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Conflict of interest: EU still not tackling the revolving door of commissioners into private sector

As the Barroso II Commission prepares to leave office, it is time to make sure that the European Commission’s revolving door rules are fit for purpose, otherwise the EU risks walking straight into another round of conflicts of interest scandals – says writes Vicky Cann

Do you remember Verheugen, McCreevy, Borg, Michel, Ferrero-Waldner and Kuneva? Seasoned Brussels-watchers may recall that they were all commissioners in the Barosso I Commission – and that they also subsequently had spins through the revolving door into corporate jobs, which raised the risk of possible conflicts of interest. Günter Verheugen was the former European Commissioner for Enterprise and Industry, who founded the European Experience Company – a consultancy firm together with his former head of cabinet Petra Erler. Charlie McCreevy was the European Commissioner for the Internal Market, who was refused authorisation to join one bank but then joined another – BNY Mellon – once his notification period of 12 months had expired.

He also joined the boards of Ryanair and Sentenial too. Meglena Kuneva joined the board of BNP Paribas; Ferrero-Waldner went to Munich Re; Louis Michel joined Credimo – a Belgian mortgage company – and Joe Borg joined lobby consultancy Fipra. All these moves received the authorisation of the European Commission except for BNY Mellon, which did not require it. At the time, these revolving door cases provoked significant outrage and media comment. The risk of conflicts of interest, which arose in each case, did not seem to be adequately addressed by the rules in place at the time or the way in which they had been applied. Ultimately, the commission was forced to take action.

Not long after, it published a revised code of conduct for commissioners. This included somewhat tougher rules on the revolving door including an 18-month ban on former commissioners undertaking lobbying on issues for which they had been directly responsible. This was a step forward, yet numerous loopholes remain in the revised rules and the Alliance for Lobbying Transparency and Ethics Regulation has this week written a letter to commission president José Manuel Barroso to urge him to toughen up the code further.

The ALTER-EU believes that the 18-month ban on lobbying activities should cover all issues for which the Barroso II Commission has taken collective decisions, as well as all issues dealt with by the individual commissioner. It should also be extended to three years; otherwise, and as McCreevy demonstrated, ex-commissioners can simply sit-out the ban period and take an allegedly problematic job as soon as it ends.

The ban on lobbying should also be defined in more detail. In 2010, Verheugen who set up his consultancy company, was able to deny that the company carried out lobbying, even though the company’s website offers to advise clients on strategies for dealing with European institutions. A definition of lobbying needs to be clearly spelled-out within the revolving door rules and should include both direct and indirect public affairs work such as the provision of lobbying advice, as indeed the EU’s lobby register does.

Furthermore, commissioners should be banned from negotiating new roles while in office. Surprisingly, this is not currently the case and Benita Ferrero-Waldner applied for permission to join Munich Re several months before she stopped being a commissioner. These proposed rule changes probably sound like common sense but are even more essential when we are reminded that former commissioners are entitled to a generous transitional allowance of between 40 and 65 per cent of their final basic salary for the three years after they have left office.

The transitional allowance, the purpose of which was to enable ex-commissioners to not have to seek out immediate new employment, and therefore avoid the risk of possible conflicts of interests, is clearly not doing the job for which it was designed. At least one aspect of the revolving door rules should already be on Barroso’s desk. In December 2013, the European Ombudsman heavily criticised the commission for re-appointing an ex-official and now Big Tobacco lawyer as head of its ethical committee – which is responsible for advising the European Union on commissioners’ revolving-door rules.

You could not make it up. Michel Petite had been through the commission’s revolving door himself and yet was appointed to adjudicate on the revolving door moves of commissioners. Faced with the threat of an embarrassingly critical report from the ombudsman, the commission finally replaced Petite – although with another commission insider. In ALTER-EU’s view, the ethical committee needs a full revamp.

It needs replacing with a professional and fully independent ethics committee that would be responsible for the assessment of commissioners’ proposed new roles as well as other ethics issues across the commission. It should provide opinions on specific cases when asked but also investigate specific cases on its own initiative and advise on sanctions. Barroso has eight months until he, and his commission, are due to leave office; reforms to the revolving door rules are therefore extremely urgent. The clock is ticking.

Vicky Cann is a campaigner for Corporate Europe Observatory – a Brussels-based non-governmental organisation

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