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Arlene McCarthy

Former employer: 
European parliament
Former function: 
Member of European parliament (for 20 years)
New function: 
Deputy chair for European strategy
New employer: 
Sovereign Strategy
Nationality: 
UK
Policy area: 
Date of Revolving Door: 
July, 2014
Institutional reaction: 

None. There is no regulation requiring former MEPs to seek authorisation for their subsequent professional activities.

Other info: 

Arlene McCarthy was a Labour MEP for 20 years until she stepped down at the 2014 European elections. For the past five years, she was vice-chair of the European parliament's committee on economic and monetary affairs and she produced detailed reports on banking reform, insider dealing and on a range of other topics. In 2014, she received a parliamentarian of the year award for her work in economic and monetary affairs.

In July 2014 it was announced that McCarthy had joined UK lobby firm Sovereign Strategy as a consultant taking up the new role of deputy chair for European strategy. At the time she said:

“Working with Sovereign Strategy, an experienced and effective global public affairs company, is a great opportunity for me to use the skills and expertise I have gained in twenty years of working on European policy and legislation. I am looking forward to this exciting new challenge.”

The founder and executive chairman of Sovereign Strategy is Alan Donnelly, who was a UK Labour MEP for 10 years until 1999. He set up Sovereign Strategy in 2000 with Iain Malcolm, his former chief of staff. Donnelly has said:

“Arlene has had an outstanding career as a member of the European Parliament and is respected internationally and across the political spectrum for her vision and tenacity. I am proud to have her join our team.”

At the time of writing (August 2014) Sovereign Strategy is not in the EU transparency lobby register even though it's UK lobby registration makes clear that is also operates in Belgium and McCarthy's new job title is 'deputy chair for European strategy'. Sovereign's UK clients in 2014 include: Bloomberg, Cantor Fitzgerald, the EU-Sri Lanka Business Council and others. Sovereign has also previously represented Formula one management, the government of Iceland, Huawei Technologies, the oil company KNPC and the Transatlantic Nuclear Energy Forum. [Update: Sovereign Strategy joined the EU lobby register on 1 December 2014.]

CEO contacted Ms McCarthy in advance of publishing this profile but no response was received.

The rules in the European Parliament

The current revolving door rules for MEPs are so weak as to be virtually non-existent. The code of conduct for MEPs (approved in 2011) states that

“Former Members of the European Parliament who engage in professional lobbying or representational activities directly linked to the European Union decision-making process may not, throughout the period in which they engage in those activities, benefit from the facilities granted to former Members under the rules laid down by the Bureau to that effect”.

However, there is no process to monitor or enforce this part of the code and ensure that former MEPs do not use their lifelong access pass for lobbying purposes.

When MEPs leave the European parliament they are entitled to a transitional allowance equivalent to one month's salary for every year they have been an MEP, with a minimum pay-out of six months' salary and a maximum of 24 months.

Update - 9 October 2014

Sovereign Strategy was involved in lobbying MEPs on the MiFID proposal (markets in financial instruments directive); Sovereign's Michael Quigley met with Kay Swinburne MEP of the ECON committee on 1 October 2013 on behalf of Sovereign's client Bloomberg. Meanwhile, Arlene McCarthy acted as shadow rapporteur for this proposal during the important trialogue sessions during the illness of her colleague Robert Goebbels MEP. Unlike the UK Conservative group, the UK Labour group in the European parliament does not publish a list of its lobby contacts so it is not possible to know what contacts, if any, McCarthy had during this period with Sovereign, Bloomberg or any other Sovereign client.

Update - 3 June 2015

An April 2015 interview with McCarthy reports that she is "Executive Director of AMC Strategy. She is Special Advisor to the Chairman of Bloomberg, Advisor to the CEO at IFPI and Associate Deputy Chair for Europe at Sovereign Strategy."

Update - 1 August 2016

Politico reports that McCarthy, via her consultancy AMC Strategy and her role as special adviser to Bloomberg chairman Peter Grauer, is "leading the charge" for Bloomberg in its lobby battle with Symphony, a battle which is aimed at "slowing Symphony's growth". Symphony is a partnership between Goldman Sachs, Morgan Stanley and various other major banks. Politico reports that in 2015, "McCarthy — together with Alan Donnelly, another former MEP who heads Sovereign Strategy, a British consultancy that has had Bloomberg as a client since 2003 — contacted three of her former [MEP] colleagues on the [ECON] committee: Pervenche Berès, Elisa Ferreira and Anneliese Dodds." Apparently, the MEPs took several actions action, including writing to then financial services commissioner Jonathan Hill to urge closer scrutiny of some of Symphony's services. AMC still declares only receving €9999 lobby income from Bloomberg in 2014; no more recent figure has been provided. Bloomberg appears to have re-joined the EU lobby register in July 2016 and declared only €50,000-99,999 EU lobby spend in 2014. It paid €100,000-199,999 to Sovereign Strategy in 2015. 

Comment from CEO: 

“When an MEP leaves the European parliament and immediately joins a lobby consultancy, the risk of conflicts of interests can be raised. CEO considers that the MEP code of conduct is currently inadequate to the job of regulating the revolving door for former parliamentarians. The code should be reformed to ensure safeguards are put in place so that private clients do not benefit from ex-MEPs' insider know-how and likely privileged access to decision-makers.”

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