A month ago we praised European Commissioner Kallas in this blog for his insistence that think tanks must join the lobby transparency register, as their activities are aimed clearly at influencing EU decision-making. In a speech last week, Commissioner Kallas restated this very clearly and highlighted the example of Friends of Europe, which – like most other Brussels-based think tanks – boycotts the Commission’s voluntary register. The events organised by this Brussels-based think tank are routinely sponsored by corporations and clearly intended as lobbying opportunities. Kallas mentioned the example of the Friends of Europe debate that will take place next week on investing in Africa’s growth and health. The event, which involves the EU Development Commissioner, MEPs and other decision-makers, is sponsored by French oil giant Total. In return for the sponsorship, two company speakers appear as panelists.
Kallas’ remarks sparked an angry reaction from Friends of Europe boss Giles Merritt, who sent out a press release challenging Kallas to debate with him “at a time and with other speakers of his choosing”. The press release ignores Mr. Kallas” arguments for why think tanks should register. Instead Merritt rhetorically states that think tanks have “major reservations about volunteering to classify themselves as lobbyists when they so clearly are not”.
It is very ironic for Mr. Merritt to make these claims. He – if anyone – embodies the emergence of a type of think tanks in the Brussels EU quarter that are far removed from the classic notion of think tanks as providers of the kinds of innovative ideas that vested political and economic interests often cannot deliver. Friends of Europe and the Security & Defense Agenda, two think tanks founded by Mr. Merritt, look more like service providers for their wealthy corporate membership, providing them with a platform for influencing EU decision-makers. For example, Friends of Europe offers VIP members Visibility - Input - Platform for 6500 € per year.
Mr. Merritt is a veteran think tank entrepreneur, who in the 1990s ran the Philip Morris Institute for Public Policy Research, a think tank that was very obviously linked to one (very controversial) corporate sponsor. Merrit also founded Forum Europe in 1989 and Friends of Europe in 1999. In 2003, he established the New Defence Agenda, a think tank designed specifically for the arms industry which signed up in large numbers as ‘partners’. In a brochure distributed in 2004, the New Defence Agenda offered arms corporations to host conferences on issues of their choice, in return for a fee of 25,000 euro. For 30,000 euro they could get a “Tailor-made Discussion Paper” published by the New Defence Agenda. The think tank has later been renamed Security & Defence Agenda.
In the press release, Mr. Merrit claims that Friends of Europe and other think tanks have no problems with financial transparency. The reality, however, is that information about funding sources is still nowhere to be found on the Friends of Europe website.
Mr. Merritt should be the first to acknowledge that most Brussels-based think tanks are heavily dependent on corporate membership and sponsorship and in practice often act as a platform through which these firms hope to shape or influence the debate about EU decision-making. For large corporations, sponsoring a think tank activity is one of numerous channels available in their lobbying strategies (in addition to in-house lobbying, working via industry coalitions, hiring a lobby consultancy, advertising, etc.). In the Commission’s definition ‘lobbying’ means “all activities carried out with the objective of influencing the policy formulation and decision-making processes of the European institutions.” The proximity between think tanks a la Merritt and the lobby consultancy sector was illustrated by the merger last year of Forum Europe and Epsilon Events, creating “the largest EU affairs-dedicated events management outfit in Brussels”.
Kallas is completely right that think tanks, not the least those set up by Mr. Merritt, must join the register so their role in EU lobbying becomes visible. It will be worth watching how Commissioner Kallas reacts to Merritt’s challenge. If anything, it should makes Kallas rethink his voluntary approach to transparency.
Thursday, 23 April 2009
Merritt’s allergic reaction to lobby transparency
Tuesday, 7 April 2009
Is the writing on the wall for public affairs professionals?
The Commission is due to evaluate the effectiveness of its voluntary lobby register, but so far, more than 70% of the companies in the Society of European Affairs Professionals (SEAP) haven't registered.
Yesterday, the Society of European Affairs Professionals (SEAP) held its General Assembly in the the Residence Palace in Brussels. I haven't seen the agenda, but, I'd hazard a guess that the European Commission’s voluntary register and code of conduct for interest representatives formed one of the main topics discussed at the meeting.
At the SEAP Conference on European Transparency Initiative & Ethics in Lobbying in October last year, SEAP chair Lynn Trytsman-Gray said that European Affairs professionals were “positive towards the Commission’s request for more transparency” and blamed the European Commission for the low number public affairs firms that had actually registered: “Rather than expressing concerns about the unwillingness of lobbyists to register, the European Commission ought to provide better guidance and structured training to facilitate participation.”
But these words sound even more hollow now than they did six months ago. Investigation of the register shows that so far, just 28.2% of all companies represented in SEAP have registered. This low registration rate is even worse than the findings of a survey by EurActiv (What do EU Actors think of the European Transparency Initiative?), which found that 55% of federations, 53% of consultancies and 41% of businesses do not intend to participate at all in the voluntary lobbyists register launched by the Commission last June.
As Commissioner Kallas wrote some months ago in a comment for the EUobserver: "We have also clearly announced mandatory registration if our gentle persuasion to join us voluntarily is not heard." In June the Commission will evaluate the register. With law firms and think tanks boycotting the register and a large majority of lobbying consultancies preferring to stay in the shade, a mandatory register seems inevitable.
Friday, 20 March 2009
Commission continues to grant privileged access to unregistered lobbyists
While the Commission claims to be urging lobbyists to join its voluntary lobby register, the speakers list of a high-level conference on industrial competitiveness organised by the Commission’s Directorate for Enterprise and Industry suggests that the Commission’s soft approach is not working.
The conference was opened by Commission President Barroso and Vice-President Verheugen and was mainly attended by corporate lobbyists. Only three out of the seven business organisations and companies speaking at the conference are registered in the EU lobby register: BusinessEurope, Dow and IBM. The other four – Ernst & Young, Philips, Unicredit and the German Mechanical Engineering Federation – are not registered. And the only trade union speaking, the European Metalworkers Federation, hasn’t registered either.
Unfortunately, this is no exception. The European Business Summit on 26 – 27 March advertises the participation of a record number of 12 EU Commissioners. But at the same time, only 8 out of the 21 corporate partners of the summit have joined the register.
Having “clear incentives for lobbyists to register” (Green Paper European Transparency Initiative, 3 May 2006) was to be the keystone of the voluntary approach of the Commission’s register. But instead of being tough on non-registered companies and business organisations, the Commission continues an open doors policy for non-registered corporate lobbyists, thus undermining its own transparency initiative.
Thursday, 19 March 2009
Think tank says boycott of register is 'a matter of principle'
In an article on the European Commission's lobby register, Dirk Jan Hekking, Brussels correspondent of Het Financieele Dagblad, notes that law firms and think tanks continue to boycott the register. Among the major Brussels-based think tanks only the European Policy Centre has registered.
In his article, Hekking quotes Matt Dann of the think tank Bruegel: "We object to the fact that the Commission places us in the same category as lobbyists. Our aim is to contribute to the quality of policies by delivering research, debate and analysis based on facts. This is a matter of principle. We are not lobbyists, so we will not register in a lobby register".
This boycott should be a matter of serious concern for the Commission, as it undermines one of the few very strong points of the EU lobby register: think tanks are included and thus expected to provide transparency around their lobby budgets and funding sources. Including think tanks in the lobby register is very appropriate, as the activities of Brussels-based think tanks are aimed at shaping EU policy-making.
Bruegel lists its funding sources on its website, but many EU-focused think tanks refuse such transparency. Such secrecy is often intended to hide covert corporate funding tied to initiatives on specific issues where corporations want to influence EU policy debates and decision-making.
Including think tanks in the register is essential in securing transparency around EU lobbying. Unfortunately, when designing the register the Commission has been too lax on reporting requirements. Think tanks are only asked to declare their sources of income in very broad categories ('public financing', 'donations', 'programme support'). In this way funding by individual companies remains invisible. This is a serious flaw that must be addressed in the review of the register that starts next month.
In the US, think tanks are not covered by lobby disclosure legislation, but transparency campaigners are advocating to fix this massive loophole. J. H. Snider from the New America Foundation proposes to "require think tanks - like lobbyists and political candidates - to disclose their donors; the disclosure rules for think tank lobbyists should be subject to at least the same standards as their non-think-tank colleagues, with the resulting lobbying information integrated into a single, easily accessible lobbyist disclosure database".
The article in Het Financieele Dagblad also provides some examples of how differently firms are calculating the lobby expenditure they report in the Commission's register. French liquor producer Pernod Ricard reports to have spent 460,000 euro on lobbying last year, which includes office rent, but also costs of insurances and parking. Pharma giant Pfizer reports to have spent 750,000 euro, but this is only the salary costs of their lobbyists. The Commission's failure to provide clear definitions makes it impossible to compare the information disclosed in the register or in other ways draw any serious conclusions from the data.
Reference
"Piepjong lobbyregister Europese Commissie is de fase van kinderziektes nog niet door"
Han Dirk Hekking, Het Financieele Dagblad, 17 March 2009
Monday, 9 March 2009
Secrecy prevails among EU banking lobbies
The financial sector invested more than $5 billion in gaining political influence in Washington DC in the past decade, with as many as 3,000 lobbyists pushing deregulation and other policy decisions that led directly to the current financial collapse, according to a recent report issued by Essential Information and the Consumer Education Foundation.
The report, Sold Out: How Wall Street and Washington Betrayed America, shows how information on financial industry lobbying can play a role in the public debates about how to address the financial crisis. But a survey of levels of transparency on financial services industry lobbying in Brussels indicates that the voluntary and flawed EU lobbying register does not provide anywhere near the same level of detail or accountability. The register does not show which companies and lobby groups are the main players, who are the actual lobbyists and how much money the financial industry is spending on influencing EU decisions. In the US, regulators may be in a position to identify their role in the fincancial crisis. In the EU, we appear to be operating in the dark.
Sold Out: How Wall Street and Washington Betrayed America is based on data from the mandatory US lobbying disclosure system. It concludes that between 1998-2008, Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.725 billion in political contributions and spent another $3.4 billion on lobbyists, creating a financial juggernaut aimed at undercutting federal regulation.
Rob Weissman, main author of the report told IPS News:“It’s very important to identify the causes of the crisis if we are to fix it and prevent it from occurring again.”
Has financial market regulation in the European Union suffered from a similar degree of corporate capture? In a recent speech at the Institute of International & European Affairs in Dublin, Internal Market Commissioner Charlie McCreevy suggested that this has indeed been the case: “What we do not need is to become captive of those with the biggest lobby budgets or the most persuasive lobbyists: We need to remember that it was many of those same lobbyists who in the past managed to convince legislators to insert clauses and provisions that contributed so much to the lax standards and mass excesses that have created the systemic risks. The taxpayer is now forced to pick up the bill.”
McCreevy himself has a record of granting industry lobbyists privileged access, but his statement underlines the need to assess the role of lobbying in contributing to the financial meltdown in Europe.
The European Commission’s voluntary lobbying register, unlike the US system, does not include details of how much the financial services industry has spent on lobbying the EU institutions or of who has spent the most money. Due to the voluntary nature of the register, firms can simply decide not to register, and in fact only a few of the larger European financial services companies have joined the register till now. The same goes for insurers.
Barclays, Citibank, Deutsche Bank, Dexia, Dresdner Bank, Fortis, KBC, Mastercard, Royal Bank of Scotland, Visa and many other banks with Brussels’ lobbying offices have not registered and remain invisible.
Quite a few of the large financial services players are mentioned in the entries made by lobby consultancy firms, which means that – in addition to their own lobbying efforts – they have bought in the assistance of hired-gun lobbyists. The undisputed specialist in EU lobbying for banking clients is Houston Consulting, which lists Euroclear, MasterCard, JPMorgan, Omgeo, Citi, HBOS, Western Union, Prudential, Moody’s and Morgan Stanley among its clients. Houston Consulting recently merged with KREAB, which represents Investor AB and Handelsbanken. Interel Cabinet Stewart lobbies for Barclays, Hill & Knowlton for American Express, Merrill Lynch, Hume Brophy for the hedgefund industry lobby group AIMA and GPlus represents the European Private Equity & Venture Capital Association (EVCA) and Visa Europe. Typically, clients are listed as representing “less than 10% of total lobbying turnover”, which means the amounts involved can vary between zero and hundreds of thousands of euros.
Financial services companies currently listed on the EU lobbying register (9 March 2009).
For lobby groups representing the financial services sector, the picture is also far from complete:
Financial services industry lobby groups currently listed on the EU lobbying register (9 March 2009).
Wednesday, 11 February 2009
At least a dozen dubious entries in the Commission's lobby register
At least twelve organisations registered in the Commission’s lobbying register could be more virtual than real. Here’s the story of how I found out.
It all started when I tried to figure out who on the European Commission’s Register of Interest Representatives spends most on lobbying. It turned out that one registrant stands head and shoulders above the rest. The obscure Fares Bank Ltd, headquartered in London and directed by “Mr Willy Bergher”, reports to have spent an amazing 250 million euro on lobbying the EU institutions in 2008, dwarfing Hill & Knowlton International Belgium (8,143,400 euro in 2007) and Burson Marsteller (6,963,000 EUR in 2007) which take second and third place.
A visit to the website of Fares Bank Ltd got me curious. The site is quite odd in many respects, redirecting visitors to another URL (http://www.ha4a.net/db/faresbank/index.php?lang=english) and prominently announcing that “Fares Bank Ltd is a company registered at the "European Commission" to No. 80756441078-18” – which appears to be somewhat clumsy attempt to lend this ‘bank’ more credibility. Fares Bank's London address coincides with that of a company renting virtual offices.
A whois search showed that the bank’s website is registered by a certain Gennaro Ruggiero from Prato, a city not far from Florence, Italy. Following that trail I discovered a series of inter-related organisations and websites where one cannot help but wonder whether these organisations are real or just imaginary.
As a next step, I checked if some of these other organisations appear in the EC lobbying register. And voilà: no less than twelve registrations linked directly or indirectly to Mr. Ruggiero (see list below).
It is a strange kettle of fish – and I am at a loss to explain what is going on. But I cannot help but wonder how these twelve organisations are registered on what is supposed to be a tool for transparency. Because the Commission does not seriously screen registrations – or at least they do not appear to – citizens visiting the register are left questioning the reliability of the information it contains. The current lack of oversight is a big disappointment for all pro-transparency campaigners.
But my surprises didn’t end at the Commission register. I also found Gennaro Ruggiero and Giuseppe Catapano on the list of registered lobbyists at the European Parliament, representing the Osservatorio Parlamentare Europeo e del Consiglio d'Europa (see list below). Being on the EP register means that these two ‘gentlemen’ have permanent access badges to the European Parliament buildings. It makes one wonder how this could ever happen.The Ruggiero network on the EC lobbying register
Registration date: 21-01-2009 9:38:04 PM
Person legally responsible for the organisation: Mr MASSIMILIANO RUGGIERO
Links with Ruggiero network: AIG Freelance statutes list Gennaro Ruggiero as President of the Association
Other peculiarities: Rudimentary website
Registration date: 21-01-2009 9:23:42 PM
Person legally responsible for the organisation: Mr FRANCESCO CANDURA
Link(s) with Ruggiero network: website registered by RUGGIERO, ALESSANDRO ; On the CICS ONLUS website, Gennaro Ruggiero is listed as President of the organisation (General Secretary: Dr Francesco Candura; Press Office Director: Alessandro Ruggiero)
Other peculiarities: The CICS ONLUS website has a similar design and the same host system as that of FARES BANK LTD
Registration date: 06-02-2009 7:28:37 AM
Person legally responsible for the organisation: Mr Willy Bergher
Link(s) with Ruggiero network: website registered by Gennaro Ruggiero
Other peculiarities: The FARES BANK website has a similar design and the same host system as that of CICS ONLUS
Registration date: 03-02-2009 10:49:14 AM
Person legally responsible for the organisation: Mr Luigi Dott. Conti
Link(s) with Ruggiero network: "partner con OPEEQ, OPE - Osservatorio Parlamentare Europeo, MEDA - Movimento Europeo Diversamente Abili, CICS - Comitato Internazionale Cooperazione Sviluppo" ; Same Brussels address as OPEEQ
Other peculiarities: The website of Italia Opera is under construction
Registration date: 02-02-2009 12:51:19 PM
Person legally responsible for the organisation: Mr GIOVANNI RUGGIERI
Link(s) with Ruggiero network:
Other peculiarites: The website of the Observatory on Tourism in the European Islands" is under construction"
Registration date: 21-01-2009 1:40:56 PM
Person legally responsible for the organisation: Mr FRANCESCO ISIDORO CANDURA
Link(s) with Ruggiero network: Francesco Candura also is registered as the legal resposible person for CICS ONLUS; The organigram on the OPEEQ website lists Dr Gennaro Ruggiero as Secretary General and one of the three "Giudici di Pace del Collegio Arbitrale Internazionale", Mr. Massimiliano Ruggiero as "Consigliere addetto ufficio stampa e propaganda" and Mr. Alessandro Ruggiero as "Responsabile Web e Marketing"
Other peculiarites: Rudimentary website
Registration date: 06-02-2009 8:54:09 PM
Person legally responsible for the organisation: Mr Adriano Dott. Femiano
Link(s) with Ruggiero network: Gennaro Ruggiero is listed as contact address for the organisation
Other peculiarites: Rudimentary website
Registration date: 07-02-2009 5:35:47 PM
Person legally responsible for the organisation: Mr Adriano Dott. Femiano
Link(s) with Ruggiero network: This registration is almost identical to that of OPEITALIA
Other peculiarites: Rudimentary website
Registration date: 21-01-2009 8:44:59 PM
Person legally responsible for the organisation: Mr Gennaro Ruggiero (Presidente)
Link(s) with Ruggiero network: On the OPE website, Gennaro Ruggiero is listed as "Adviser of the President" (of OPE), together with Dr Francesco Isidoro Candura. Dr. Francesco Mario Ioppolo is listed as president of the organisation. This registration is to some extent similar to that of OSSERVATORIO PARLAMENTARE EUROPEO e del Consiglio D'Europa (below)
Other peculiarites: Rudimentary website ; the OPE address in Brussels (rue de la Presse 4) coincides with that of a company renting virtual offices
Registration date: 26-12-2008 11:24:48 PM
Person legally responsible for the organisation: Mr Giuseppe Catapano (Presidente & segretario generale)
Link(s) with Ruggiero network: This registration is to some extent similar to that of OPE : OSSERVATORIO PARLAMENTARE EUROPEO E DEL CONSIGLIO D'EUROPA, but with completely different budget figures
Other peculiarites: Rudimentary website
Registration date: 21-01-2009 11:47:57 PM
Person legally responsible for the organisation: Mr Dott. Gennaro Ruggiero
Link(s) with Ruggiero network: Obvious -- This is the company of "Mr Dottore Gennaro Ruggiero" himself, listing as his "clients" OPEEQ and CICS.
Other peculiarites: Rudimentary website
Registration date: 21-01-2009 10:57:07 PM
Person legally responsible for the organisation: Mr ALESSANDRO RUGGIERO
Link(s) with Ruggiero network: On the UDL website Mr. Gennaro Ruggiero is listed as "Segretario Nazionale"
Other peculiarites: Rudimentary website (not listed in EC register)
Monday, 2 February 2009
GPlus back on EU lobbying register after disclosing previously unnamed clients
One and a half week after this blog broke the news of the suspension of Brussels lobby firm GPlus from the European Commission’s lobbying register, the company is back on the register after having disclosed four previously unnamed clients.
As the GPlus suspension was getting picked up in the media the company went into “crisis management” mode, with a statement published on the GPlus home page.
According to an article in the Financial Times:“Peter Guilford, one of GPlus’ founders, said the firm had informed the commission in December, when it first joined the registry, that it had pre-existing confidentiality agreements with three clients, who did not want their names disclosed. Two of those clients are no longer represented by GPlus.”
But in the end the confidentiality agreements between GPlus and these clients proved to be less sacrosanct than suggested initially and GPlus disclosed the names of the four previously unlisted clients.
By following up on this case and forcing publication of unlisted clients' names, the Commission has set an important precedent. For other lobbying consultancies the case should serve as a lesson, showing that it can be pretty counterproductive not to provide a full clients list when registering.
Corporate Europe Observatory has strong indications that some of the other lobby firms that have registered so far also fail to publish a full list of their clients. Unlike GPlus, these sneaky guys don't announce publicly that their list is incomplete. But if such violations of the registration rules will indeed be uncovered, these firms may find themselves much more in need of "crisis management" than GPlus was last week.
The clients that had asked GPlus for confidentiality are:Japanese carmaker Toyota is registered separately, reporting 250,000 – 300,000 euro spending on lobbying in 2008.
As part of the “crisis management” to avoid reputation damage, GPlus also published a pdf document containing its entry on the register. In this document, GPlUs declares a total turnover on lobbying in 2007 of £ 1.97 million (€ 2.1792 million). But on the register website, the firm chooses to be less transparent and only indicates that its lobbying turnover in 2007 was over 1 million euro.
Last autumn, GPlus was nominated for the Worst EU Lobbying Awards 2008 for supporting the spread of war propaganda on behalf of the Russian Federation. One of GPlus’s clients, the Malaysian Palm Oil Council, won the Worst EU Lobbying Award 2008, together with Abengoa and UNICA.
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