Wednesday, 22 June 2011

A critical week for European ethics

This is a crucial week for European ethics, not least with an important meeting of the Buzek working group to look at a draft MEP code of conduct and the launch of the joint transparency register between the Parliament and the Commission. So it's very timely that, new draft lobbying legislation will also be launched this week in Austria, massively strengthening the law there as it relates to lobbying and conflicts of interest.

The fall-out from the cash-for-amendments scandal has been profound in Austria, the home country of Ernst Strasser MEP, one of those at the heart of the scandal, who subsequently resigned. The new draft law in Austria is dubbed 'Lex Strasser' by some, indicating at least part of its 'inspiration'.

Crucially, the new Austrian law will introduce a ban on all paid lobbying by public officials, including members of the Parliament, civil servants and ministers. This ban is directly linked to Strasser who, before being caught on tape accepting bribes, was involved in lobbying for industry clients.

In fact Strasser was brazen in his defence of his multiple financial interests, telling the undercover Sunday Times reporters: “Right now I have an excellent opportunity to get to know people, to build a network and use this for my company.” About being an MEP and a lobbyist at the same time, Strasser said: “Of course I am a lobbyist … This is a very good combination. I see it now after one year: there are many people that are competing and who need something. And when one is there as a Parliamentarian this can open doors.” Whilst an MEP, Strasser had a range of paid jobs which involved lobbying: he co-owned the consultancy firms CIN and CCE-Consulting, was employed by PR agency Hochegger and had lobbied for companies including Rail Holding and Group4Securior.

This one case shows just how vital it is that the Buzek working group which is developing a code of conduct for MEPs includes a full ban on MEP second jobs which involve lobbying or which provoke conflicts of interest. On Monday, ALTER-EU (the Alliance for Lobby Transparency and Ethics Regulation) and Transparency International held a joint press conference to put forward our common recommendations for such a code, including in the area of second jobs.

But in addition to the ban on lobby jobs, 'Lex Strasser' will be robust in other ways too. There will be a compulsory register for all lobbyists, which particularly focuses on regulating lobbying consultancies working on behalf of third parties. They must publicly state the number of clients and the total revenue earned from lobbying contracts. In a non-public part of the register, they will need to store the actual contracts signed between themselves and their clients.

Other companies must register as well, if they have their own lobbying division in-house and so must law firms and interest groups. It is compulsory for lobbyists to register and fines could be between 10 000 – 20 000 euros for non-compliance, a sum which will increase for repeat offences. In fact, unregistered consultancies that lobby would see their earnings confiscated by the state!

In the week that the European Parliament and Commission launch the new joint transparency register, much could be learnt from the Austrian proposals. New research by ALTER-EU reveals the extent of 'under-reporting' by industry lobby groups where lobbyists fail to declare their full expenditure on lobbying in an attempt to look smaller than they really are. A particularly ludicrous example is that of Fertilizers Europe which declared only 400 euros of annual lobbying expenditure from an annual budget of four million!*

Speaking about the new proposed legislation in Austria, academic and ethics expert Hubert Sickinger in an interview in der Standard said, “Anyone who does not play by the rules will be sanctioned.” And while the Lex Strasser law is not perfect, he concludes: “In continental Europe there have been mostly voluntary registers only. The Americans are stricter. But in the European context this will certainly be a law that we can be proud of”.

* Following the publication of ALTER-EU's report, Fertilizers Europe notified ALTER-EU that they had updated their entry in the register. They claimed the original entry declaring €400 expenditure on lobbying was a mistake due to a technical problem in the Commission's register.

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