EU staff may face the sack over their bit on the side - a Brussels 'red light' hotel

A sex hotel owned by two European Commission employees has caused intense embarrassment for the Brussels authorities, who were unaware of the pair's outside business interests.

The EC has begun disciplinary proceedings against the employees, an Italian and a Greek, for allegedly bringing the commission into disrepute over their involvement with the Studio Europe. The hotel, in one of Brussels' most notorious red light districts, rents rooms by the hour to prostitutes and their clients.

Carmela L.G., an assistant in the budget ministry, and her associate, Georges T., a porter in the employment ministry, are expected to appear before the commission's disciplinary board within the next month.

They face charges of breaching the commission's employee statute, which says that outside activities must be "compatible with the interests of the institution".

Together with another man, Ali A.M., who is understood to be Ms L.G. companion, they own the seedy establishment on Rue des Commercants, although they do not officially manage it. Dozens of prostitutes walk the pavements of the neighbourhood night and day.

Studio Europe charges 13 euros (£8.80) an hour for rooms equipped with a bathroom, mirrors, and a purple light.

The commission's embarrassing link to Studio Europe came to light after its two employees boasted that they had well-placed European Union connections during a fraught meeting of a local residents' committee.

The meeting was called to discuss ways of tackling the growing prostitution problem. Families in the "Flemish Theatre" quarter, 15 minutes' walk from the centre of Brussels, often complain that female relatives and friends are accosted by men looking for sex. According to some residents, Ms L.G. and Mr T. disrupted the meeting. "They were very aggressive," said a committee member who asked to be identified only as Valerie.

"They were screaming that they worked for the European Commission and had the right contacts." After the meeting, the incident was reported to commission authorities.

A Belgian MEP, Bart Staes, took up the residents' complaints. "While the two bureaucrats are only officially owners, not managers, their presence at the residents' meeting indicates that they are conscious of the use made of their property," Mr Staes wrote to Siim Kallas, the EU commissioner with responsibility for internal administration, also claiming that the pair had tried to intimidate the residents.

Mr Kallas replied that their actions could breach article 12 of the statute, which says that Eurocrats must obtain permission before engaging in any outside activity. While the hotel is a legitimate business, the statute states that "an official shall refrain from any action or behaviour which might reflect adversely upon his position".

A preliminary hearing decided that there were grounds for disciplinary proceedings. If they are found to have breached the statute, sanctions could range from a warning to a cut in pay or pension rights and dismissal.

Last week it was not possible to contact either of them at the commission, where both are still employed, or on home telephone numbers. Staff at Studio Europe claimed never to have heard of them.

In a local newspaper the two employees denied using threatening language at the residents' meeting.

This is not the first time that Ms L.G. has crossed swords with her employer. In April she began court proceedings against the EC under the same article of the same statute.

She claimed, according to European Court of Justice documents, that she suffered from "moral harassment", allegedly proven in e-mails. She is seeking damages of 100,000 euros.

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