Monday, 4 October 2010

German company register shows Verheugen’s active role in European Experience Company and a clear conflict of interests

New documents, obtained from the German official company register reveal that former EU commissioner Günter Verheugen has a clearly defined active role in the European Experience Company as well as a clear financial interest.

It is now five weeks since the German weekly Wirtschaftswoche broke the news that the former commissioner was involved in European Experience Company lobby consultancy. The Commission has asked an Ad-hoc Ethical Committee to assess the risk of conflicts of interest from this, but the process appears to still be on-going. Verheugen, meanwhile, wrote an open letter to the Euractiv news portal which said in the headline: “I have no paid job at the European Experience Company, so Code of Conduct doesn’t apply”. In his letter, Verheugen elaborates:
“My investment in this company does not constitute an occupation. Consequently the Code of Conduct does not apply in this case. Therefore I did not need any permission and I have not asked the Commission for clearance.”
As argued in a previous blog posting, this interpretation of the Code of Conduct for Commissioners is not convincing and directly contradicts the wording in the EU Treaty referred to by the Code.

Verheugen’s attempts to get around the Code of Conduct appear creative, but the facts would seem to contradict him. The German register of companies (Handelsregister) shows that The European Experience Company was established 31st of March 2010, with a start capital of 25,000 euro. It appears there are only two shareholders in the company. According to the Bürgel Firmenprofile, 50% of the start capital came from Verheugen, the remainder from Petra Erler, his former head of cabinet at the Commission, and now business partner (12,500 euro each).

Verheugen, according to the company statutes, has the same title (Managing Director) and authority as Erler, including the right to represent the firm on his own and to sign contracts with external parties (click on picture to enlarge).

The German register of companies is clear (above): Petra Erler and Günter Verheugen are both 'Managing Directors' (Geschaeftsfuehrer). There is no distinction between 'executive' and 'non-executive' directors, contrary to what Günter Verheugen and the website of his company both claim since the scandal broke (right).

Verheugen will clearly be actively involved in the European Experience Company and will financially benefit from whatever profit the company makes, presumably taking 50 per cent. Verheugen is officially retired and is reported to enjoy a European Commission pension of around 10,000 euro per month.

In his open letter, Verheugen also stresses “that the European Experience Company explicitly excludes any lobbying activities”. As mentioned before, it is hard to judge what Verheugen means by this. How narrow or broad does is Verheugen’s definition of ‘lobbying’? A narrow definition would mean only direct, face-to-face lobbying of EU officials, but the Commission’s definition of lobbying is – rightly - far broader than that:
“activities carried out with the objective of influencing the policy formulation and decision-making processes of the European institutions” [including preparations for lobby activities].
The broad definition from the transparency register launched in 2008 was confirmed in October 2009. Since it was first registered in March 2010, the European Experience Company’s activities are officially described as “Consultancy and education for institutions and corporations about EU and other political matters” (our translation; see document above). Nowhere in the official documents is there anything that points to lobby activities being excluded.

The Commission’s decision on Verheugen’s involvement in the firm will show whether there is any real political will to prevent conflicts of interest. In the last 10 days, almost 4,000 people have written to the Commission to insist that Verheugen’s role should not be approved.

Download the documents filed by The European Experience Company at the German register of companies

Photo: (c) European Commission

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