Monday, 21 February 2011

MEPs corner the Commission on expert groups

MEPs from all sides of the political spectrum last week attacked the Commission's failure to act against the industry dominance of many of its advisory bodies, the so-called expert groups. The Commission came under fierce criticism from more than 15 MEPs who took to the floor during a debate in the European Parliament’s plenary hall, demanding solutions to the expert group problem and insisting that Parliament should be involved in the decision making process.

The conflict came about after the Commission finalised new rules on expert groups at the end of 2010 - without any dialogue with MEPs or civil society. The new rules fail to solve a number of widely-recognised problems with expert groups, which include a lack of transparency and the dominance of industry lobbyists in many groups (see ALTER-EU's statement). The United Left group summed up the mood in their press release which declared “MEPs furious at Commission over shady expert groups”.

Setting up expert groups is the main way in which the Commission seeks technical, scientific, legal and policy advice. Members of these groups are often given the privileged opportunity to influence upcoming legislation long before any public or democratic debate takes place. Representatives from big business dominate more than 100 expert groups and are by far the biggest constituency in expert groups, with the exception of those representing national governments. To add insult to injury, many of the supposedly 'independent experts' that pledge to act on behalf of the public interest are in fact on the payroll of large corporations and their lobby groups. Shockingly, this is the case for over 190 lobbyists advising the Commission on financial regulation .

Monica Macovei MEP from the European People’s Party group slammed the Commission for allowing this to happen. She highlighted the lack of procedures to detect conflicts of interests, pointing out that it was not enough to simply ask expert group members to sign a declaration of commitment to the public interest. She demanded safeguards against the corporate capture of expert groups, stressing that small and medium-sized companies (SMEs) and NGOs are not properly represented.

Hans-Peter Martin
MEP (Independent) demanded sanctions against expert group members who claimed to be independent while they were actually on the pay-roll of corporations.

Michael Cashman
MEP from the Socialist Group (S&D) criticised the fact that the Commission’s new rules limit transparency around documents discussed in expert groups. According to the new rules, expert group members (including corporate lobbyists) have access to classified documents, but it is unclear if and how they will go through the clearance procedures provided for the Commission’s own staff members. (Rules for Commission, p. 19) The Commission is trying to avoid the publication of all expert groups’ documents in the relevant public register.

Corinne Lepage
MEP from the Liberals (ALDE) demanded a change in the criteria used to select external experts to prevent the marginalisation of civil society.

Pascal Canfin MEP from the Greens said he found it “completely surrealistic” that the Commission was mainly consulting investment bankers including American ones such as JP Morgan and Goldman Sachs on how to change rules on banking after the economic crisis, through the expert groups dealing with financial regulation.

Dennis de Jong MEP from the United Left group last year offered his advice to the Commission on new rules for expert groups but his input was ignored. Like other MEPs, he asked the Commission to guarantee that the Parliament would be consulted on expert groups’ rules. He said he had spoken with many civil society stakeholders who said they didn't feel reassured that a balanced composition would be guaranteed by the Commission. Eva Britt Svenson, also from GUE/NGL published a statement on the matter.

The ‘responses’ from Commissioner Siim Kallas, who replaced Commissioner Maroš Šefčovič in the debate, confirmed that the Commission lacks political will. He recognised that expert groups were ''covered in obscurity'' until 2005, but argued that transparency had improved. This is in fact true given that until 2005 even the names of the expert groups were secret. It took to the Commission four more years to publish the names of the members of the groups. But the Commission seems to think that transparency should stop here and is not providing full transparency on expert group documents. And the Commission has so far failed to address the issue of industry capture of expert groups.

Kallas previously tried to hide behind the fact that expert groups don't make formal decisions, ignoring the fact that these groups are highly influential. He also questioned who could judge whether an expert group was really balanced. Yet this is entirely possible. ALTER-EU has proposed clear common criteria that all Commission departments should follow prohibiting any interest category (business, unions, NGOs or others) from having a majority in any group.

As parliamentary pressure is also growing over the revolving doors cases involving ex-Commissioners (and the resulting conflicts of interest), perhaps the time has come when the Commission will finally recognise the need to act to show that it is an independent institution, not the just the tool of corporate influence.


Most – but not all - Danish MEPs transparent on lobbying

A survey done by an intern at Corporate Europe Observatory (CEO) has thrown new light on the relations between Danish MEPs and lobbyists. Jacob Hoedeman wrote to Danish MEPs during his internship, asking them for a list of meetings they had had with lobbyists in the last two months of 2010.

Eleven out of 13 MEPs responded
within the week and only one of these, Liberal Jens Rohde, refused to send a list of the lobbyists he had met with. Rohde argued that anyone should be able to meet with him on a confidential basis. The rest responded often including the names of the groups and the individual lobbyists they met with, as well as the topic discussed. The number of meetings ranged between two and 16 over the two-month period, which is modest compared to the 250 meetings reported by UK Conservative MEP Chichester over a six-month period in 2010. The Swedish news portal recently surveyed the 18 Swedish MEPs and found five declined to participate, three of whom rejected the need for transparency and argued for the 'privacy' of lobbyists.

The Danish MEPs’ survey provides interesting insights into the work and habits of the MEPs. There is, for instance, a marked difference in the groups MEPs met, with liberal MEP Morten Løkkegaard (11 meetings with lobbyists) virtually only meeting with industry lobbies while social democrat MEPs met with trade unions, NGOs and business, and left-wing MEP Søren Søndergaard who only met with an Iranian opposition group and a Danish trade union. On the issue of fur production and the living conditions of mink in fur farms - a hot issue in Denmark at the moment, it is interesting to note that Løkkegaard met with the fur producers lobby whereas Dan Jørgensen met the animal protection association.


Wednesday, 16 February 2011

Commission wrong to approve Verheugen’s lobby consultancy - new ethics rules must be Verheugen-proof

The European Commission’s decision earlier this month to approve ex-Commissioner Günter Verheugen’s setting up of his own lobby consultancy firm went against the advice of the Commission’s own ethics committee. Internal documents reveal a complete lack of stringency in the approvals procedure. This underlines the urgent need to tighten the Commission’s ethics rules well beyond what is proposed in the new draft Code of Conduct for Commissioners.

In early February, journalists tipped off by the Commission reported that ex-Commissioner Verheugen had been given the go-ahead to continue his involvement in the European Experience Company, a Potsdam-based lobby consultancy firm that Verheugen and his partner and former head of cabinet, Petra Erler, founded when they left the Commission last spring. Media reported that Verheugen was asked not to lobby officials from his former Commission department (DG Enterprise) and not to work for some 400 companies that had directly benefited from decisions made by his former department. Both conditions were imposed for 26 months, ending in May 2012.

Some media referred to these as ‘strict conditions’, but this is hardly justified. The exact text, now available as the result of a freedom of information request from Friends of the Earth Europe, says that Verheugen’s lobby firm should “not provide its services to any company or person who has been the addressee or who has benefited from individual decisions, grants or contracts prepared or handled by the Commission’s Directorate General “Enterprise and Industry” during Mr Verheugen’s time as Enterprise Commissioner.

Paul de Clerck (Friends of the Earth Europe), speaking on behalf of the ALTER-EU coalition during a debate on conflicts of interest in Brussels, pointed out that this means that Verheugen is allowed to lobby any other Commission department, including DG Environment, DG Internal Market and many others which are all of interest for potential clients. As Enterprise Commissioner, Verheugen was involved in decisions on numerous issues that went beyond his own department, which means the restrictions are far too narrow. And only companies that have directly “benefited from individual decisions, grants or contracts” are off-limit as clients.

Not only are these restrictions narrow, they are virtually impossible to monitor, let alone enforce. The sad conclusion must be that the Commission has de facto given the green light to one of its most powerful former Commissioners to move straight into lobbying consultancy after his departure from the Commission, assisting wealthy firms to influence EU decision-making. It has shied away from blocking Verheugen from cashing in on the insider knowledge and the network that he developed while in the Commission.

The Commission in fact had every reason to block Verheugen’s involvement in the European Experience Company. Internal documents on the approval procedure reveal that the Ad-hoc Ethical Committee had advised against approving Verheugen’s consultancy.

The Ethical Committee had concluded: “it is inevitable that such a wide activity could at some point directly intersect with the scope of the Commissioner’s former activity, in a manner which could not be dealt with by abstaining on a case-by-case basis. […] As presently so indiscriminately described, the considered activity cannot be viewed as in conformity with article 245(2)” (of the EU Treaty).

The Commission overruled this. It first went back to Verheugen, requesting more information about his role in the company, which Verheugen refused to give. Throughout this controversy, Verheugen has claimed that the Code of Conduct does not apply to him because he is not employed by the company, but co-owns it, arguing it is therefore not an ‘occupation’ (the term used in the Code of Conduct for Commissioners). The Commission at least ignored this flawed argument.

Given Verheugen’s failure to provide any further clarification, the only logical conclusion would have been for the Commission to reject Verheugen’s involvement in the European Experience Company, as the Commission had previously done in the case of McCreevy’s planned job with investment firm NBNK.

It took Verheugen three weeks to even respond to the Commission’s request for more information. There was then a time gap of almost two months until the Commission made its decision on the case, on January 31st. The internal documents do not show what happened during these 7-8 weeks, whether perhaps the Commission tried to convince Verheugen to voluntarily pull out of the company, as it had done with McCreevy and NBNK (where the Ethical Committee had also given negative advice). Perhaps Verheugen simply refused to cooperate. The current Code of Conduct does not provide the Commission with any form of sanction it could use to force Verheugen to comply (except for the ultimate option of court case).

This unsatisfactory outcome of the Verheugen case underlines the need for the Code of Conduct for Commissioners to be urgently overhauled. In a recent report, the ALTER-EU coalition has called for “a general ban on lobbying and lobby advice for at least three years” and “a genuinely independent ethical committee that actively investigates potential conflicts of interest regarding ex-Commissioners’ new employers, with effective sanctions to enforce its decisions”.

Meanwhile the European Parliament has started assessing the draft Code of Conduct. When Commission President Barroso met the heads of the political groups in the European Parliament last week, several of the MEPs insisted on far stricter rules and demanded that the Parliament should be involved. Rebecca Harms of the Greens, for instance, said that “a mere cosmetic revision, which is decided on by the commissioners themselves, simply will not fly. For this reason, we want to ensure the full involvement of the European Parliament in the revision”.

In December MEPs were expecting a full decision-making role on the new Code of Conduct, via a report that would be voted on in the Budget Control Committee and in plenary. Even the name of the rapporteur had been discussed. It appears that the Commission preferred a more limited role for the Parliament, only involving the Conference of Presidents. After they met last week, the process has been broadened to include a discussion in the Conference of Committee Chairs; a plenary vote might follow.

During the debate hosted by ALTER-EU and the European Journalism Centre earlier this month, prominent MEPs voiced strong criticisms of the current Code and the Commission’s proposed revisions. MEP Lothar Bisky (United Left), a member of the Conference of Presidents, demanded a three-year cooling-off period. Irish Social Democrat MEP Nessa Childers called for transparency around the new jobs of former Commissioners and for effective sanctions to be introduced, such as withholding part of the ex-Commissioners’ pension. German Christian-Democrat MEP Inge Grässle argued that the Code should be replaced by a proper regulation, which would allow for enforcement by a prosecutor. Let’s hope that the Commission will listen to the solutions proposed by these and other MEPs.