Wednesday, 30 December 2009

Kallas and the unresolved revolving doors problem

While Commissioner Kallas certainly deserves praise, the paper titled "My results 2005-2009" posted on his website just before Christmas overstates his achievements on some key issues. The voluntary lobby transparency register simply suffers from too many shortcomings to be considered a success, as has been pointed out in numerous postings in this blog and by other observers. Kallas's paper also highlights the “comprehensive staff ethics initiative”, which was launched “to raise awareness of the ethical rules of the European civil service”. A more realistic assessment of Kallas' record on ethics issues is that he has focused too much on awareness-raising and failed to add teeth to the Commission’s approach towards conflicts of interest. The Commission's current ethics rules are sketchy and the implementation ineffective, for instance when it comes to Commission officials going through the revolving doors to private sector lobbying jobs.

In theory, Commission officials are required to request permission before going through the revolving door and the Commission can refuse or attach conditions before authorising the move. In practice, the Commission is far too easy-going with giving the go-ahead. Only last month, Brussels-based lobby consultancy Interel Cabinet Stewart proudly announced that Jean-Philippe Monod de Froideville had become their new associate director. Mr. de Froideville, a Dutchman, was a personal advisor and member of Cabinet of Competition Commissioner Kroes, between July 1st 2007 and December 31st 2008. Interel's press release states that Mr. de Froideville will focus on “competition and trade matters” and that he will work “horizontally across the client portfolio”. It seems that the Commission has failed to prevent some obvious conflicts of interest that could emerge from Mr. de Froideville's new job as a lobbyist on competition policy issues, the very same field for which he was so recently responsible in the Commission. Interel is temporarily absent from the Commission's lobby transparency register, but the consultancy's report submitted to the register earlier this year includes
Rio Tinto and numerous other corporate clients that could have a strong interest in influencing EU competition policy.

When CEO asked the Commission's DG Admin for clarification about its approval of
Mr. de Froideville's new job, the cryptic response was that "the decision has not been taken”. This could mean that the Commission has not at all intervened in the matter of Mr. de Froideville's job move or that the decision has not yet been taken. This last scenario would also be rather surprising, considering that Mr. de Froideville's new employer already on November 19th presented him as their new associate director.

In any case, there is a strong argument to be made for lobby consultancy work on competition policy issues to be entirely off-limits for a member of the Cabinet of the Competition Commissioner for a lengthy period of time. A 'cooling off' period of several years would be needed before conflicts of interest can be convincingly ruled out. Interel's press releases reveals a serious lack of awareness about potential conflicts of interests related to employing high-level Commission officials; yet another good reason for introducing a general cooling-off period of several years.

On the last page of his paper, Commissioner Kallas acknowledges that there are still “a number of important challenges that need to be addressed”, one of which is to “pursue comprehensive staff ethics”. Indeed, there's serious work to be done for Maros Sefcovic, the candidate to replace Commissioner Kallas on Administration matters.

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Monday, 14 December 2009

EU citizens suspect corruption in EU institutions, Wenig escapes sanctions

Remarkably under-reported: an opinion poll published by Eurobarometer last week revealed that a growing share of European citizens considers corruption to be a serious problem. No less than 83% of the respondents believe that “there is corruption in national institutions” (ranging from 35% in Denmark to 98% in Greece). “The close links between business and politics is the most common cause Europeans give for corruption, followed by insufficient action by governments to prevent corruption”, Eurobarometer reports. 42% of respondents agree that “there are too close links between business and politics”.

The survey reveals that the image of the EU institutions is very grim and has further deteriorated in the last two years. According to the poll, a shocking 76% of EU citizens agree “there is corruption within the institutions of the European Union”, up from 66% in 2007. Respondents in Greece, Slovenia, Sweden (all 85%) and Germany (84%) most often share these concerns, those in Poland and Romania least often (both ‘only’ 58%). Strangely, this seems to be the only question that was asked about the EU institutions, the rest of the survey only deals with opinions about corruption on the national level. This is a missed opportunity, but the figures are sufficiently extreme to merit a strong political response. The burning question is: what will Barroso’s new Commission team do to secure the highest possible standards in preventing corruption and conflicts of interests in the EU institutions?

Over the last few months Brussels Sunshine has reported numerous cases showing that the Commission does not exactly have its house in order yet when it comes to avoiding conflicts of interest: a Trade Commissioner who personally signs the decision to lift import tariffs for a giant corporation owned by a close friend, ex-Commissioners working as highly-paid lobbyists, a lobbyist for Microsoft and Pfizer being the Special Adviser of the EU’s Consumer Commissioner, just to mention a few examples.

The need for change was underlined very clearly when earlier this month, the European Voice reported the bizarre news that former Commission official Fritz-Harald Wenig was found guilty, but will not suffer any consequences for highly unethical behaviour. Mr. Wenig, who has meanwhile retired, had according to the Sunday Times, offered to leak commercially sensitive information about trade negotiations in return for financial rewards. The European Voice now reports that the EU’s Civil Service Tribunal “found that Wenig had failed to comply with the Commission code of conduct”, but at the same time overturned his suspension “due to procedural errors”. The reason: the suspension decision was “taken only by Commissioner Kallas, rather than by the full College of Commissioners.”

According to the judgement of the Tribunal, the College had given Kallas the mandate to deal with the Wenig case on 10 September, but – contrary to the EC’s internal rules – this decision was only published on the EC intranet and not in the appropriate print publication. That formal error made Wenig win the case! The Commission may have wanted to act firmly in this case but had to fall back upon improvisation.

After the Tribunal’s verdict, the Commission has to repay Wenig the €6,000 that was deducted from his salary during the six month suspension period. The fact that Wenig was found guilty of violating the Commission’s internal rules, but suffers no consequences, raises major questions about the Commission’s ability to handle the corruption cases that so many Europeans worry about.

The Barroso II Commission clearly has its work cut out for itself!

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Friday, 4 December 2009

Potočnik as Environment Commissioner – industry in the drivers seat?

One of the remarkable aspects of Barroso’s decisions on the portfolios of the new Commission team is that all 13 current Commissioners that continue in Barroso-II will get a new portfolio. The logic behind these transfers is not always exactly clear and in some cases Barroso’s choices are very worrying. Take the example of Janez Potočnik who after five years as Research Commissioner is now proposed as new Environment Commissioner.

An Environment Commissioner should be strongly determined to defend the need for ambitious environmental protection laws and policies that can move societies away from unsustainable over-consumption that causes massive damage not only in Europe, but across the world. Standing firm against industry lobby groups that seek to block, delay and water down such policies, is a crucial element of the job. And there, Potočnik’s record as Commissioner for Research does not necessarily bode well. Judging from his approach to the European Technology Platforms, Potočnik may not be the most well-equipped to handle the heavy industry lobbying pressures that he will face as Environment Commissioner.

The European Technology Platforms play a key role in shaping the allocation of EU research funding (FP7), which concerns very large sums of taxpayers’ money. During Potočnik’s tenure as Research Commissioner, many of these advisory bodies were heavily dominated by, if not almost exclusively composed of representatives of large corporations with a direct commercial interest in the area on which the advisory groups were to formulate proposals. Examples include the Technology Platforms on agrofuels, ‘clean coal’, security research and biotechnology.

In the example of the Technology Platform on agrofuels (EBFTP), lobbyists managed to shape the research priorities in a way that opened up for their companies getting hold of millions of euros of public money to promote potentially very harmful technologies such as genetically modified trees. Many of the companies that participated in the EBFTP have received EU funding for their research projects, including Bayer, Shell, Syngenta, Novozymes, SEKAB, Abengoa, Repsol and SweTree Technologies. The European Ombudsman is investigating a complaint by CEO into these matters.

Disturbingly, this industry capture was not an accident, but the result of a conscious strategy from Potočnik’s side. In a letter to CEO (June 2007), Commissioner Potočnik justified the dominance of industry in these platforms saying: “European Technology Platforms have been conceived as a means to help realise the Lisbon Strategy. The platforms can play a key role in better incorporating industry’s needs into EU research priorities by bringing together stakeholders, led by industry, to define a Strategic Research Agenda and to suggest possible directions for its implementation. This is the underlying rationale for the deliberate industrial focus of technology platforms, which was indeed, as you note correctly, reflected in BIOFRAC and is also manifest in the composition of the Biofuels Technology Platform.”

If Potočnik would display a similar pro-corporate bias as Environment Commissioner, this would seriously undermine the effectiveness and credibility of EU environmental policy.

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Will Barroso-II have a transparency Commissioner?

Media reactions to Commission President Barroso’s decisions on the division of portfolios over the 26 candidate Commissioners have concentrated on who got key portfolios, like Michel Barnier getting the internal market job, which includes the politically hot financial services dossier. What seems to have gone unnoticed so far, is the lack of clarity over who will take over political responsibility for the next phase of the European Transparency Initiative.

Commissioner Kallas, who launched the ETI in 2005, is moving to transport and his portfolio will be split over at least three of the incoming Commissioners. Over the last term, Commissioner Kallas made good progress in securing transparency around EU agriculture funds and beneficiaries of EU grants and contracts to external consultants. Less impressive, but certainly not unimportant, was the progress he made in promoting lobby disclosure as well as preventing conflicts of interests, for instance around the Commissioners' Special Advisers. The European Transparency Initiative, despite the shortcomings in its implementation, is perhaps the European Commission’s first-ever ambitious initiative to address the lack of transparency and ethics rules around EU lobbying. It is worrying that Barroso has left it unclear whether the ETI will be continued during the next five years and which Commissioner will be in charge.

In a letter sent to Barroso November 23rd, and posted on Kallas’ website, the Estonian Commissioner “hands his lobby regulation mandate back to President Barroso”. Kallas recommends Barroso to assign “clear political responsibility for driving this issue forward in the next Commission”. However, when Barroso later that week announced the division of portfolios, such clarity was entirely missing. It seems Barroso has divided Kallas’ portfolio over three incoming Commissioners:

  • Maroš Šefčovič: Vice-President of the Commission for Inter-Institutional Relations and Administration
  • Algirdas Šemeta: Taxation and Customs Union, Audit and Anti-Fraud
  • Janusz Lewandowski: Budget and Financial Programming
There’s also the scenario that Barroso would take charge of the ETI follow-up himself. President Barroso should urgently provide clarity over who will get political responsibility to drive this issue further. Whatever the constellation, Barroso needs to address this very important issue with the necessary vigor and determination. During the approval hearings of the incoming Commissioners in Parliament in mid-January, MEPs are more than likely to ask questions about the new Commission's approach to lobbying transparency and ethics. The ETI was an important starting point, but there are still plenty of improvements to be made, for example on the lobby register.

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Thursday, 3 December 2009

Searching in vain for the EP's Chamber of Secrets (Intergroups Register)

In the last few weeks, CEO has tried in vain to access the European Parliament's Register of Intergroups. After numerous phone-calls and fruitless email correspondence, we raised the white flag and wrote a complaint letter to the Parliament's Quaestors instead. Our failed search for the register reveals an unacceptable lack of transparency.

In 2006 Corporate Europe Observatory published a survey of official and informal intergroups operating in and around the European Parliament. The so-called intergroups contain MEP's from different political families in the Parliament and are centered on a specific issue or area of interest (like Tibet or anti-racism). Some Intergroups are used as lobbying tools by special interests, for example the secretive Sky and Space Intergroup, which is run by ASD, the Aerospace and Defence Industries Association of Europe. This activity is absent in ASD's file in the Commission's lobbying transparency register.


During the 2006 survey it proved pretty difficult to find information on the intergroups officially registered with the European Parliament. It took quite some determination to get access to the room hidden deep in the EP labyrinth where the registration forms for all formal intergroups were kept in old-fashioned binders. And when we were finally able to take a look at the files, it turned out that most intergroups had failed to submit the updated and complete declarations which the rules require.


With the approval process of intergroups for the new legislature now entering its final phase, we wanted to repeat our survey. Our goal was to examine if intergroups had registered properly, in particular if they had provided financial data as required in the rules on intergroups. But this was easier said than done. The internal rules of the Parliament regarding intergroups state that “the Quaestors shall keep a register of the declarations of financial interests submitted by the intergroup chairs. That register shall be open to the public for inspection.” However, contrary to what would be the common sense solution, the register is still not available online. So we had to get in touch with the Secretariat of the Parliament, who hopefully could point us in the right direction. After corresponding with several secretariat staff, we finally managed to talk to the person responsible for the register.


While we were hoping that we could go and browse the paper files (as we did in 2006), it turned out there were no files available at the moment. As the last legislature was now past, the files had been sent to the archives. But according to the head of the archives, they had never received any documents of that kind. Thus, he forwarded our request to yet another register, namely the Public Register of Documents. And there we finally lost the scent, when a friendly lady at this Register told us they didn't have the files, and we should try to get in touch with the Register of Intergroups itself.


This brought us back to where we were when we started our investigations. A Kafkaesque experience that makes us wonder why it is so hard to live up to basic transparency standards? If the intergroups are requested to submit their financial interests and the public are allowed to see these files, why is this information not available?

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Tuesday, 1 December 2009

Mandelson's links to oligarch raise concerns over Commissioners' conflicts of interests

Channel 4's documentary Dispatches yesterday revealed a document showing that former EU Trade Commissioner Peter Mandelson (2004-2008) personally signed the decision to lift import tariffs for Rusal, the aluminum giant owned by Lord Mandelson's close friend Oleg Deripaska.

Lord Mandelson's close links to Deripaska have attracted criticism before, but the document, dated December 20th 2005, appears to show a serious conflict of interest. German MEP Dr Ingeborg Graessle described Lord Mandelson's behaviour as "a completely improper doing" and argued that "it is a conflict of interest". "For me it is a conflict of interest, when you have a close friend who profits from your decision," Graessle told The Independent.

In response, Lord Mandelson's spokesperson argued that EU decision-making is "based on a college system where decisions are taken by 27 commissioners. The idea that one individual can influence the process is laughable". This comment ignores that the Trade Commissioner position is a hugely powerful one and that Mandelson did hold very substantial powers over trade policy decisions. The College of Commissioners often just rubber-stamps what is proposed by the Trade Commissioner.

The spokesperson also stated that EU commissioners are not subject to any code of conduct for these type of situations. This is correct and underlines the importance of tightening the code of conduct for Commissioners. Commission President Barroso has announced a review of the current code. The ALTER-EU coalition has written to Barroso with recommendations for such a review.

MEP Graessle told UK newspapers that she is going to "make Lord Mandelson's involvement with Mr Deripaska a centrepiece" in her efforts to promote a code of conduct that can prevent conflicts of interest.

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