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EU health chief resigns in corruption scandal

BRUSSELS -- The European Union's health commissioner resigned Tuesday over corruption allegations involving tobacco laws but has denied any wrongdoing and has vowed to clear his name.

John Dalli, a former Maltese businessman, resigned after the EU's anti-fraud office found that he was aware of an attempt at corruption surrounding new legislation on the Swedish tobacco product known as snus.

Snus is a type of smokeless tobacco sold in loose form or in paper sachets that users stuff under their upper lip. Snus sales are banned in the EU, except in Sweden, which insisted on an exemption when it joined the EU.

The EU Commission said in a statement that Dalli had resigned immediately. It said the anti-fraud office `'did not find any conclusive evidence" of Dalli's direct involvement in a scheme to profit from his office but felt `'that he was aware of these events."

The Commission said Dalli `'categorically rejects these findings" but decided to resign to better defend the reputation of himself and the EU executive.

The EU's anti-fraud office sent a report to the Commission after it investigated a complaint by Swedish Match, a tobacco producer. The Commission said that a Maltese businessman had tried to use his alleged contacts with Dalli to get financial benefit from Swedish Match in return for pressing Dalli to influence future tobacco laws on snus.

`'Swedish Match takes this incident very seriously," the company said in a statement. `'The incident was promptly reported to the European Commission, and the report from the Anti-Fraud Office has confirmed that the notification was warranted."

OLAF claims that Dalli knew about the attempt at fraud. Its report now goes to the Attorney General of Malta.

A former Maltese finance and foreign minister, Dalli told Maltese TV from Brussels that he `'will fight the allegations being made" and that he had resigned to be able to defend his name.

In a statement to Maltese parliament Tuesday, Prime Minister Lawrence Gonzi said Malta will nominate a new commissioner "within reasonable time".

Twelve years ago, the whole EU Commission resigned after an investigative panel alleged cronyism and financial irregularities in their ranks.

`'Despite the efforts made in recent years to clean up, selling influence and personal connections may still be a feature of EU lobbying," said Jana Mittermaier, head of Transparency International's EU office. `'If that is the case, EU institutions need to take anti-corruption measures much more seriously."

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Stephen Calleja in Valletta, Malta, contributed to this report.

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