The announcement by Malta’s police commissioner that he does not have a criminal case against John Dalli is bad news for Giovanni Kessler, the head of the European Union’s anti-fraud office, and bad news for José Manuel Barroso, the president of the European Commission.

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That Joseph Daul, the leader of the biggest political group in the European Parliament, should be among those demanding that Kessler resign ratchets up the pressure on the Commission president, who has been trying to keep his distance ever since Dalli resigned.

After Malta’s European commissioner resigned, accusations and counter-accusations about the role of the tobacco industry sprang up, with conspiracy theorists suspecting and alleging dirty tricks against Dalli.

Criticism of OLAF’s investigation also surfaced. The most damaging allegation is probably that, in the opinion of OLAF’s supervisory committee, OLAF did not have a legal basis for the taping of telephone conversations during its investigation and so breached EU law. That charge was spelt out with devastating calm by Catherine Pignon, a member of the supervisory committee, at a hearing of the Parliament’s budgetary control committee on 29 May.

It is possible to read too much into the remarks by Peter Paul Zammit, Malta’s police commissioner. He did not say that Dalli did nothing wrong – even if Dalli has attached that meaning to them. Zammit says that there is not enough evidence (yet) to bring a criminal case. But he said that the burden of proof required in a criminal case is heavier than for a civil case. Nor does it follow automatically, pace some of OLAF’s critics, that if a criminal case is not brought, OLAF was wrong to pass its dossier to the Maltese authorities. OLAF is not the prosecuting authority: its task is to gather evidence and pass that on to the authority where it sees evidence of wrongdoing.

The simplest way for OLAF to ride out the criticism would have been for a court to convict Dalli. According to Zammit, that is not going to happen anytime soon. What makes that additionally damaging to OLAF is the way Kessler responded, to the charge that OLAF had acted unlawfully in the conduct of its investigation. His perfunc-tory answer was that the courts would decide. MEPs will not accept that response, particularly not after being told there will not be a court case in the immediate future.

For Barroso, Dalligate goes from bad to worse. The decisiveness that characterised his despatch of Dalli threatens to look like gullibility. As the accusations against OLAF have mounted, he has been accused of playing into the hands of the tobacco lobby. His best hope was that the case would come to court in Malta and that Dalli would be convicted.

Daul, the leader of the centre-right MEPs, now takes the view that it was wrong to force the resignation of Dalli (also of the centre-right) and that somebody should pay the price. He remains supportive of Barroso, but thinks that the Commission president should sacrifice Kessler.

Although theoretically Barroso has the power to discipline, even suspend, Kessler, he will be reluctant to do so. Their fates may be intertwined. If Kessler goes, it will reflect badly on Barroso, who has just over a year of his mandate left, and wants to avoid looking like a lame-duck. If Kessler rem-ains, but continues to be harried by MEPs, then Barroso will suffer by association.