At its meeting on 15 April 2015, the Commission authorised Siim Kallas to become a consultant at Nortal, as long as he “fulfilled, in all circumstances, his obligations under Articles 245(2) and 339 TFEU and the Code of Conduct for Commissioners, and in particular that he proceeded with integrity and discretion and protected collective responsibility and confidentiality in respect of matters covered by the Commission during his terms of office, and refrained from lobbying the Commission and/or its departments on behalf of Nortal within eighteen months of leaving office.” Documents relating to the Commission's authorisation of this role are here.
The Commission has previously authorised Kallas in these additional roles: lecturer in international finance in the faculty of economics of the University of Tartu (Estonia); special adviser to Commissioner Valdis Dombrovskis to provide strategic and political advice on the future of EMU and economic relations with Eastern neighbourhood; and visiting professor for European transport policy at the Tallinn university of technology. Documents relating to the Commission's authorisation of his academic roles can be found here.
Siim Kallas was previously a member of Parliament and a former prime minister of Estonia. He then became a European commissioner for 10 years, latterly for transport but initially for administrative affairs, audit and anti-fraud where he set up the European Transparency Initiative (ETI) which ultimately led to the first Commission lobby register in 2008.
The aim of the ETI was to “increase openness and accessibility of EU institutions, raise awareness over the use of the EU budget and make the Union’s institutions more accountable to the public” with the intention to promote transparency in EU policy-making. In his speech at the launch of the ETI in 2005, Commissioner Kallas himself commented that:
“Lobbyists can have considerable influence on legislation, in particular on proposals of a technical nature... But their transparency is too deficient in comparison to the impact of their activities.”
In a separate speech to the European Parliament in 2007, Commissioner Kallas said:
“Nobody would pay real money for lobby without expecting "something" in return – and that "something" is influence!”
The Alliance for lobbying transparency and ethics regulation (ALTER-EU), which CEO co-founded, was launched as a response to the ETI. While ALTER-EU welcomed the then Commission's focus on transparency, the lobby register which resulted and its successor versions have been disappointing and remain the subject of a major campaign.
Since leaving the Commission in October 2014, Kallas has been authorised to accept a number of new roles: consultant to Nortal; lecturer in international finance in the faculty of economics of the University of Tartu (Estonia); special adviser to Commissioner Valdis Dombrovskis; and visiting professor for European transport policy at the Tallinn university of technology.
Kallas has Commission authorisation to act as a consultant to Nortal to "to participate in projects promoting good governance practices in countries outside EU". Kallas also told the Commission:
"In the field of Good Governance, Nortal has helped different governments (Qatar, Oman, Estonia, Finland, Lithuania, Nigeria, Botswana, Moldova etc) to provide better services for their citizens and businesses and to move closer to the objective of seamess society. The focus areas in the Good Governance practice are ease of doing business, ease of living, public finance management and infrastructure".
Nortal is “an international high-end software development solutions provider in public and private sector” and perhaps the biggest IT services company in the Baltic region. Its clients include those from the public and private sectors including those in the oil, banking, telecoms and manufacturing sectors. It is also active in the logistics sector, with its website reporting that
“Nortal is a reliable and innovative partner for the largest harbour operators and industrial enterprises in Finland”.
Nortal was established in 2000 by Estonians Priit Alamäe, Urmo Pärg and Avo Alender under the name “Webmedia”; it was later renamed Nortal. Today it is most active in Finland, but it also has offices in Lithuania, Serbia, Russia, Romania and Oman, as well as being active in Nigeria, Qatar, Libya and elsewhere. In 2012, Priita Alamäe has been appointed by the Estonian ministry of economics as "ambassador on IT matters to Middle East and Africa" with the task of promoting Estonian exports there. Nortal's turnover was approximately €36 million euros in 2013, although it has posted an overall loss in recent years.
Nortal is not part of the EU lobby transparency register.
See below update on Kallas' role at Nortal.
Special adviser to Commissioner Dombrovskis
Kallas is now a special adviser to Commissioner Valdis Dombrovskis who is responsible for the Euro & Social Dialogue within the college. Kallas advises on the areas of “strategic and political advice on future of EMU, economic relations with Eastern neighbourhood”. Kallas' own website makes clear that this work is unpaid
“but the travel expenses will be paid in case of need. “I can be used a maximum of 25 days per year. It will certainly involve a few trips to Brussels, and perhaps elsewhere. The schedule is flexible and does not interfere with my other duties.””
In this role, he must provide a CV and a declaration of honour which are available on the Commission's website; the CV does not mention Kallas' consultancy to Nortal which was authorised by the Commission subsequent to his special adviser role being announced. The declaration of honour commits all special advisers to
“carry out duties impartially and objectively ... not to take instructions from any government, authority, organisation, person outside the Commission … not to deal with any matter in which, directly or indirectly, he/she has any personal interest such as to impair his/her independence”.
Another current Commission special adviser has links to Nortal. Taavi Kotka, a special adviser to Commissioner Ansip on “digital single market issues and on e-governance in particular” is the former CEO of Nortal (2006-11), was a member of the management board 2011-12, and was head of development 2000-06. He left Nortal in 2012 and sold his shares.
CEO has expressed concerns about the external interests of some past and present special advisers, including Jan Eric Frydman, an adviser to trade commissioner Cecilia Malmström. CEO has requested via access to documents all 'statements of assurance' and 'declarations of activities' for all special advisers as these are not currently published.
Estonian MEP Indrek Tarand has now tabled parliamentary questions on this revolving door case.
The Commission's rules
The current code of conduct for commissioners says that when they leave office they must abide by an 18 month notification period, during which time they must seek Commission authorisation for any new professional activities. The code further stipulates that the Commission should seek the view of its ad hoc ethical committee if the new professional activity is related to the commissioner's former portfolio. All commissioners are banned for 18 months from lobbying “members of the Commission and their staff for his/her business, client, or employer on matters for which they have been responsible”. The lobby ban is waived when former commissioners take up public office. In CEO's view, there are several loopholes and problems with these rules. The notification and lobby ban periods are far too short; lobbying is not defined; and the targets and content of proscribed lobbying are too narrowly-drawn.
As an ex-commissioner, Kallas is entitled to a very generous transitional allowance after leaving the Commission of between 40 and 65 per cent of final basic salary for the three years after he has left office. In addition, the transitional allowance scheme provides for commissioners to earn up to a further €9000 (approximately) a month from other sources without their pay-out being affected. In CEO’s view, the transitional allowance, the purpose of which was to enable ex-commissioners to not have to seek out immediate new employment, and thus avoid the risk of possible conflicts of interests, clearly needs to be reformed.
Before publishing this statement, we contacted Siim Kallas via the universities of Tartu and Tallinn for a response to some questions but no response was received.
Update 9 September 2015
Mr Kallas has now replied to an email from CEO to say:
In June I had some speeches in Oman about Estonian experience of good governance. This was intended to help IT company Nortal to sell their IT solutions in this country. These activities have nothing to do with my role as advisor to Mr. Domrovskis. My contract with Nortal was terminated as from the 6th of August 2015, about what I informed the European Commission. I have never lobbied for Nortal in European institutions.
Update 28 October 2015: You can read our new report The revolving doors spin again, Barroso II commissioners join the corporate sector on our website. The report includes this case and many others, analyses all the revolving door moves of the Barroso II Commission and includes a spreadsheet which collates all known information about the 100 plus new roles of the former commissioners.
“This case is a good example of how the revolving door blurs the distinction between being inside and outside of the EU institutions in the Brussels bubble. Kallas was a senior EU commissioner for 10 years; then he left; then he rejoined as a special adviser; and now he also been authorised to take a role with one of the Baltic states' biggest IT companies. CEO considers that all former commissioners should receive a three year lobby ban, to match the transitional allowance time period.”