Mark Rutte testifies in childcare benefits scandal hearing

Caretaker Prime Minister Mark Rutte was questioned on Thursday in a public hearing with the parliamentary inquiry committee regarding the Dutch governement's anti-fraud measures over the past 30 years. The inquiry was prompted by the childcare benefits scandal that led to the fall of Rutte's third Cabinet in January 2021.

The scandal saw thousands of parents wind up in dire financial situations after the Belastingdienst cut them off from their childcare subsidies, and ordered them to repay all the money they received in prior years in one lump sum, sometimes tens of thousands of euros. A parliamentary committee tasked with investigating the abuses found that parents faced unprecedented injustice, and the third Cabinet of Prime Minister Mark Rutte collapsed.

Mark Rutte appeared before the committee for the first time on Thursday to answer questions about his role in the scandal as former State Secretary for Social Affairs and Employment Opportunity between 2002 and 2004. He will be called in again later to testify on his role in these matters as Prime Minister.

Rutte stated during the hearing that it was "logical" for the first and second Balkenende cabinets to tighten fraud prevention measures surrounding benefit claims. This was almost twenty years ago. At that time, he served as the State Secretary for Social Affairs and was responsible for fraud prevention strategies.

Under the leadership of CDA Prime Minister Jan Peter Balkenende, the Cabinet implemented various measures to combat fraud. From that period, enforcement became “smarter, wider, and more" comprehensive. A “risk-driven" fraud policy was developed, which meant that individuals were specifically scrutinized based on characteristics thought to increase the risk of fraud.

This approach would later play a significant role in the childcare benefits scandal, where victims were harshly dealt with by the Belastingdienst, partly based on their background. Dual-nationality was one of the criteria used to identify potential fraudsters, as was ethnic profiling.

Looking back, Rutte described these as "logical steps." The former State Secretary emphasized that when he assumed office, there were many investigations into fraud already in progress. The indicators were partly "anecdotal" but also "serious". Furthermore, he noted that the previous administration, the second Kok cabinet, had already begun tightening fraud control measures. ​"I picked up what was already there," Rutte said.

According to Rutte, there were no investigations into the potential downsides of a risk-driven approach to fraud detection at that time. He also saw no reason to commission further research into this before the approach was widely implemented. "As far as I remember, it was obvious," he said.

Fraud signs among Somali Dutch citizens triggered Rutte's call for investigation in 2004

When he asked municipalities as State Secretary for Social Affairs to specifically investigate Somali Dutch citizens, he received such "massive signals" of fraud that he felt compelled to act. He deemed it "unthinkable" not to intervene.

The inspection team reported a potential "pattern of fraud" among Somalis based on information from the United Kingdom. It was alleged that they were moving to the UK without deregistering, thus illegally receiving benefits in two places. "Once your municipality identifies Somali households receiving welfare benefits, I advise you to conduct further investigation, focusing on identity, housing and living situations," Rutte wrote to the municipalities in 2004.

At that time, the municipalities were responsible for welfare benefits and tackling fraud concerning these allowances. He did note in the letter that this involved a minority within the Somali community.

Rutte believed there were sufficient grounds to breach the principle of non-discrimination. According to his testimony, the law “does indeed" allow for this "if there are sufficient grounds," and he believed that these were present. The exact number of potentially fraudulent Somali Dutch citizens was unclear, hence the necessity for investigations by the municipalities, Rutte emphasized during the hearing.

In 2007, the court ruled that this action “was contrary to what is expected of a properly acting government and contrary to the general principles of good governance." It was "a case of race discrimination," according to the verdict. However, Rutte insisted that it was "proper governance" to intervene.

He acknowledged on Thursday that he would seek a different, non-discriminatory method to conduct further investigations. The court's ruling played a significant role in this, the caretaker Prime Minister noted.