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Lobbying Transparency Key to Bridging the EU's Democratic Gap

Corporate Europe Observatory, June 2006

In May 2006 European Commissioner Kallas presented a Green Paper with proposals for how to improve the “visibility” around the activities of the estimated 15,000 lobbyists in Brussels.[1] While the Commissioner deserves praise for taking up these issues within the European Transparency Initiative, the proposals in the Green Paper are seriously inadequate.

Since early 2005, an intense and unprecedented debate has raged about the pros and cons of transparency and ethics obligations for lobbyists working to influence European Union decision-making. European Commissioner Siim Kallas kick-started the debate with a major speech in March 2005. Pointing out that there is "no mandatory regulation on reporting or registering lobby activities" and that "registers provided by lobbyists' organisations in the EU are voluntary and incomprehensive", Kallas announced that he would launch the European Transparency Initiative.[2]

Whereas different systems of mandatory lobbying disclosure exist in the US and Canada, as well as in new EU member states like Lithuania and Poland, EU lobbyists in Brussels face no such obligations. Clubs of Brussels-based lobbying consultants like the Society of European Affairs Professionals (SEAP) have had voluntary codes of conduct in place for almost a decade, but these – among other flaws - do not include any commitments to external transparency.[3] As a result, EU lobbying is shrouded in secrecy. One industry insider estimates total spending on corporate lobbying in Brussels to be between 750 million and 1 billion euro per year, but in the absence of reporting requirements exact information is lacking.[4]

Ever since Commissioner Kallas announced the European Transparency Initiative in a surprise speech in March 2005, SEAP and other interest groups representing lobbying consultancy giants like Burson-Marsteller and Hill & Knowlton have lobbied fiercely to make the Commission move away from the idea of compulsory transparency. These groups argue that there is no reason to change the status quo as they have never found any violations of their voluntary codes of conduct. While claiming to promote high ethical standards, the groups are in denial about any concerns raised about EU lobbying and downplay and ridicule the critique of deceptive lobbying practices such as that of Campaign for Creativity (C4C), a Microsoft front group.[5] In stark contradiction with the rosy picture of corporate lobbying world in Brussels portrayed by groups like SEAP, lobbying veteran Daniel Guéguen last year warned that: “in the future […] we will tend to adopt ever tougher lobbying strategies […] that will probably involve practices such as manipulation, destabilisation or disinformation.”[6]

A decisive moment in the debate came earlier this year when the US scandal around Abramoff - the Washington-based super-lobbyist now facing criminal charges for fraud and corruption[7] – brought up the obvious question: could it happen in Brussels? A survey showed that more than 40% of lobbying consultants believe an Abramoff scandal could indeed happen in Brussels.[8] Commissioner Kallas could have used this opportunity to gather support for moving beyond voluntary codes of conduct. Unfortunately, he reached the opposite conclusion, arguing that the Abramoff scandal shows that mandatory lobbying disclosure does not prevent scandals.[9] Using the Abramoff scandal as an argument against more effective transparency and ethics rules is clearly a missed opportunity. The reality is that the Abramoff scandal may never have been discovered if it wasn’t for the legal obligation to disclose lobbying contracts which exists in the US.[10] An Abramoff-style scandal in Brussels, where such transparency obligations are entirely lacking, might simply never be discovered. While transparency rules may not be sufficient to prevent all scandals, they are absolutely necessary, particularly in a political construct as complex as the European Union, with 450 million citizens who must be given optimal possibilities to monitor who influences the distant institutions making decisions on their behalf.

On May 3rd the European Commission presented a long-awaited Green Paper with concrete proposals for how to shape the European Transparency Initiative. The good news is that the Green Paper acknowledges a number of "potential problem areas" around EU lobbying. It for example refers to the widespread concern that "there is no level playing field in lobbying because the corporate sector is able to invest more financial resources in lobbying."[11] The Green Paper also states clearly the Commission’s position that "When lobby groups seek to contribute to EU policy development, it must be clear to the general public which input they provide to the European institutions. It must also be clear who they represent, what their mission is and how they are funded."

The bad news is that the concrete proposals in the Green Paper fail to match this important objective. The Commission proposes a voluntary transparency register with a very weak incentive: those who register will receive automatic email alerts about upcoming consultations. This seems entirely insufficient to secure meaningful levels of compliance. Also the Green Paper's proposal of a voluntary ethics code is hardly convincing. Leaving the writing of a code of conduct to the lobbyists themselves will predictably result in the lowest common denominator. Also, monitoring of compliance cannot be left to the lobbyists themselves due to obvious conflicts of interest. All in all, the proposals are a seriously inadequate response to the concerns about the role of corporate lobbying in EU decision-making.

While the commercial lobbyists’ clubs were predictably pleased with the Green Paper,[12] civil society groups (including those united in the Alliance for Lobbying Transparency and Ethics Regulation - ALTER-EU) and numerous Members of the European Parliament criticised the Commission’s lack of ambition and political will.[13] In late May, moreover, the Danish Parliament unanimously approved a resolution calling for a "mandatory and publicly available register of lobbyists that seek to influence the European Commission and other EU institutions".

ALTER-EU has pointed out that the Commission has not only failed to propose effective measures to secure lobbying transparency, the Green Paper also does not include any proposals to limit Commission officials going through the revolving door to industry lobby groups or lobbying firms. The Financial Times recently reported that some 100 Commission civil servants have gone on time-unlimited 'sabbaticals' to the private sector just in the last few years.[14] Also the issue of privileged access and undue influence granted to corporate lobbying groups is not addressed in the Green Paper.

After a three-month period of stakeholder consultation,[15] the Commission will in the autumn decide the final shape of the European Transparency Initiative. The stakes are very high: this decision will de facto determine the situation around EU lobbying for the coming decade. If there is any place on earth that needs to secure visibility around lobbying, then it is EU capital Brussels where policies are decided for 450 million citizens, most of whom feel far removed from and uninformed about EU decision-making.

Rather than copying the transparency models that have been developed in Canada, the US and elsewhere, the EU should create its own state-of-the-art online lobbying transparency system. While registration and reporting about objectives, sources of income, and the interests represented should become de facto obligatory for all EU lobbyists (through a mix of incentives and sanctions), such a system can be down at low costs and without bureaucracy by using advanced technology. In order to enable democratic scrutiny of inputs into EU policy-making, this information should be fully available to the EU public, in a user-friendly format (an on-line, fully searchable database). The current secrecy around EU lobbying is a fundamental part of the EU’s democratic deficit. The European Commission must realise that the credibility of the EU institutions is at stake and that it cannot afford to miss this crucial opportunity for democratisation.

Notes

  1. Green Paper on a European Transparency Initiative, May 2006.
  2. The need for a European transparency initiative, European Commission Vice-President Siim Kallas, speech held at The European Foundation for Management, Nottingham Business School Nottingham, 3 March 2005.
  3. See for instance Transparency in EU decision making: reality or myth?, Friends of the Earth Europe, May 2006.
  4. Simon Titley (former staff member of government relations consultancy Burson-Marsteller), “The rise of the NGOs”, in the Handbook of Public Affairs, Sage Publications, June 2005.
  5. With 7035 votes, C4C won the 'Worst EU Lobby' Award 2006, a sweeping 85% of the votes cast. See http://www.eulobbyaward.org/nominees/c4c.html.
  6. PA veteran calls for professional body to scrutinise Brussels lobbyists, Euractiv.com, 3 May 2005.
  7. See for instance Abramoff Plea: Digging Up K Street, Alex Knott, The Centre for Public integrity, January 6 2006.
    Jack Abramoff, Admitted Felon and Former Super-Lobbyist, Public Citizen.
  8. “EU poll shows lobbyists fear tougher rules“, Public Affairs News, April 2006.
  9. Commissioner Kallas for instance made this argument during the press conference on May 3rd when he presented the Green Paper on the European Transparency Initiative.
  10. "Lobbying Reform: This Year’s Failure on Two Continents", Craig Holman, in forthcoming book to be published by the European Centre for Public Affairs (July 2006).
  11. Green Paper on a European Transparency Initiative, May 2006.
  12. Commission Green Paper leaves sufficient scope for selfregulation by EU lobbyists, SEAP press release, May 3 2006.
    Public affairs consultancies welcome European Commission proposals, EPACA press release, May 3 2006.
  13. The Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU) is a coalition of over 140 civil society groups, trade unions, academics and public affairs firms. ALTER-EU reacted with the press release EU fails to develop credible transparency rules
  14. “Open-door policy“, Financial Times, May 5 2006.
  15. The online consultation on the European Transparency Initiative closes on 31 August 2006.