Can the EU’s lobbyists be tamed?

Date: 06/04/06

On 3 May the European Commission will publish proposals to regulate lobbying in Brussels, as the next step in its efforts to introduce greater transparency in EU lawmaking.

Commission President Jos�anuel Barroso and Vice-President Siim Kallas have not been convinced of the need for statutory control along the lines of the US model. Instead they will be proposing measures to strengthen the self-regulation that the lobbying industry says is already in place.

The Commission's Green Paper on the Transparency Initiative will be proposing a voluntary system of registration for lobbyists and would-be lobbyists. The Commission would run a register and lobbyists would be given incentives to register.

As a condition of registering, lobbyists will be required to provide information, open to everyone, about who they are, who they represent and who is funding them.

Registered lobbyists will have to subscribe to a code of conduct. The Commission is proposing certain minimum requirements as to what should be in the code of conduct although, importantly, the codes of conduct will be drawn up by the lobbying industry's various associations.

The Commission will demand that the lobbyists create a system of monitoring compliance with any code of conduct, including sanctions for those who do not comply. The Commission's expectation is that industry lobbyists and non-governmental organisations (NGOs) should agree between themselves on procedures for policing compliance - investigating and punishing any breaches of their codes.

The tightening up of rules on lobbying is a mark of how the lobbying of the EU institutions has taken off in Brussels in recent years. Brussels has an estimated 15,000 lobbyists and 2,600 interest groups in an industry worth 60m-90m euro each year. The only other city in the world with a comparable lobbying corps is Washington - although the US capital is some distance ahead in commercial terms, for now.

"There is a growing appreciation in America of the importance of Brussels," says Douglas Pinkham, president of the US Public Affairs Council. "The lobbying or public affairs community in Brussels has developed tremendously over the past 25 years."

But underlying the Commission's proposals is a belief that Brussels does not have to mimic Washington DC in the way that lobbyists behave and the way they are regulated. Which is perhaps just as well given that Washington DC is still reeling from the conviction of lobbyist Jack Abramoff for fraud. His trial made public how lobbyists can buy and sell influence in that city.

But the Commission does accept that lobbying is an essential part of lawmaking in Brussels and Strasbourg. Because the EU's lawmaking bodies are relatively small and the legislation for which they are responsible covers a vast - and growing - range, outside advice is generally welcome, even necessary.

In return for providing the EU institutions with specialist information, or an inkling of the reaction of one constituency group or another, lobbyists - both commercial and non-profit - gain access to decisionmakers.

The Commission's 3 May paper will include a review of its practices in consulting stakeholders. Procedures were changed a few years ago as part of the Commission's efforts on 'good governance' and better lawmaking.

There will also be a re-statement of the Commission's wish for member states to disclose the names of those who receive EU money - the so-called end beneficiaries - whose management is shared between the Commission and the national administrations. Some states, but not all, have done so. The Commission's argument is that making public the names of those who receive taxpayers' money through the Common Agricultural Policy and structural funds would improve its management and increase accountability.

Transparency would also, the Commission believes, combat fraud.

Margery Kraus, chief executive and founder of APCO, a US lobbying company with offices worldwide, stresses the limitations of regulation.

On a visit to Brussels, reflecting on EU's current set-up, she said: "I'm not aware of a whole lot of abuse here, I think on the whole it works pretty well. But I'm not sure [rules] ever defend against the person who wants to be a crook."

Good rules can however provide political cover. The examples of Gerhard Schr�der, who signed a controversial agreement for a pipeline with Russia while in government and then became chairman of a Gazprom-led consortium, and Tony Blair, who nominated to the upper house of the UK Parliament those who had provided loans to the Labour Party, show what can happen when regulatory restraint falls short.

If and when people can act unethically while staying within the existing rules, then the rules may need tightening. Otherwise the EU runs the risk of being discredited. Ironically, if there were an Abramoff-style scandal in Brussels, it would probably do more damage to the EU than Abramoff has done to Washington.

Article anticipates the adoption by the European Commission of a Green Paper on the European Transparency Initiative, on 3 May 2006. The Green Paper was to include the proposal for a voluntary system of registration for lobbyists and would-be lobbyists. The Commission would run a register and lobbyists would be given incentives to register. The Green Paper was also expected to include a review of the European Commission's practices in consulting stakeholders.

European Commission: Commissioners: Siim Kallas: Transparency Initiative http://ec.europa.eu/comm/commission_barroso/kallas/transparency_en.htm

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