Tuesday, 20 October 2009

Three surprising new entries on the register

The number of entries in the Commission’s voluntary lobby transparency register has now passed 2,000 (753 of which are Brussels-based). The Commission celebrated this as a big success, but in fact the rate of participation is still below 1/3 of Brussels-based lobbies (estimated as 2,600 in an European Parliament report from 2000). Among the recent sign-ups are some big fish, but their reports beg a few questions.

The European Roundtable of Industrialists (ERT) joined the register earlier this month, much to the delight of Commissioner Kallas, who celebrated with a note on his website saying he was “pleased that [the ERT] has again confirmed its positive European spirit by joining the transparency register”. The ERT lists the names of three members of staff “engaging in direct advocacy of ERT positions” and reports lobbying expenditure of 300,000 - 350,000 euro in 2008, which “does not include expenses incurred by our Members and their companies for participation in ERT activities”. There are several major problems with the ERT’s registration: firstly, only 20 of the 48 member companies have joined the register; large firms like Nokia, E.ON, BT, Deutsche Telekom and Heineken have not. This means that a major part of the ERT’s lobbying expenses remains invisible. Secondly, the ERT lists three of its staff as lobbyists, but shouldn’t politically active CEOs like Peter Sutherland (BP), Jorma Ollila (Nokia) and Peter Brabeck-Letmathe (Nestle) also be listed?

Another surprising new entry is chemical industry lobby group CEFIC, which returned to the register in late September after two months suspension. The Commission suspended CEFIC as it had reported its lobby expenses as less than 50,000 euro per year, out of a budget of over 40 million euro. The Commission judged that this “appears to be underestimated”. CEFIC is now back on the register reporting a 4,000,000 euro lobby budget in 2009, a remarkably round figure. The figure may be 80 times more than its previous entry, but this still means that only 10% of CEFIC’s budget is being used on lobbying which seems to be a low estimate. CEFIC's entry says that the remainder of the budget goes on managing Horizontal Programmes, Sector Groups (a combined 30,2 million euro), and Research Funding (a total 13,5 million euro). Why these costs are not considered as lobbying remains unclear.

The third noteworthy addition to the register is lobbying consultancy firm Pleon, which reports its lobby turnover as “>= 1,000,000 euro”, using the privilege of the lobbying consultancies to opt to hide their lobby turnover. Whether this means just over a million or perhaps ten times more, one can only guess. With 50 staff in its Brussels office, 5 million euro is perhaps a good guess. But the Commission’s lobby register, in its current form, does not provide answers to such basic questions. Pleon's entry does at least mean its client list is now in the public domain. According to media reports, Pleon had seen an increase in “clients for whom proposed EU environment and consumer protection rules go too far”. Pleon lists 16 clients for 2008, 15 of which contribute below 10 % of Pleon’s lobby turnover. Among the clients is BAT, but as with all the other clients it is impossible to judge whether Pleon is undertaking a major lobby operation for the tobacco giant or perhaps just some advice. The list is for 2008 and as reporting is only once per year, the register does not show who Pleon has started lobbying for since then. Far more frequent reporting is needed, especially for lobby consultancies, if the register is to become a reliable information tool.

The Commission is expected to announce changes to the register before the end of this month. A crystal clear definition of what to report as lobbying expenditure, more frequent reporting and closing loopholes in financial disclosure are essential.


Friday, 2 October 2009

Ex-Commissioners lobbying at 500 euro per hour

The Belgian daily newspaper De Standaard has this week published an interesting series of articles on EU lobbying. While one article covers the critical perspective of lobby watchdog groups like Corporate Europe Observatory, De Standaard also published a lengthy interview with Russell Patten, who leads the Brussels office of lobby consultancy giant Grayling Global. Patten argues that “lobbyists have nothing to hide” and that the negative image of lobbying is undeserved. On the question why Grayling has not joined the Commission’s lobby transparency register (launched 15 months ago), Patten explains that some of the firms' clients were sceptical about disclosure. He expects that Grayling will sign up “towards the end of the year”.

EUobserver last week reported about “ScienceMatters”, a campaign questioning the EU’s use of environmental risk assessments. This campaign is run by Grayling on behalf of chemicals companies Albemarle, Chemtura, and ICL-IP. According to EUobserver, these chemical companies have invested €100,000 in the campaign, which is also actively supported by pesticide and biotech lobby groups. “ScienceMatters” is a continuation of the ReachForLife initiative, also run by Grayling, which aimed to overturn a ban on deca-BDE, a toxic flame retardant produced by Albemarle, Chemtura and ICL-IP. Has it not occurred to Mr. Patten that it is this kind of scandalous activities that gives lobbying its negative image?

In the interview Mr. Patten makes some fascinating remarks about the salary of lobbyists in Brussels. “If you are really good, you can earn up to 350 euro per hour”, says Patten, adding that, “for ex-Commissioners or top civil servants this can be up to 500 euro per hour”. Patten estimates that about half of the Brussels-based lobbyists previously worked in the EU institutions, and that this percentage used to be even higher in the past.

Patten’s remarks leave me with a burning question: who are these former Commissioners that are now earning up to 500 euro per hour as lobbyists? Former trade Commissioner Leon Brittan and former industry Commissioner Martin Bangemann went through the revolving door and became lobbyists after the fall of the Santer Commission in 1999, but both are now over 70 years old. A more recent example of a Commissioner entering the lobbyist profession is Pavel Telička. The former EU Commissioner for health and consumer affairs co-founded lobby firm BXL Consulting almost instantly after leaving the Commission in 2004. With BXL Consulting, Telička provides lobbying services to corporate clients such as Microsoft, energy giant RWE and OKD Doprava, a Czech coal producer.

Which other ex-Commissioners may Mr. Patten be referring to? The Commission’s lobby transparency register does not throw any light on this important question: not only is registration voluntary, the register has no names of lobbyists in it...

Do you know more about such high earning former Commissioners and senior Commission officials? Contact us at ceo@corporateeurope.org.