considered acceptable. The Commission said the overhead was estimated at 33% . That would be half a million euros per year. Quite a fantastic figure for passing a decision on the few dozen to maybe a hundred applications that can be expected yearly from the investigative journalism community. And it would have been just fair to publish the study, if it really contains such a conclusion, to expose it to public scrutiny, before it is used to justify the abandonment of the programme.
The next development of the saga was that the budget line for the grant scheme was omitted from the 2015 EU budget. It was something of a Catch 22 situation: The project was not carried over to a next phase since the legislation required for that has not been passed. And it could not carry on as a preparatory action either, since Article 54(2)(b) of the Financial Regulation states that no preparatory action can run for more than three consecutive years . The latter, however, seems to be a contestable reason. The purpose of the rule is to limit the length of the trial period for new policies. But this programme had no trial period in any real sense of the word. It never took off the ground in the way the Parliament suggested.
The most active MEP promoting the project was Morten Løkkegaard. He pushed it forward when it came to a halt, tabled the necessary amendments every year to carry it on, and took the lead in keeping up public interest in the subject. With his term in the Parliament running out in May 2014, it could have been expected that pressure from the Parliament’s part on the Commission to implement the project would fade out. Newly elected Hungarian green MEP Benedek Jávor, however, decided to pick up the relay baton. With fellow green group member Helga Trüpel and with Dennis de Jong, Dutch member of the European United Left/Nordic Green Left group, he tabled an amendment to the 2015 draft budget to reinstate the budget line . The proposed amendment, however, was turned down, mostly because it came too late for Commission to assess it.
After that, Jávor tried to figure out whether the omission of the budget line for investigative journalism, which was there in the budget from 2010 on but never really used, was a result of a stand taken by the Commission on the subject, and if yes, whether it was possible to get hold of the feasibility study that, presumably, was used to substantiate the Commission’s position. Jávor wrote an email (on 16 October 2014) to the competent head of unit in DG COMM inquiring about these subjects . In return his office received a telephone call from the head of unit in question requesting Jávor to turn to the director-general himself. So he did (on 20 October 2014), and about ten days later the answer to Jávor’s questions arrived from Gregory Paulger, director-general of DG COMM . The answer reveals no position taken by the DG on the substance of the issue, i.e. the feasibility of the grant scheme for investigative journalism. Nor does it reveal any information about how the budget line was deleted, apart from the reference to the above-cited passage of the Financial Regulation preventing preparatory actions from running for more than three consecutive years. Access to the feasibility study was denied. Mr Paulger wrote that he would send a link to Mr Jávor once the study is published.
This is the current state of affairs. The European Parliament clearly expressed its wish to set up a support scheme for investigative journalism as early as the beginning of the previous term. After five years and hundreds of thousands of euros spent on preparation we have no budget for the grant scheme in the 2015 EU budget, and on the hard drive of the computer of some Commission officials there is an unpublished feasibility study. More than a year has passed since the Commission started referencing it. It was held back for some reason or another. Eventually, it will be published. As the consultant that prepared the study is contracted by the Commission on a regular basis , chances are that the findings of the version that will be published in the end will be the ones that Commission likes to see.
Relevant documents and reports on the project in chronological order
-  25 May 2009. Inception phase. Danish MEP Anne E. Jensen talks about her plans to propose the project, together with her German colleague Helga Trüpel, to Journalisten.dk (in Danish). http://journalisten.dk/vil-give-22-mio-kr-til-dybdeborende-journalistik-i-eu
-  12 March 2010. The European Union’s general budget for 2010 appears in the Official Journal. “Pilot project for European research grants for cross-border investigative journalism” is included in Chapter 16 02: Communication and the Media. See p. 953 and p. 955. Item 16 02 05 is included with the following remark:“This pilot project for European research grants for journalists is intended to facilitate and develop serious cross-border journalistic research at the EU level. Calls for tenders will be organised with a view of selecting common investigation projects involving journalists from at least two Member States, with a cross-border or European dimension resulting from a national, regional or local perspective. The results of the journalistic investigations selected will be published in at least all of the Member States involved.” http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2010:064:FULL Information on the EU budgets of recent financial years can be obtained here: http://ec.europa.eu/budget/biblio/documents/2010/2010_en.cfm
-  16 June 2010. The expert group assisting the Commission and drafting the terms of reference for the call for proposals to be launched in the pilot project registered in the Register of Commission Expert Groups.http://ec.europa.eu/transparency/regexpert/index.cfm?do=groupDetail.groupDetail&groupID=2480&NewSearch=1&NewSearch=1
-  2 July 2010. Parliament Resolution on journalism and new media – creating a public sphere in Europe welcomes the pilot project on research grants for cross-border investigative journalism and emphasizes that the independence of the members of the panel that will select the winning proposals is crucial.http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+REPORT+A7-2010-0223+0+DOC+XML+V0//EN&language=en
-  13 December 2010. A note is posted by the Commission on the cancellation of the call for proposals that was launched within the framework of the pilot project.http://ec.europa.eu/dgs/communication/contracts-and-grants/grants/years/2010_en.htm
-  20 December 2010. Brigitte Alfter reports to Journalismfund.eu on the failure of the call for proposals launched in the pilot project citing MEP Morten Løkkegaard explaining the causes. http://www.journalismfund.eu/news/%E2%82%AC-15-million-investigative-journalism-withdrawn-upon-struggle-about-editorial-independence
-  Commission memo ““Why was it necessary the budgetary and spending rules in the Financial Regulation” of October 2012: http://europa.eu/rapid/press-release_MEMO-12-795_en.htm
-  A synoptic presentation of the new Financial Regulation and its Rules of Application. Relevant passages include Preamble (21), (22), (23), (50), and (58) FR, Article 58 FR, [w. Article 35 RAP, Article 44 RAP], Article 60 FR [w. Article 38] RAP, Article 63 FR [w. Article 35 RAP], Article 64 FR, Article 137 FR [w. Articles 209-10 RAP].http://ec.europa.eu/smart-regulation/evaluation/docs/syn_pub_rf_mode_en.pdf For comparison, a link to the old FR:http://ec.europa.eu/budget/biblio/documents/regulations/regulations_en.cfm?archive=1 For a document that demonstrates that the new FR was already being prepared in 2010 see: http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52010SC0639&rid=6
-  2 February 2012. The European Union’s general budget for 2012 appears in the Official Journal. “Preparatory action – European research grants for cross-border investigative journalism”, included in the budget for the first time, is item 16 02 06 in it. The preparatory action appears in the budget with the same remark the pilot project did two years earlier (only of course “preparatory action” is substituted for “pilot project”). A note on the feasibility study is added though: “For this purpose, a feasibility study will be set-up in order to find new ways to launch this project. The study must look at ways in which independent, critical journalism can be funded by the EU, while ensuring the independence of information.” http://eur-lex.europa.eu/resource.html?uri=cellar:e648e711-9e69-4a8e-937c-e6b55791cf11.0009.02/DOC_2&format=PDF The Penguin Companion to European Union explains the legal concept of pilot projects and preparatory actions:http://penguincompaniontoeu.com/additional_entries/pilot-projects-and-preparatory-actions/
-  March 2012. The Commission comments on the implementation of the preparatory action, including a reference to the feasibility study in the “First Commission interim report on the implementation of pilot projects and preparatory actions 2012.”http://www.europarl.europa.eu/meetdocs/2009_2014/documents/budg/dv/2013_com_first_interim_report_/2013_com_first_interim_report_en.pdf
-  Commitments received from the European Commission by Technopolis Ltd. listed by OpenInterest.eu: http://openinterests.eu/entities/E0oGr0kLiW5mM8s-technopolis-ltd?fts_committment_in_offset=0#fts_committment_in Details of the specific commitment received in 2012 here:http://openinterests.eu/relations/o6BQZdaVKzJvju2
-  15 August 2012. The study on investigative journalism requested by the European Parliament’s Committee on Budgetary Control by Margo Smit et al., titled “Deterrence of fraud with EU funds through investigative journalism in EU-27” is published.http://www.europarl.europa.eu/document/activities/cont/201210/20121002ATT52809/20121002ATT52809EN.pdf
-  January 2013. The report of the Commission-established “High level group on media freedom and pluralism” chaired by Professor Vaira Vike-Freiberga, former president of Latvia, is published. Recommendation 14 of the report includes that “An additional study should be commissioned on possible new forms of funding for quality and investigative journalism, including making use of new technologies such as crowdfunding.”http://ec.europa.eu/information_society/media_taskforce/doc/pluralism/hlg/hlg_final_report.pdf
-  25 October 2013. The Commission expresses its doubts concerning the executability of the preparatory action if it is continued in 2014 in a “letter of executability” sent form the Commission to the Parliament: “There is a clear risk that the administrative and technical overhead cost for the action would exceed what is considered sound financial management. 20% of direct costs of an operation are normally considered to be the maximum acceptable overhead (re e.g. ESF Regulation (Article 11.3(b) of Regulation (EC) No 1081/2006)). The draft study financed under the 2012 Preparatory Action states that an appropriate scheme would necessarily have 33% overhead costs due to the allocation of numerous relatively small grants through an external intermediary organization to be entrusted with securing journalistic freedom as well as the administration of the scheme. In addition, the EP Conference of Committee Chairs has requested the Commission not to submit any new legislative proposals for the remainder of this legislature. Moreover, while it would be theoretically feasible to adopt a basic act either in co-decision procedure or consent procedure (unanimity if based on TFEU article 352) before 31.12.2014, it hardly seems feasible in a year when a new Parliament will be elected in May and the Commission will be in “caretaker mode” as of spring 2014 (before the new Commission takes up office in November). The Commission considers that such circumstances affect the sustainability of the action.” The executability letter cannot be found online, but the Commission cites it in the “First Commission interim report on the implementation of pilot projects and preparatory actions 2014”:http://www.europarl.europa.eu/meetdocs/2009_2014/documents/imco/dv/comreportbudget_/comreportbudget_en.pdf
-  29 September 2014. MEPs Benedek Jávor, Helga Trüpel, and Dennis de Jong table an amendment to the 2015 budget to reinstate the budget line for the project. It is Draft amendment 4121 (on pp. 100-1) in the document titled “The Parliament’s position: Amendments submitted to the meeting of the Committee on Budgets of 29-30 September and 1 October 2014″: http://www.europarl.europa.eu/meetdocs/2014_2019/documents/budg/dv/budg2015_doc4_txt_3_/budg2015_doc4_txt_3_en.pdf
-  MEP Benedek Jávor inquires about the Commission’s position on the grant scheme for investigative journalism, and the reasons for its omission from the 2015 budget, including those that are perhaps based on the content of the “draft study” repeatedly referenced by the Commission. The email sent to the competent Head of Unit in DG COMM reads as follows. “Dear Mr Cattoir, I am interested in the fate of the grant scheme for cross-border investigative journalism, which has been planned for several years, but which failed to materialize. I am aware that the Commission has expressed, on multiple occasions, reservations concerning the feasibility of the project. The Commission’s pessimistic opinion on the feasibility of the grant scheme, as it was expressed e.g. in the First Commission interim report on the implementation of pilot projects and preparatory actions 2014 (http://www.europarl.europa.eu/meetdocs/2009_2014/documents/imco/dv/comreportbudget_/comreportbudget_en.pdf) is based on “a draft study financed under the 2012 Preparatory Action”. The interim report specifically cites from this study a rather pessimistic prediction on the administrative overhead of the grant scheme, which the Commission used as a justification for not implementing the 2014 preparatory action. I have found that DG COMM indeed contracted the Technopolis Group, UK, to prepare a feasibility study for the proposed grant scheme in 2012 (http://openinterests.eu/relations/o6BQZdaVKzJvju2). I also realize that after several years and several hundreds of thousands of Euros spent on preparation, the budget line serving the grant scheme has been deleted from the 2015 budget. I suppose that this decision was made on the ground of the Commission’s negative opinion. Could you please confirm this? If I may, I would also like to ask you to send me an electronic copy of the feasibility study that served as ground for that negative opinion, as well as any other documents you might judge relevant for the understanding of the state of play. Many thanks for your cooperation. Best wishes, Benedek Jávor, MEP”
-  31 October 2013. Director-General Gregory Paulger of DG COMM responds to Jávor’s inquiry. The answer reads as follows. “Dear Mr Jávor, Thank you for your above referenced letter. The feasibility study on European research grants for cross-border investigative journalism to which you refer is the result of the Commission implementing an amendment on a preparatory action tabled in the 2012 budget. This amendment originated in the CULT Committee of the European Parliament. A second amendment was adopted in the 2013 budget to extend the preparatory action. However, the Budgetary Authority, after having obtained the agreement of the then CULT ‘rapporteur’ for the budget, MEP M. Løkkegaard decided to transfer most of the earmarked amounts to another preparatory action, in order to achieve optimal budget execution in 2013. A small amount for the expert meetings needed in the context of the feasibility study was kept on the original line. Subsequently, Mr Løkkegaard tabled a third amendment in the draft 2014 budget. The Commission made it clear, before the adoption of the 2014 budget, that it did not consider that it would be able to implement the action as described. The reasons for this were set out in the third annex of the so-called ‘executability letter’ sent by Commissioner Lewandowski as Commissioner responsible for Budgets to the then Chair of the European Parliament’s Committee for Budgets on 25.10.2013. I enclose the relevant annex for ease of reference. [Cited above.] Article 54 (2)(b) of the Financial Regulation states that preparatory actions can be carried out for a maximum of three consecutive years. The European Parliament has not tabled an amendment on this subject in the 2015 draft budget so, indeed, there will be no corresponding budget line. Of course, I will send you the appropriate links to the study as soon as it is published. Yours sincerely, Gregory Paulger”
This summary was prepared by Peter Rauschenberger, an adviser to MEP Benedek Jávor on anti-corruption and transparency issues. It is republished from Atlatzo.hu.