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Revolving Doors in Brussels

In March 1999, an independent investigative committee [1] accused the European Commission of having lost control of an increasingly corrupt bureaucracy, which led to the fall of the Santer Commission. Only three months later, acting Industry Commissioner Martin Bangemann caused another scandal by announcing that he would move to the executive board of Spanish telecommunications giant Telefónica. But indignation at these scandals turned out to be short-lived. When two of Mr. Bangemann's former colleagues also moved to the corporate world, Brussels remained silent. The revolving doors in Brussels are still wide open...

The Bangemann Transfer

On 1 July 1999, acting Industry Commissioner Martin Bangemann announced that he planned to join the Board of Directors of Spanish telecommunications giant Telefónica, and that he wanted to resign from his duties in the European Commission. Jubilant Telefónica chairman Juan Villalonga nicknamed Bangemann "our Ronaldo", comparing the move of the former Commissioner with the transfer of a highly praised football player. Bangemann's move was condemned by his colleagues. The Commission said the correct way to approach taking up such a job would be to resign first and to negotiate the new job afterwards. Bangemann was dismissed from his function, and his duties were taken over by Competion Commissioner Karel van Miert. Although Bangemann wanted to start at Telefónica as soon as possible, he was told to wait until the Commission had decided how to handle his 'unprecedented move'.

Bangemann's move was blunt and over-hasty, but it was not at all unprecedented. The Commission has a long tradition of 'revolving doors' to top positions in the private sector and vice-versa. Examples include former Commissioners Etienne Davignon (now Société Générale), François Ortoli (afterwards CEO of Elf) and Peter Sutherland (now British Petroleum and Goldman-Sachs) or Pirelli's Ricardo Perissich who used to be Industry Director-General in his former job at the European Commission. Bangemann may have thought of these predecessors, when at a press conference a few days after announcing his move, he stated that "it would be hard to prove a conflict of interests."

However, Martin Bangemann had been responsible for EU information and telecommunications policies since 1992 and his relationship with Telefónica dates back to at least 1994. In that year, he included Telefónica's then chairman, Cándido Velázques-Gastelu, in the so-called "Bangemann High Level Group on the Information Society". [2] In a quick damage-control operation, the Council of Ministers officially dismissed Mr. Bangemann from his duties as acting Commissioner on July 9th. According to the judgeme nt of the Council, Bangemann had failed to fulfill his obligations under Article 213 of the EU Treaty, especially the obligations to "honesty and discretion"; [3] he should never have accepted a position in the Telefónica Board of Directors. In line with the provisions of the Treaty, the Council brought a case before the European Court of Justice to suspend Bangemann's pension rights if he joins the executive board of Telefónica. The court case was trumpeted loudly by the Council in July. A few months later, when the case was withdrawn on the basis of some empty promises by Bangemann, [4] the Council found it convenient not to issue any press release.

A Code of Conduct for Commissioners

In another attempt to save the face of the Brussels institutions, the designated Commission of Romano Prodi had published a Code of Conduct for Commissioners on 17 July 1999. [5] The most important innovations in this code are an obligation for Commissioners to declare their financial interests and assets in detail and the introduction of a 'cooling down period' of one year after the resignation of Commissioners, during which they may not engage in occupations related to issues that fell under their responsibility in the Commission. When needed, an "ad hoc ethical committee" will decide if there is a breach of the obligations under article 213(2) of the EU Treaty.

This anemic Code of Conduct cannot be considered a serious attempt to close the revolving doors between the European Commission and the private sector. The one year cooling down period is too short, especially when one takes into account that Commissioners receive up to 65% of their former income over a period of five years after stepping down from their public function. [6] Furthermore, the Code of Conduct doesn't specify any new sanctions beyond those already contained in the EU Treaty (withdrawal of pension rights and transitional payments).

The Code served well to take the sting out of the debate in the European Parliament on the 21st July. At this first session of the newly elected Parliament, many MEPs strongly criticised the 'Bangemann affair', [7] and the Parliament adopted a resolution condemning Bangemann's move. However, no amendmends to the draft Code of Conduct were proposed, and when the Council withdrew its case against Bangemann in December, the Parliament remained silent.

Back to Business as Usual

Some of Mr. Bangemann's former colleagues seem to have interpreted the mild treatment he received and the lack of will in the European Parliament to address this form of corruption as a signal to follow in his footsteps and pass through the revolving doors into the corporate sector. On October 1st 1999, US investment bank Warburg Dillon Reed (a subsidiary of Swiss megabank UBS) announced that Sir Leon Brittan (former Trade Commissioner) would soon become its vice-chairman. [8]

As Trade Commissioner, Sir Leon had been responsible for negotiating the WTO agreement on financial services -- an agreement designed to improve market access for banks and other financial players in the 'emerging markets' of the South. During these negotiations, Brittan worked closely with the influential Financial Leaders Group, of which UBS is an active member. [9]

More recently, it was announced that former Competition Commissioner Karel van Miert is expected to join the advisory boards of both Philips Electronics [10] and Swiss-based aviation group SairGroup [11] in the spring of 2000. When in office, Van Miert took several decisions directly affecting both companies. Considering these facts, there is a shocking lack of political will, both in the Commission and the European Parliament, to stop the blurring of borders between business and politics and to close the revolving doors once and for all. Less than a year after the fraud and corruption crash of the Santer Commission, it seems Brussels is 'back to business as usual'.


1. Committee of Independent Experts, "First Report on Allegations Regarding Fraud, Mismanagement and Nepotism in the European Commission", 15 March 1999.  | Back to Text |

2. Members of the High-Level Group on the Information Society: Martin Bangemann (European Commission), Enrico Cabral da Fonseca (Campanhia Comunicaçaoes nacionais), Peter Davis (Reed Elsevier), Carlo de Benedetti (Olivetti / ERT), Pehr Gyllenhammar (Volvo / ERT), Lothar Hunsel (T-Mobil), Pierre Lescure (Canal+), Pascual Maragall (mayor of Barcelona), Gaston Thorn (Cie. Luxembourgeoise de Telediffusion / CLT), Cándido Velázquez-Gastelu (Telefónica / ERT), Peter Bonfield (ICL), Etienne Davignon (Société Générale de Belgique / ERT), Jean-Marie Descarpentries (Bull), Brian Ennis (IMS), Hans-Olaf Henkel (IBM Europe), Anders Knutsen (Bang & Olufsen), Constantin Makropoulos (Hellenic Information Systems), Romano Prodi (IRI), Jan Timmer (Philips Electronics / ERT ), Heinrich von Pierer (Siemens / ERT). Please note that this information relates to the year 1994. As indicated, 6 of the 20 members of the Bangemann Group also belonged to the European Roundtable of Industrialists.  | Back to Text |

3. Art 213 (2) of the "Consolidated Version of the Treaty Establishing the European Community": "The Members of the Commission may not, during their term of office, engage in any other occupation, whether gainful or not. When entering upon their duties they shall give a solemn undertaking that, both during and after their term of office, they will respect the obligations arising therefrom and in particular their duty to behave with integrity and discretion as regards the acceptance, after they have ceased to hold office, of certain appointments or benefits. In the event of any breach of these obligations, the Court of Justice may, on application by the Council or the Commission, rule that the Member concerned be, according to the circumstances, either compulsorily retired in accordance with Article 216 or deprived of his right to a pension or other benefits in its stead." | Back to Text |

4. The case against Bangemann was withdrawn on 17 December 1999, on condition that Bangemann would also withdraw his case against the Council. The Council justified its decision by referring to the promises that Bangemann made in a letter to the Council dated 10 December 1999, namely that he would not join the 'consejo administrativo' of Telefónica before 1 July 2000 (thus complying with the 1 year 'cooling off' period in the new Code of Conduct for Commissioners), that he would not represent the interests of third parties (including Telefónica) at the EU institutions until 31 December 2001 and not make use of any confidential information that he had access to as a Commissioner.  | Back to Text |

5. The Code of Conduct came into force when Romano Prodi's new Commission came into office (18 September 1999). The provisions of the Code of Conduct do not bind members of previous Commissions.  | Back to Text |

6. Article 7 of Regulation No 422/67/EEC, No 5/67/Euratom, amended in Regulation (ECSC, EEC, Euratom) No 1546/73 of the Council of 4 June 1973.  | Back to Text |

7. Minutes of the plenary debate in the European Parliament on the position of Mr. Bangemann, Brussels 21 July 1999. Available on the EP web site.  | Back to Text |

8. "Sir Leon Brittan to join Warburg Dillon Read as Vice Chairman", Warburg Dillon Reed press release, 1 October 1999.  | Back to Text |

9. For more info on the Financial Leaders Group, see: - "WTO Millennium Bug: TNC Control over Global Trade Politics", CEObserver, Issue 4, July 1999; - "Europe Inc.: Regional and Global Restructuring and the Rise of Corporate Power", Balanyá [... et al.], Pluto Press, London, 2000.  | Back to Text |

10. Philips press release, 17 February 2000. As Competition Commissioner, Van Miert investigated the techno-lease construction, a sophisticated construction through which Philips received massive Dutch government funding. In the end, Van Miert approved the construction.  | Back to Text |

11. SAirGroup press release, Zurich, 6 March 2000. According to the press release "Karel Van Miert is a leading authority on European market and competition issues". | Back to Text |

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