This week's edition of Euro Sleaze comes from Venice and the heart-breaking pictures of a beautiful city sinking under flood water.
The disaster is particularly shocking because we've all paid through our taxes for a flood defence project for the city that's partly funded by a £1.3 billion loan from the EU's European Investment Bank, or EIB.
The project, called MOSE, was supposed to have been completed five years ago but has been riddled with corruption, resulting in the arrests of 35 city officials and contractors.
A report just released by the European development and environmental coalition Counter Balance says: “Investments made by the EIB are wide open to abuse by fraudsters, money launderers and corrupt politicians.”
It adds: “Although on paper the EIB has procedures in place to reduce the risk of fraud and corruption, the bank’s policies are poorly policed and full of loopholes.
"In addition, under current EU law, the EIB is not even required to have anti-money laundering rules. Furthermore, when these rules are breached, the EIB’s internal rules cannot be challenged in courts because they are not enshrined in law.”
A telling chapter heading in the damning report is: “Will EIB financing to fraudulent Italian mega-projects ever stop?”
A residents' group called We Are Here Venice branded MOSE as “nothing but an irresistible opportunity for corruption and enrichment of businessmen and politicians.”
Another notorious example of the EIB squandering our money features a loan of 400 million euro - £342million - to Volkswagen.
The money was supposed to help research into reducing engine emissions, but VW used it to develop a “defeat device” to fraudulently fiddle emission figures, resulting in the Dieselgate scandal.
The European Ombudsman later ruled that the EIB was guilty of maladministration for keeping keeping secret an internal report into the shameful episode, despite “a very strong public interest in disclosure”.
"The case concerned serious misuse of 400 million euro of public funds and misrepresentations by a leading European company as to their purpose." the Ombudsman stated. "The public interest therefore in knowing the details of how such money was acquired and used was both obvious and significant."
The emissions scandal doesn't stop at Volkswagen - other European car-makers have also received EIB money, with questionable results. Counter Balance says: "The widening Dieselgate scandal raises questions about the overall due diligence performed by the EIB on its loans to the automotive sector over the past decade."
The EIB insists, somewhat implausibly given the evidence, that is has “zero tolerance of fraud, corruption and other prohibited conduct”.
