Graham Watson

Sir Graham Watson was first elected to the European Parliament in 2004 and served four full terms, three of them representing the South West England and Gibraltar constituency. He lost his seat in the 2014 European elections.

Throughout his mandates, Watson grew to be very influential within the European Liberal, Democrat and Reform Party group in the European Parliament (now Alliance of Liberals and Democrats for Europe - ALDE), for which he served as President from 2002 to 2009. He remains an important figure within Liberal Democrat political circles as in 2011 he was elected President of the ALDE Party, a position he keeps to this day.

Watson's time in the European Parliament also saw him participating in several key committees, including the committee on Economic and Monetary Affairs and Industrial Policy and the committee on Foreign Affairs. In 1999 he was elected to chair the committee on Citizens' Freedoms and Rights, Justice and Home Affairs, which he led for three years. From 2009 until the end of his mandate, he chaired the delegation for relations with India.

In October 2014, just a few months after losing his parliamentary seat, the Liberal Democrat set up the public affairs company Bagehot Ltd, registered as a private limited company in the United Kingdom (no. 09251079). The company appears to be named after Victorian businessman, journalist, essayist and self-acclaimed conservative liberal, Walter Bagehot.

In October, the Government of Gibraltar announced that it would be hiring Watson to represent its interests in Brussels. According to this press release, the ex-MEP would “lead and direct the lobbying activities of the Government in the EU capital which includes advising and guiding the Government in connection with the implementation of strategies for the promotion of Gibraltar’s interests within the European Union.” The former MEP would also “be charged with facilitating the promotion of business in Gibraltar from Brussels”.

When contacted by CEO, Watson said:

“Subsequent to the elections I was approached by HM Governement (sic) of Gibraltar (henceforth HM GoG) and offered a full time job as head of a new office they wish to set up in Brussels. I declined the offer, since I have a number of other commitments and interests to which I also wish to devote time.”

Instead, he has been contracted as an external consultant via Bagehot Ltd and he charges HM GoG on an hourly basis. He further explained that:

“The services provided to HM GoG include helping them to set up a more substantial presence in Brussels than they have hitherto enjoyed, and advising them more generally on EU affairs. Their brief to me is a wide one but focusses on providing strategic advice rather than lobbying EU institutions directly on their behalf. It involves, for example, advising Gibraltar government ministers and agencies on who they should lobby and how they might best proceed.”

Update 8 July 2015: CEO has been forwarded an email sent by Watson which invited MEP assistants for a “study trip” to Gibraltar with the aim to “raise awareness of Gibraltar's situation and its interests at European Union level”. For that he “will be inviting a delegation of 8 - 10 MEP assistants who work in support of MEPs work in areas relevant to the interests of Gibraltar. The programme will include formal briefings and visits to see the Rock and its unique tourist attractions.“ The trip was funded by the government of Gibraltar in a practise that Watson told CEO “is similar to those operated by the governments of many EU member states.” Read full email here.

Targeted MEPs' offices included members of the Parliamentary special committee on tax rulings, a particularly important audience for Gibraltar as it is actively fighting being labelled a tax haven, going as far as suing the Spanish newspaper ABC for defamation after it ran a report claiming it “an iceberg of dirty money” and calling it a tax haven. In 2013, Gibraltar ranked as the 43rd worst jurisdiction in the Financial Secrecy Index.

The other publicly-announced client of Bagehot Ltd is the International Advisory Council (IAC), of the international public relations firm APCO Worldwide. According to its website, the IAC is a group of “90 recognized global leaders”, including former politicians, academics, journalists, diplomats and policy experts. Its website advertises its services as:

“Each member offers clients invaluable real-world knowledge; they are individuals who understand the complex issues clients face because they have encountered similar opportunities and challenges — and successfully conquered them — in their own careers.”

The former MEP told CEO that, just like the Gibraltar authorities, APCO hired him as an external contractor to provide “strategic advice to APCO on how to best represent their clients in promoting their interests”. APCO Worldwide is one of the biggest PR companies in the world. Its current entry in the EU's Transparency Register lists over 30 clients and a total spending for EU activities in 2013 (most recent data available) between €1.5 and €1.99 million (incidentally representing a steep fall from its previous entry which listed an annual lobby turnover between €7.75 and €8 million). Watson did not disclose which clients he would advise via the IAC.

Watson did not reveal to CEO which clients he would advise via the IAC but a quick glance at APCO's long list of clients in the Transparency Register indicates they work with some major names: including GML Ltd, a private investment banking firm that specialises in merchant banking in emerging and transition countries (provides annual lobby revenue to APCO of €300,000-€399,999); News Corporation (€100,000-€199,999); and pharmaceutical company Shire, alcohol producer SAB Miller and eBay (each providing annual lobby revenue to APCO of €50,000-€99,999).

Watson has not disclosed Bagehot's full client list; when asked by CEO, Watson commented that:

“It is not normal commercial practice for companies to publish lists of their clients. However by way of indication and in the interests of transparency I can tell you that Bagehot Ltd has carried out one-off projects for one of the 'big four' accountancy firms, for an environmental technology company and for an organisation representing local government interests. Bagehot Ltd is also retained on a longer term basis by a European federation of companies working in the field of health.”

Watson told CEO he did not see any potential conflict of interests in his work at Bagehot Ltd. In relation to his work for APCO, the former MEP said:

“I perceive few if any overlaps and no conflict of interest. Moreover, I have a specific agreement with APCO that I would not work on behalf of any clients if this involved any conflict of interest with my previous work as a MEP.”

The former MEP also told CEO that:

“My business activities through the company I own and manage are entirely in keeping with the letter and spirit of the European Parliament's rules, which I was active in designing and supporting”.

Accordingly, Watson guaranteed that:

“My role as a provider of strategic counsel involves essentially providing advice to my clients about who they might usefully approach and how. I have however applied for registration under the new transparency rules which may result in the grant of a lobbyist pass.”

At the time of publication (24 February 2015), Bagehot Ltd was not listed in the Transparency Register. (Update 26 February: Bagehot is now registered.) Watson's full reply can be read here.

Watson is the fourth UK Liberal Democrat to move to a private sector job only months after leaving office. He follows similar transitions by Sharon Bowles, Fiona Hall and George Lyon.

The rules in the European Parliament

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.

Watson confirmed to CEO that he has accepted the transitional allowance.