Wednesday, 9 November 2011

Gifts, shares and other loopholes – the MEP code of conduct

If a week is a long time in politics, then it appears that seven months is a veritable aeon. That's how long it has been since the Sunday Times exposed the cash-for-influence scandal which engulfed three MEPs and caused some soul-searching in the EU's only elected institution. But the shock and embarrassment that this caused seems to have faded into the distant past, at least for some Members.

MEPs on the Parliament's constitutional affairs committee are getting ready to vote on the new code of conduct, which was drafted as a response to the scandal and which is supposed to usher in a new wave of transparency and accountability among MEPs. Yet judging by some of the amendments which have been tabled, the original good intentions appear under threat.

Several problematic amendments have been tabled by Charles Tannock MEP, a British conservative. He proposes diluting the requirement on MEPs to declare shareholdings so that they would only need to declare those which consist of 15 per cent of the issued shares or where the shares' value exceeds one year's salary. An MEP earns about 84 000 euros a year, so this would potentially allow some Members to avoid declaring significant financial interests. Tannock's amendment significantly weakens the original text which calls upon MEPs to declare any shareholding which had “potential public policy implications” which presumably would cover practically all shareholdings.

But Tannock's interest in this amendment makes more sense if you look at his current declaration of financial interests. This was updated on 19 October and Tannock makes clear that, in addition to his previous declarations of unpaid directorships at the 3Legs group of companies, he also is a shareholder at 3Legs Resources (an oil and shale gas exploration company). Tannock does not reveal the value of these shares.

Tannock has tabled a further amendment, similar to that drafted by another British MEP, Andrew Duff, which would exclude hospitality from the definition of gifts. Under the new code, MEPs would be banned from accepting gifts worth more than 150 euros. The Tannock/ Duff amendments would mean that MEPs could continue to accept accommodation and other hospitality without limit. Yet hospitality in the form of good dinners and nights away are an important instrument in a lobbyist's toolbox.

Tannock himself declared an all-expenses paid trip to Taiwan (May 2011) paid by the Taiwan government office in Brussels, and a three-night stay in Jerusalem (February 2011), paid by European Friends of Israel. Under the Tannock/ Duff amendments these would be allowed; under the original, MEPs would no longer be able to accept such largesse.

Duff argues that, without his amendment, the 150 euro limit would deter MEPs from attending conferences because hotel rooms tend to cost more than this. But for important conferences, MEPs' official allowances could cover the costs, with the benefit that MEPs would not be seen to be 'indebted' to the organisation that had picked up their tab.

There are other amendments which also seek to weaken the draft code of conduct. A group of Italian MEPs have tabled amendments which would delete huge swathes of the code, on the grounds that the current rules which apply are adequate enough. But judging by the scandal in March, this is patently not true.

But even the amendments tabled by Tannock and Duff would break the cross-party consensus which agreed the draft code back in July, and would weaken it significantly. Elected MEPs should be open and transparent about their outside financial interests and they should be held to account over their conflicts of interest. The proposed code of conduct for MEPs is not perfect, but it does represent an important step forward in terms of ethics regulation within the Parliament.

At a time of falling public confidence in the EU institutions, MEPs should be doing all that they can to promote transparency and accountability. Some MEPs may have forgotten the cash-for-influence scandal in March, but European voters may have better memories.


Catherine said...

"An MEP earns about 84 000 euros a year" this is not correct: an MEP earns 7,956.87 Euro gross per month PLUS an "allowance" of 4,299 per month (not taxed), PLUS 304 as a "subsitence allowance" for days of presence at official meetings. Without the latter, the MEPs earn 134,815 Euro a year.

Charles Tannock said...

Ms Cann I think has misunderstood the purpose of my amendment to the declaration of financial interests of MEPs, which sadly did not get passed by the Parliament. It was a direct readover of the rule which exists in the UK House of Commons and was intended to bring more clarity for MEPs who own shares in companies. The new rule which is now in place by referring to "public interest" is totally subjective and open to an MEP's own interpretation of what that means, so some MEPs will declare everything, and others nothing. Furthermore, to put the record straight, my shareholdings in 3 Legs Resources, including my options, would be more than one year's salary, and therefore I would have to declare them under my proposal, so any suggestion that this amendment was designed to protect my own interests is clearly false. I will be re-declaring my shareholdings and options in 3 Legs under the public interest clause, but we will need, as MEPs, much more guidance as to what that means.