Mythbusting: the Commission and the revolving door

On 11 October 2013, Antonio Gravili, spokesperson for Commissioner Maroš Šefčovič published an article on the Commission's approach to tackling revolving doors. In it he bemoaned recent coverage of revolving door cases and put forward a rosy picture of Commission action to tackle conflicts of interest.

Below, we take Mr Gravili's points and respond. In our view, Mr Gravili's article reeks of complacency and as it is 'Ethics week' in the Commission, we hope this article will provide food for thought (and a stimulus to real action) for Commissioner Maroš Šefčovič and his staff.

Antonio Gravili said: the Commission has “some of the strictest rules in the world”

The Commission has a serious problem with the 'revolving door' and as more political power becomes centred in Brussels, it seems safe to assume that the numbers of lobby consultancies, corporations and law firms keen to attract former EU officials onto their payrolls will only grow. The revolving door phenomenon can create serious conflicts of interest and undermine democratic, public-interest policy-making.

The Commission does have revolving door rules and there are many countries, including EU member states, where this is not the case. But as we point out below, the EU rules contain major flaws and loopholes which need drastic improvement. The Parliament has just recently completed a revision of the “Staff Regulations” which contain the EU's revolving door rules. The Commission's original proposal for these revised regulations did not propose any strengthening of the revolving door rules, although fortunately, MEPs did make some improvements.

As for international examples, in the US, one of President Obama’s first acts in office was to toughen up the revolving door rules with screening and two year cooling-off periods. The EU now has a cooling-off period but only for 12 months, and only for the most senior officials. Meanwhile, the UK has flawed revolving door rules but it does at least publish a list of senior officials and ministers who leave to take up new jobs and they also list the restrictions placed upon them. The new EU revolving doors rules will require the Commission to “publish annually information on the implementation of [the rules], including a list of the cases assessed”. It remains to be seen how the Commission will deliver this and whether they will publish a full and detailed list of all cases.

“Even the phrase 'revolving door' is a bit of a misnomer. It crossed the Atlantic from the US, where it really is common for people to criss-cross from public sector to private sector and back again, several times during their career. In the EU context it is more often than not simply a door. A door that closes behind officials when they leave.”

It is not unheard of for “people to criss-cross from public sector to private sector and back again, several times during their career” in Brussels. For example, see Corporate Europe Observatory's RevolvingDoorWatch and the case of Mårten Westrup. However, the revolving door is not just a problem when people “criss-cross”. RevolvingDoorWatch lists numerous examples where officials (often very senior, often with decades of EU experience behind them) have left the Commission to join lobby jobs which raise the risk of serious conflicts of interest (see: Jörgen Holmquist, Derek Taylor, Bruno Dethomas, Serge Abou to name just a few) or where they have joined the Commission from jobs which could provoke a conflict of interest (see Marcus Lippold).

Meanwhile, hundreds of officials have left the EU institutions on a temporary basis on 'sabbaticals'. In as many as one-third of sabbaticals, the officials have undertaken “commercial activities” and shockingly, some have been able to undertake lobby work with the EU institutions during this time: see the case of Magnus Ovilius. It is a step forward that under the revised Staff Regulations (to start 1 January 2014), permission will no longer be granted to an official who wishes to carry out lobbying or advocacy vis à vis their EU employer whilst on sabbatical. The Commission will need to enforce this rigorously.

Despite the slightly improved rules, the trend of revolving doors looks set to continue and expand as the Commission recruits more and more agents on temporary contracts. Such agents make up over one quarter of the Commission's workforce and they can be employed for up to six years. However, they are largely excluded from both the new and existing revolving door rules. Only contract agents deemed to have had access to “sensitive information” are screened for possible conflicts of interest when they leave. This massive loophole has allowed some very troubling revolving door cases to pass without scrutiny. For example, see RevolvingDoorWatch and the cases of Johan Gabrielsson, Darren Ennis, Isabel Ortiz, Poppy Kalesi and Fanny-Pomme Langue.

“It would be simply illegal to have a blanket ban on staff working in the one area where they have most knowledge and experience, and where by definition therefore they are most likely to find a job.”

Many civil society groups call for a tougher approach on the revolving door, including Transparency International, and none of them call for a “blanket ban”. The Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU coalition), of which CEO is a member, would like to see the introduction of a mandatory cooling-off period of at least two years for all EU institution staff members entering new external posts (three years for the most senior officials) which involve lobbying or advising on lobbying, or any other role which provoke a conflict of interest with their work as an EU official. Tough revolving doors rules would not prevent staff joining and leaving the institutions, but they would regulate those who wish to join, or who come from, specific categories of jobs ie. lobby jobs or those jobs which provoke a risk of a conflict of interest. There will be many other kinds of jobs which would not be affected by effective revolving door rules.

“What matters is whether the job would lead to a conflict of interest, or abuse of position. That is something the Commission and all other EU institutions take very seriously indeed, which is why strict rules are in place, focused on preventing such situations.”

Conflicts of interest are at the heart of this. We agree with the OECD which is careful to talk about potential conflicts of interest. This means that public authorities need to act to limit the risk of conflicts of interest rather than requiring absolute proof of an actual conflict before taking action. This is important because it means that when scrutinising potential revolving door moves, you need to think about a variety of scenarios that could happen.

CEO is part of a group of NGOs that have submitted a complaint to the European Ombudsman about how the Commission handles revolving door cases. In it, we demonstrate how, in numerous cases, we consider that the Commission has failed to adequately assess or act upon the risk of conflicts of interest: John Bruton, Mogens Peter Carl, Petra Erler, Jean-Philippe Monod de Froideville, Derek Taylor and others. We have failed to find evidence of an “exhaustive analysis” in these cases; in fact we consider that the Commission systemically fails to adequately assess revolving door cases. The Ombudsman is now investigating our complaint and is analysing a range of the Commission's revolving door cases.

As for “all other EU institutions”, while some EU agencies such as the European Food Safety Authority have made progress in tackling conflicts of interest, our recent report points out that more remains to be done. Meanwhile, the European Parliament has a Code of Conduct for MEPs which barely mentions provisions to regulate the revolving door.

“The rules are binding and mandatory. The Commission organises obligatory training on this and other ethics issues for all staff leaving the service (as well as for newly recruited staff). Any breach of rules may result in disciplinary sanctions, up to and including a reduction in pension or pension rights.”

We know of a number of cases (detailed on RevolvingDoorWatch) where the rules were not followed by ex-officials and yet sanctions were not applied; nor were the cases referred to the Investigation and Disciplinary Office of the Commission which has the (theoretical) power to impose sanctions for breaches, including on pension rights.

In 2012, as preparation for the Ombudsman complaint, we looked at some of the ethics materials that the Commission uses internally to see how staff were being informed about their revolving door obligations. We found that the rules were not explained clearly; departing officials were not automatically sent the form that they are required to fill in when they wish to apply for authorisation for a specific new activity; and that ethics training sessions only mention revolving door requirements in passing.

It seems clear to us that the Commission can and must do a lot more to promote in-depth understanding of the revolving door rules.

And as for breaches of the rules, the New York Times reported recently that Covington & Burling (a law firm, operating in Brussels and carrying out lobbying work on behalf of clients) had recruited “at least four senior European Union policy makers to the firm’s doorstep in recent months, including a top energy official, who arrived in September with a copy of a draft fracking plan that has yet to be made public.” This is a pretty serious allegation and CEO has tabled access to document requests to the Commission to try to find out what investigations it has carried out into the veracity of these accusations.

In 2011 there were 105 requests from officials asking for authorisation to work in a similar field to their work in the Commission: 80 were authorised, 24 were authorised with restrictions and conditions, and one was refused. So the Commission took some sort of intervention action in 24% of cases.

As the Commission will not release detailed information about revolving door cases, it is impossible for any of us (except perhaps the European Ombudsman) to look at these cases and evaluate how robust the Commission's assessments really are.

However, looking at RevolvingDoorWatch, we have a number of cases which date from 2011 and where there are serious questions over how they were handled, either because the rules were not followed or because we consider that the risk of conflicts of interest was not adequately addressed. These include: Pablo Asbo, Bruno DeThomas, Isabel Ortiz, Eline Post and Johan Gabrielsson.

Furthermore, Mr Gravili says that one case was rejected: that must be Serge Abou who was EU ambassador to China and then wanted to work for Huawei, a Chinese telecommunications company, with an office in Brussels. Mr Abou apparently received one of a handful of bans that the Commission has applied to a proposed revolving door post, which lasted for two years. Yet, today, after the two-year ban has ended, Abou is working as an adviser for … Huawei. This is a particularly shocking case: in 2012, Huawei was the eighth largest spender on lobbying in the EU with spending of €3 million. In May 2013, the EU's Trade Commissioner Karel de Gucht launched an “in principle” investigation into anti-competitive behaviour by Huawei and other Chinese companies. “Huawei and ZTE are dumping their products on the European market,” De Gucht said at the time. As Director General for Trade Jean-Luc Demarty apparently wrote in internal correspondence in July 2012, there are “continuing doubts about the suitability of this approval”. The Commission has banned Abou from lobbying the Commission on behalf of Huawei, yet CEO considers that this will not entirely rule out the risk of conflicts of interest in this case. Huawei can still benefit from Abou's insider know-how and for such a senior official, CEO considers that a cooling-off period of at least three years, or even a permanent ban, would have been appropriate in this specific case.

So, as the above summary shows, the Commission's current approach to the revolving door is not nearly as robust as it should be. When the improved revolving door rules come into force on 1 January 2014, they will need strong implementation, although they will remain highly flawed until the serious loopholes regarding inadequate cooling-off periods and exemptions for contract agents remain.

If the Commission really wanted to boost its reputation for tackling revolving doors, it could also overhaul the rules regarding departing Commissioners. Commissioners are powerful individuals and in 2009-10, six out of 13 of the departing Commissioners went into corporate jobs which provoked the risk of a conflicts of interest. These were: Günter Verheugen (DG Enterprise - set up own consultancy, became a senior adviser to RBS Germany and joined Fleishman-Hillard and more); Charles McCreevy (DG Internal Market - was refused permission to join NBNK Investments, but joined boards of Ryanair and BNY Mellon and more); Meglena Kuneva (DG Consumers - joined the board of BNP Paribas); Joe Borg (DG Maritime - became a lobbyist for Fipra); Louis Michel (DG Development – joined the board of Credimo) and Benita Ferrero-Waldner (DG External Relations - joined the board of Munich Re and more). For more information see: Revolving door provides privileged access

Since these revolving door moves and the public outrage that they provoked, the Commission has revised the Code of Conduct for Commissioners, and yet it remains inadequate with only an 18 month notification period. The code also mentions an 18 month ban on lobbying although this is not watertight (it only covers areas directly covered by their previous mandate as Commissioner) and there is no definition as to what is meant by lobbying. With the change in the college of Commissioners due in 2014, it is time for the Commission to take urgent action to prevent a repeat of these kinds of scandals. CEO is working with ALTER-EU to challenge the revolving door and to demand that it is effectively regulated. Together we demand a revised Code of Conduct for Commissioners to include a three year cooling-off period for Commissioners taking lobby jobs and a revamped Commission ethics committee.

Otherwise we fear that 2014 will be the year of the revolving door.