Listen on * Spotify * Apple Music * Amazon Music Brussels was jolted this week by dawn raids and an alleged fraud probe involving current and former senior EU diplomats. Host Sarah Wheaton speaks with Zoya Sheftalovich — a longtime Brussels Playbook editor who has just returned from Australia to begin her new role as POLITICO’s chief EU correspondent — and with Max Griera, our European Parliament reporter, to unpack what we know so far, what’s at stake for Ursula von der Leyen, and where the investigation may head next. Then, with Zoya staying in the studio, we’re joined by Senior Climate Correspondent Karl Mathiesen, Trade and Competition Editor Doug Busvine and Defense Editor Jan Cienski to take stock of the Commission’s first year — marked by this very bumpy week. We look at competitiveness, climate, defense and the fast-shifting global landscape — and our panel delivers its score for von der Leyen’s team.

BRUSSELS — Ursula von der Leyen is separating herself from the corruption allegations engulfing the EU’s diplomatic service, with staffers saying it is a non-issue for the Commission chief. After Belgian authorities conducted dawn raids on Tuesday and detained the EU’s former top diplomat Federica Mogherini and ex-European External Action Service Secretary-General Stefano Sannino, Commission officials dismissed it as an EEAS problem — noting that while Sannino took on a top job at the Commission earlier this year, the probe dates back to his previous role. “It’s not the Commission distancing itself, it’s a different institution that’s being investigated,” an EU official said. Helpfully for von der Leyen, Sannino fell on his sword Wednesday, with the Commission announcing he was gone from the helm of its Middle East, North Africa and the Gulf department (DG MENA). Three Commission officials forcefully argued the investigation launched Tuesday — into allegations the EEAS fraudulently awarded a tender to run a training academy for future EU diplomats to the College of Europe in Bruges — had nothing to do with von der Leyen, given the diplomatic service is a separate institution from the Commission. An EU official characterized attacks on the Commission chief as unfair and unwise, coming at a sensitive time when von der Leyen is attempting to shore up support for Ukraine ahead of a crunch December summit of EU leaders. The events take place against the backdrop of tensions between von der Leyen and the current boss of the EEAS, Kaja Kallas. Kallas, who was not in office at the time of the alleged corruption, has also sought to distance herself from the probe. On Wednesday, the former Estonian prime minister sought to drive home the idea that she had been working to clean up the EEAS since her appointment as the EU’s high representative in December 2024. In a letter to EEAS staff seen by POLITICO, the top EU diplomat wrote that she found the allegations against Mogherini and Sannino “deeply shocking,” but that these had predated her time at the EEAS. In the months since then, her team had launched internal reforms including setting up an “Anti-Fraud Strategy” and building stronger cooperation with the EU’s anti-fraud agency, OLAF, and the EPPO, she said. But at issue is who knew what in relation to the claims against Sannino. According to four EEAS employees, speaking to POLITICO in interviews prior to Tuesday’s raids, wider questions were raised about the way Sannino handled appointments for coveted diplomatic posts during his time at the service, including allegations that he had awarded them to favorites. Officials from OLAF visited the secretary-general’s offices prior to his departure from the EEAS, according to two people familiar with the matter. Kaja Kallas, who was not in office at the time of the alleged corruption, has also sought to distance herself from the probe. | Dursun Aydemir/Getty Images But an EU official said the Commission was not aware of prior complaints about Sannino when he was hired to be the head of a new department covering the Middle East and North Africa. In its statement announcing Tuesday’s raids, the EPPO said it had requested that authorities lift the immunity ― typically given to diplomats, protecting them from legal action ― of “several suspects” prior to the probe, and that this was granted. It did not specify which bodies it had made the requests to. The EU official mentioned above said the EPPO had directed a request to lift Sannino’s immunity to the EEAS in September, and that the Commission had not been made aware of it. An EEAS official did not respond directly to a question about whether such a request had been received. The official said the EEAS would have followed the law in such circumstances. The allegations are not proven and Mogherini, Sannino and the other individual who was detained are presumed innocent until deemed guilty by a court. Sannino did not immediately respond to a request for comment via his European Commission office. Tuesday’s events could also aggravate tensions between EU politicians and Belgian authorities. Two officials questioned the quality of the Belgian justice system, noting that authorities had held flashy press conference and detained suspects but then failed to advance cases in the 2022 “Qatargate” scandal and this year’s bribery probe into Chinese tech giant Huawei’s lobbying activities.

BRUSSELS ― Belgian police raided the EU’s foreign service and the College of Europe on Tuesday in a bombshell corruption probe — and detained two of the EU’s most powerful officials. Federica Mogherini, who once served as the EU’s top diplomat, and Stefano Sannino, a director-general in the European Commission, were questioned over allegations of fraud in the establishment of a training academy for diplomats. Mogherini was born in Rome, the daughter of a film set designer. She was elected to the Italian parliament in 2008 as an MP with the center-left Democratic Party and became Italy’s foreign minister in 2014, an appointment that, at the time, took many by surprise. The 52-year-old’s tenure was short-lived, as she was made the EU’s high representative — the foreign policy chief — the same year, a position she held until 2019. Her time in the job is perhaps most notable for her work on the 2015 Iran nuclear deal. At the end of her five-year term, she became the rector of the Bruges-based College of Europe, a position she’s been in ever since. But her appointment was mired in claims of cronyism, as professors and EU officials argued that she was not qualified for the post, did not meet the criteria and applied after the deadline. She has also served as the director of the EU Diplomatic Academy, a program for junior diplomats across EU countries that is run by the College of Europe, since August 2022. It’s the academy that is at the center of the probe. The European Public Prosecutor’s Office (EPPO) said it has “strong suspicions” that rules around “fair competition” were breached when the EEAS awarded the tender to set up the academy. Sannino, a career diplomat from Naples with a packed CV including various roles in Rome and Brussels, has served as director-general of DG Enlargement, permanent representative of Italy to the EU, Italian ambassador to Spain and Andorra and secretary-general of the European External Action Service (EEAS). He has championed LGBTQ+ rights and is married to Catalan political adviser Santiago Mondragón. He started his current role as director-general of DG MENA, the EU’s department for the Middle East, North Africa and the Gulf, in February. He has lectured at the College of Europe and at the diplomatic academy. None of the people questioned has been charged. An investigative judge has 48 hours to decide on further action.

BRUSSELS — Platforms including Meta and TikTok will be held liable for financial fraud for the first time under new rules agreed by EU lawmakers in the early hours of Thursday. The Parliament and Council agreed on the package of rules after eight hours of negotiations to strengthen safeguards against payment fraud. The deal adds another layer of EU regulatory risk for U.S. tech giants, which have lobbied the White House to confront Brussels’ anti-monopoly and content moderation rules. “This is a big win. A big, big step forward. We are coming from a reality where platforms are not liable under any law,” Morten Løkkegaard, the Danish Renew MEP who shepherded part of the package through Parliament, told POLITICO. “It is a historical moment.” Social media has become rife with financial scams, and MEPs pushed hard to hold both Big Tech and banks liable during legislative negotiations. EU governments, meanwhile, believed banks should be held responsible if their safeguards aren’t strong enough. As a compromise, lawmakers agreed that banks should reimburse victims if a scammer, impersonating the bank, swindles them out of their money, or if payments are processed without consent. But social media companies will have to compensate banks if it’s clear that they failed to remove an online scam that had been reported. Some MEPs had called for more amid concerns that EU consumer safeguards on social platforms have proven insufficient. “Especially, as AI and social-engineering fuel an unprecedented rise in scams,” said Lithuanian Greens lawmaker Virginijus Sinkevičius. The new rules build on the EU’s Digital Services Act and the Digital Markets Act, which respectively limit the spread of illegal content and prevent large online platforms, such as Google, Amazon and Meta, from overextending their online empires. Breaching the DSA and DMA can come with huge fines, triggering pushback from the tech sector and U.S. President Donald Trump, who has accused the EU of discriminating against American companies. U.S. Secretary of Commerce Howard Lutnick has threatened to keep 50 percent tariffs on European exports of steel and aluminum unless the EU loosens its digital rules. Thursday’s deal triggered immediate criticism from the tech industry. “This convoluted framework undermines simplification efforts and conflicts with the Digital Services Act’s ban on general monitoring — ignoring multiple studies warning it will be counterproductive,” said CCIA Europe Policy Manager Leonardo Veneziani, whose trade body represents Amazon, Google, Meta and Apple. “Instead of protecting consumers, today’s outcome sets a dangerous precedent and shifts responsibility away from those best placed to prevent fraud,” he said.

ATHENS — Greek authorities made dozens of arrests on Wednesday related to Greece’s spiraling farm fraud case, in an investigation led by European prosecutors. Some 37 people suspected of being members of an organized criminal group involved in large-scale agricultural funding fraud and money laundering activities were arrested, and searches were carried out throughout the country, according to a statement by the European Public Prosecutor’s Office. In a snowballing scandal, the EPPO is pursuing dozens of cases in which Greeks allegedly received agricultural funds from the European Union for pastureland they did not own or lease, or for agricultural work they did not perform, depriving legitimate farmers of the funds they deserved. POLITICO first reported on the scheme in February. Several ministers and deputy ministers have resigned over their alleged involvement in the scandal. The EU has already fined Athens €400 million after finding evidence of systemic failings in the handling of farm subsidies from 2016 through to 2023. Greece also risks losing its EU farm subsidies unless it provides an improved action plan on how it will stop funds being siphoned off into corruption. The original deadline was Oct. 2, but this has now been pushed back to Nov. 4. “The Commission is awaiting the submission of the revised action plan and in the meantime, it continues to be in contact with the Greek authorities,” a European Commission spokesperson told POLITICO earlier this month. Wednesday’s operation centered on a criminal network accused of illegally obtaining EU farm subsidies through false declarations submitted to the organization in charge of distributing EU farm funds in Greece, OPEKEPE. According to the EPPO, in the course of the preliminary investigation, 324 individuals were identified as subsidy recipients, causing an estimated cost of more than €19.6 million to the EU budget. Of these, 42 are believed to be involved in this case and are considered current members of the criminal group, says the EPPO. Most of them appear to have no actual connection to farming or producing, according to the Greek and EU authorities. The EPPO said that, at least since 2018, the group “allegedly exploited procedural gaps” in the submission of applications using falsified or misleading documents to claim agricultural subsidies from OPEKEPE. They are suspected of fraudulently declaring pastureland that did not belong to them or did not meet eligibility criteria. They allegedly inflated livestock numbers to increase their subsidy entitlements. To conceal the illicit origin of the proceeds, they are believed to have issued fictitious invoices, routed the funds through multiple bank accounts, and mixed them with legitimate income. Part of the misappropriated money was allegedly spent on luxury goods, travel and vehicles, to disguise the funds as lawful assets. Greece’s anti-money laundering authority is investigating Giorgos Xylouris, a farmer from Crete and until recently member of ruling New Democracy. Xylouris is one of the key characters mentioned in EPPO case files, under the nickname Frappé (“Iced Coffee”), regarding the OPEKEPE scandal. Some €2.5 million was discovered in his bank accounts during a random inspection, the Greek officials said. Authorities found that Xylouris had failed to submit the required financial documentation and could not justify the large sum. Eight vehicles were also identified in his possession, including a Jaguar luxury car. The case file has been sent to the prosecutors to examine possible violations of anti-bribery laws and an investigation is ongoing regarding whether money laundering has occurred.

ATHENS — European prosecutors announced Monday charges against six people for their alleged involvement in criminal networks that flood the EU with fraudulently imported Chinese goods. The European Public Prosecutor’s Office (EPPO) seized 2,435 shipping containers at the Port of Piraeus, Greece’s largest, which is majority-owned by Chinese state-owned enterprise COSCO. The containers were primarily filled with e-bikes, textiles and footwear. It was the largest seizure of containers in the EU in history. The scheme to circumvent the payment of anti-dumping duties applicable to imports from China had been ongoing for at least eight years, resulting in an estimated loss of €350 million in customs duties and a further €450 million in VAT, depriving both national and EU budgets, according to the EPPO. Two customs officers have been charged by European prosecutors in Athens with repeated false certification, causing unlawful gains and damaging the EU budget by abetting customs fraud. Four customs brokers have been charged with repeated customs fraud and inciting false certification. The EPPO-led investigation, named “Calypso,” targeted criminal networks managing the entire circuit of goods imported from China into the EU, including distribution across member countries while evading customs duties and committing large-scale VAT fraud. The investigation involved textiles, shoes, e-scooters, e-bikes and other goods imported from China. The proceeds were laundered and sent back to China. “These highly organized criminal networks have specialized in this kind of fraud for years,” said European Chief Prosecutor Laura Codruța Kövesi in a statement. “Operation Calypso sends these criminals a clear message: the rules have changed and there are no more safe havens. Now, we must transform this spectacular success into systematic work. We require dedicated and specialized police, customs, and tax investigators throughout the entire EPPO zone,” Kövesi added. These networks — mainly controlled by Chinese nationals, according to EPPO — are also involved in money-laundering and sending the profits back to China. The seized containers are currently being inspected. So far, Greek authorities have only opened a limited number — but the contents of the containers are estimated to be worth €250 million. EPPO said that opening and analyzing the goods represents an unprecedented workload for Piraeus customs officials, as well as a safety risk. At least 500 of the containers are filled with e-bikes. Of those, 360 had not yet been declared to customs. However, based on the known modus operandi of the criminal organizations, prosecutors assume they would have been mis-declared and undervalued in order to get around anti-dumping duties applicable to Chinese imports. On average, based on the early stages of the investigation, only 10-15 percent of the e-bikes in a container were declared. Conservatively, the damage to the EU budget from these e-bikes alone is estimated at €25 million in unpaid customs duties and €12.5 million in VAT losses.

Water into wine? How about turning rubles into dollars. A Moscow court heard that Hans Tabi Takang, a Cameroonian conjurer who has lived in Russia for 12 years, swindled his victims of around two million rubles (around €20,000), the state-owned Kommersant outlet reported. In one case, the self-proclaimed magician deceived a woman whom he had convinced he could turn paper or rubles into U.S. dollars via a “special ritual.” “To turn paper into money, you take a 5,000-ruble note, wash it with a special powder mixed with water, then use that liquid to spray the cash inside a suitcase, wrap the money in foil for some time, and after these steps, the bills are supposed to turn into $100 notes,” the woman said Tabi Takang told her. After the woman handed over 500,000 rubles to Tabi Takang, the mendacious magic man took off with the money. According to Kommersant, Tabi Takang said he understood the charges and admitted his guilt. In a second case, Tabi Takang claimed he would collect special pieces of paper sent by his mother from Cameroon, which he would transform into dollars after a “witchcraft ritual.” The Russian ruble has been on a rollercoaster ride following sweeping economic sanctions enacted by the West after Russia launched its full-scale invasion of Ukraine in February 2022. However, the ruble has recently become the world’s top-performing currency, according to Bank of America, owing to U.S. President Donald Trump’s trade war and its impact on the dollar, along with the Russian central bank’s high interest rates and strict capital controls.

The European Union’s General Court ruled Wednesday in favor of former MEP Eva Kaili, annulling the European Parliament’s decision to block her access to documents about suspected misuse of parliamentary assistant allowances. Kaili — also a key suspect in the EU’s long-running Qatargate corruption scandal — had requested the documents under the EU’s transparency regulation, but in July 2023 the Parliament rejected her request citing concerns that the disclosure would interfere with ongoing legal proceedings. According to the General Court, the European Parliament wrongly applied an EU transparency rule to withhold documents, and rejected the institution’s arguments that releasing them would harm a related court case or violate legal fairness. “The requested documents … were not drawn up for the purposes of the proceedings … and do not contain internal positions of the Parliament relating to that case file,” the Court said. The court explained that the subject matter of the document Kaili requested is different from the subject matter of the case against her. “In those circumstances, access to the requested documents cannot be refused on the ground of the protection of court proceedings,” it said. Kaili, 46, served as a Greek MEP from 2014 and as Parliament vice president from January 2022 until December 2022, when she was arrested on preliminary charges of corruption, money laundering, and participation in a criminal organization as part of the Qatargate investigation into influence operations by foreign nations in Brussels. Days after her arrest, the European Public Prosecutor’s Office (EPPO) requested the lifting of her parliamentary immunity, based on a report from the the EU’s anti-fraud office (OLAF) relating to “suspicion of fraud detrimental to the EU budget,” over alleged irregularities in assistants’ salaries. In February 2023, Kaili appealed the immunity request. Her lawyer Spyros Pappas called the prosecutor’s action “unjustified,” arguing that the investigation had already been completed by OLAF and involved “facts dating back to past years.” In February last year, the European Parliament unanimously lifted Kaili’s immunity to allow the EPPO/OLAF prosecution to proceed.

The Justice Department on Monday announced the seizure of hundreds of financial accounts, fraudulent websites and laptops linked to a massive scheme by North Korean operatives posing as remote workers to infiltrate top tech companies and funnel money back to Pyongyang’s weapons program. The major government crackdown follows recent findings by cybersecurity experts revealing that several Fortune 500 firms were impacted by the intricate plot, which involves North Korean operatives using stolen identities and sophisticated AI tools to sail through the interview and hiring process. The cyber operation has grown more prolific as remote work in the U.S. has exploded, particularly in response to the Covid-19 pandemic. According to the DOJ, around 100 U.S. companies have unknowingly hired workers tied to the North Korean regime, who have also used their access to company systems to steal U.S. intellectual property and virtual currency. One company targeted was an unnamed California-based defense contractor that worked on artificial intelligence-powered equipment. Some of its technical data and files were compromised and sent abroad. “Any government contracting company utilizing remote work could be a potential victim in the future,” said an FBI official, granted anonymity as a condition of speaking to reporters ahead of the announcement. These North Korean agents are often aided by individuals running so-called laptop farms across the U.S. According to the DOJ, 29 known or suspected laptop farms across 16 states were searched. Around 200 laptops were seized by the FBI, along with dozens of financial accounts and fraudulent websites used to launder money. Individuals from the U.S., China, United Arab Emirates and Taiwan, helped North Korean agents successfully embed themselves inside U.S. companies, the press release states. U.S. national Zhenxing Wang was arrested and indicted for his involvement in a multiyear plot that allowed overseas operatives to obtain remote IT work with U.S. companies, generating more than $5 million in revenue. The scheme involved stealing the identities of around 80 U.S. citizens. “North Korean IT workers defraud American companies and steal the identities of private citizens, all in support of the North Korean regime,” Assistant Director Brett Leatherman of the FBI’s Cyber Division said in a statement. “Let the actions announced today serve as a warning: if you host laptop farms for the benefit of North Korean actors, law enforcement will be waiting for you.” In addition, four North Korean nationals were separately indicted for allegedly stealing $900,000 in virtual currencies from two unnamed companies based in Georgia. The DOJ has previously taken action against these schemes, including arresting multiple U.S. nationals running the laptop farms over the past year. One American woman pleaded guilty in February to hosting a laptop farm from her home, which allowed overseas IT workers to receive more than $17.1 million for their work. The State Department continues to offer a $5 million reward for information that could disrupt North Korean financial and other illicit activities.

ATHENS — Greece’s center-right New Democracy government announced Cabinet changes on Saturday following a wave of resignations in a massive scheme to defraud the EU’s farm budget. Thanos Plevris, a hardline MP with the nationalist Laos party, was appointed migration minister. He succeeds Makis Voridis, the highest profile official to resign on Friday after the European prosecutor implicated Greek ministers in the multimillion-euro scam involving EU agricultural funds. Other changes in the government of Greek Prime Minister Kyriakos Mitsotakis include the appointments of Haris Theocharis as deputy foreign minister; Yiannis Andrianos as deputy minister for rural development and food; and Christos Dermentzopoulos as deputy minister of digital governance. Opposition parties were quick to criticize the appointment of Plevris. “The far-right line of Mitsotakis continues unabated with the choice of Thanos Plevris, an inhumane, dead-end and frightening line overall for the refugee issue and the image of the country,” the Syriza party said in a statement. The New Left party called his appointment “a message of hatred, racism, authoritarianism.” In a statement, the party recalled comments by Plevris in the past that “border security cannot exist if there are no casualties and, to be clear, if there are no deaths.” The European Public Prosecutor’s Office (EPPO) is pursuing dozens of cases in which Greeks received EU agricultural funds for pastureland they did not own or lease, or for agricultural work they did not perform, thereby depriving legitimate farmers of the funds they deserved. The fraud was the subject of a POLITICO investigation earlier this year. The hefty case file was referred to the Greek parliament as it included information regarding the alleged involvement “in criminal offenses” of two former ministers overseeing the rural development and food portfolio. According to Greek law, only the national parliament has the authority to investigate and prosecute current or former members of the Greek government. This means that, despite its broad mandate to investigate the misuse of EU funds, the EPPO lacks the power to pursue such cases in Greece. The agency has called this a violation of its founding EU regulation. Earlier Saturday, two more New Democracy officials stepped down after their names appeared in the case file. Andreas Karasarinis, secretary of the ruling party’s agricultural organizations, and Yiannis Troullinos, a member of its political committee, submitted their resignations.