Thursday, 27 August 2009

Lobbyists receiving EU money must be transparent

A large number of think tanks which receive funding from the EU Commission are boycotting the Commission’s lobby transparency register, as Commissioner Kallas recently highlighted. “I find it surprising that think tanks that receive substantial amounts of Commission funding, including 17 of the top 20 recipients, have not followed our invitation to join,” Kallas commented. “In fact, some of those we support are the least co-operative. Perhaps a “reminder” is needed, so I fully support the idea of my colleague, commissioner Figel, to include an invitation to join the Register in the next call for proposals to access the “Europe for Citizens Programme”.”

Expecting recipients of Commission funding to join the lobby transparency register is hardly unreasonable – assuming that the think tanks will actually disclose their sources of funding (which is not currently required by the Commission). But why not go further than a mere “invitation to join”? And what about those other think tanks which do not receive funding from the Commission? Many of these are also refusing to join the register.

Still, the approach of Commisisoners Kallas and Figel might help overcome the transparency boycott of at least some think tanks. Perhaps the Commission could broaden this approach and also start putting pressure on other recipients of Commission payments. Concretely, the Commission should consider making lobby transparency a condition for consultancies that win Commission contracts.

An estimated €2 billion of work each year is contracted out by the Commission. This includes services such as media monitoring and press relations, constructing websites, organising press conferences and seminars, and running promotional campaigns. A significant number of contracts for communications work and media campaigns are run by ‘public affairs’ firms that also provide lobbying services for corporate clients – which means they should be on the register.

Among the Commission’s favorites are Ogilvy and Edelman, who have both joined the register. Edelman recently won a Commission contract worth 1,563 million euro (leading a consortium with three smaller companies). Edelman’s task is “to improve the provision of Public Information on the European Union in Ireland”, as part of efforts “to promote better public understanding of the EU on a longer-term basis.” Ogilvy last month landed a 760,000 euro contract to do a “communications and outreach campaign on biodiversity”

But other consultancies with similar Commission contracts have not joined the transparency register. Take the example of DLA Piper, whose Brussels-based office that combines legal advice and lobbying services (see also "Confidential: Law Firm Lobbyists at Work"). Last month DLA Piper won a bid for a 498,750 euro contract to set up a database for the Commission on “unfair commercial practices in the EU” that will detail how the EU's directive on this matter is being implemented. In March this year, DLA Piper announced it had won a Commission contract to “improve European e-commerce legislation”, producing a study with recommendations on issues like “data protection, service provider liability, electronic payments, consumer protection, digital copyright and child safety.” Is it too much to ask that DLA Piper ends its boycott of the lobby transparency register and discloses which (corporate) clients it is lobbying for?

Preventing conflicts of interest

In fact lobby transparency is particularly important for consultancy firms that carry out tasks for the European Commission. These public affairs firms inevitably gain privileged access to information, privileged access to insiders within the Commission and other potential benefits. With such privileged access, conflicts of interest can arise. This problem is most likely to occur when the firms carrying out this work for the Commission are also lobbying for corporate clients, who pay the firms to promote their messages and enhance their reputation in the corridors of power. Consultancies, including DLA Piper, may be tempted to abuse the role granted to them through these contracts to unduely advance the interests of their corporate clients.

This is not idle speculation. There are clear examples where public affairs consultancies appear to have taken advantage of their contracts with the Commission to promote the aims of other clients on their books. Weber Shandwick, which worked for the commission Directorate-General for Consumer Affairs for several years, organised a controversial Commission press event on ‘Fighting Obesity’ in November 2006. At the event Markos Kyprianou (then Commissioner for Consumer Affairs) praised several major food, drink and retail companies for their role in tackling obesity, including McDonalds, Unilever, Pepsi Cola, Coca Cola and Kraft. Their chief executives were invited to present their commitments to the press and journalists were also shown a video clip titled “Industry tackles obesity” which highlighted the beneficial role played by McDonalds, while featuring Pepsi Cola, Coca Cola, Kraft and Unilever products. At least two of the five multinationals praised were Weber Shandwick clients at the time (Coca-Cola and Unilever) – and two of the others (McDonalds and Kraft) have previously been represented. The press event was criticised by industry and NGOs and critical questions were raised by MEPs. But it is unlikely to be an isolated example. Weber Shandwick informed CEO that since December 2007 the company has withdrawn from doing contract work for the Commission.

The Weber Shandwick case shows that, beyond enforcing lobby transparency, the Commission should introduce safeguards against conflicts of interests and the abuse of the opportunities provided by outsourcing sensitive tasks. Such outsourcing has in fact been questioned in an EP resolution, calling on the Commission to reconsider its outsourcing “in the light of such high sums for consultant contracts and the negative experience of awarding contracts to external firms in the past”.