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Business, Politics and the Revolving Door in the European Union

Image by European People's Party, used under Creative Commons 2.0 license.

Image by European People's Party, used under Creative Commons 2.0 license.

The so-called “revolving door”, or when public sector officials move into private sector jobs and vice-versa, is becoming more of an issue in the European Union with every year. The primary concern in these cases is the tendency for conflicts of interest to arise, in other words, the abuse of inside knowledge attained by these persons while in public office.

Although the revolving door has different forms, it has a significant effect in the lobby industry, and anti-lobby groups are calling for more transparency and even bans on this kind of practice. The issue with the revolving door in regards to the European Union begins when lobbyists or Brussels officers commute between EU institutions and companies without regard to conflicts of interest. As EUObserver.com recently noted:

The revolving door refers to public officials leaving office and going to work in private sector lobby jobs, often in the same areas they were responsible for in office, or vice-versa.

This creates a significant risk of conflicts of interest, which – if left unmanaged – facilitates the privileged access and undue influence of corporate groups that undermines democratic, public-interest decision-making in the EU.

Though the European Union has set up a Transparency Register since 2011, many argue that it is not efficient enough. The European Transparency Register (ETR) is run by the European Commission and the European Parliament with the goal of providing EU citizens with an information access point regarding various decision-making processes. In an article, The Parliament Magazine commented:

[...] a “worrying” number of officials go through the ‘revolving door', which means leaving their EU job to work for “big” business and lobby groups, often in the same policy area.

Business gains “inside-knowledge, vital contacts, and above all, powerful influence”, it was said.

Rachel Tansey, a campaigner with Corporate Europe Observatory (CEO), said, “This helps to make Brussels even more business-dominated and remote from the public interest.”

This was demonstrated, she said, by a recent EU citizens’ poll showing 73 per cent are concerned that lobbyists representing the business sector have too much influence on EU decisions.

It is difficult to calculate how many former officials have moved through the revolving door so far, but ALTER-EU's research estimates [pdf] that at least half of the biggest lobby companies’ staff have previously worked in various EU institutions. A well-known example is the case of the Swedish Mårten Westrup. As a start, Westrup had his position in the European Commission's Directorate General of Enterprise and Industry as a legal officer and later as a policy officer. He dealt with industrial policy and worked out regulations for CO2 emission from cars. Through the revolving door, he then secured a position for himself at BusinessEurope, one of the most influential and dominant lobby organizations in Brussels, as an advisor. ALTER-EU's report points out:

In 2010, Mårten Westrup moved from DG Enterprise to BusinessEurope and lobbied former colleagues on climate change issues on behalf of BusinessEurope’s interests. Yet under the current rules, his job move did not require approval from the Commission because of a loophole which excludes staff on contracts from systematically requiring authorisation. Westrup has now gone back through the revolving door and can be found working in DG Energy.

The Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU) was launched in late 2005 in order to put pressure on and raise awareness against lobbying in the European Union. The organization states that since at least 50 per cent of our laws are created in Brussels, it is crucial that these regulations serve the people and not businesses.

ALTER-EU's main argument is that the volunteer options of European Transparency Register will never ensure transparency on an acceptable level. Hence, they campaign for a mandatory and extensive register. The same ALTER-EU report mentioned above suggests creating new regulation and closing loopholes to fix the problem.

In fact, Europe's revolving door has become somewhat of a hot topic on social networks in the past several months, many of the comments there showing that the effect of lobbyist and corporations on governance is becoming obvious to EU citizens. Tim LaPira, a political scientist from Virginia, compares it to what has been happening in the US for decades:

A reader on a Spiegel Online article about the revolving door in regards to top EU officials also comments:

The Commission should simply have rules where a former official takes a private industry position that places him in conflict means the Commission will no longer have dealings with either agents or principles until the conflict is cured?

Jürgen Wilfrd Linder is one Twitter user who was very straightforward in this tweet about the matter:

ALTER-EU's partner organization, Corporate Europe Observatory (CEO), has launched its RevolvingDoorWatch program in December 2011 in order to raise bring matters to light. During the program's launch, eight cases were revealed where former members of various European institutions without satisfying limits joined different lobbyist groups.

The EU's regulation and criticism

The fact that there was no scrutiny or a mandatory cooling-off period in the revealed cases shows that there are currently major loopholes EU regulations. These cases could happen because the EU's current rules do not apply to officials with temporary contracts except for those who were in positions where they could have obtained “sensitive” information. ALTER-EU argues that the distinction between staff members based on whether they are on permanent or temporary contracts cannot be maintained. This organization urges the EU to implement a sustainable, common and transparent procedure.

After a number of cases revealed by CEO in October 2012, the organization along with Greenpeace, Lobbycontrol and Spinwatch submitted a complaint to the European Ombudsman against the European Commission.

On 14 February 2013, the European Ombudsman published a press release stating that an investigation has begun against the EC. The press release announced that if during the inquiry the Ombudsman finds systematic problems, further scrutiny will follow.

Since then, the first steps towards better regulation has been made. During this summer, the European Parliament adopted new staff regulations which will go into effect at the beginning of 2014. Compared to the old regulations, the new ones provide an explicit system for monitoring and screening officers for possible conflicts of interest and includes a 12-month prohibition on lobbying staff of their former institution. 

Obviously, there is progress towards regulating issues related to the revolving door. However, some of the mentioned organizations are not fully satisfied with this progress and say that there is room for future improvements. They argue that the new provisions have further loopholes which make the whole document weaker.

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  • heynaheyna

    the basic problem with the revolving door is the possibility/probability that a powerful entity (private corporation, typically) could induce sitting legislators to pass rules/laws that they otherwise wouldn’t pass, in return for the promise of later compensation after they leave office. typically this would take the form of a position with the company that has minimal actual duties but that pays a very generous salary.

    my first thought is, could you simply make it a requirement of office to sign a legal contract that says you will not accept such compensation after you leave office? this approach seems nice and direct, but it would be problematic to define exactly what compensation would qualify here. the argument could be made that any rule that would accomplish this would effectively mean no officeholder could ever work in the private sector ever again. and this doesn’t seem reasonable to me, although it might to some people if the officeholder was guaranteed a decent pension after leaving office.

  • http://www.ivtrades.com/ ivtrades

    sorry, wrong post.

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