Amid mounting criticism, EU Commission must close revolving doors with lobbying world

 

Two weeks out from the European elections, Brussels faces fresh transparency woes at a time when EU politicians need to address citizens’ waning confidence in democracy. On 17 May, European Ombudsman Emily O’Reilly addressed a letter to Commission President Ursula von der Leyen spotlighting the detrimental impacts of the shadowy “revolving door” phenomenon between the EU executive and lobbying groups.

Referring specifically to the concerning pattern of former Commission antitrust officials joining law firms keen to capitalise on insider knowledge, O’Reilly warns that the Commission’s transparency failures surrounding Henrik Morch’s recent move to U.S. law firm Paul Weiss threatens public trust and Europe’s socioeconomic interests.

Dismissing O’Reilly’s calls for bolstered transparency regulations, Competition Commissioner Margrethe Vestager defended the institution’s “very strict” revolving doors rules, reflecting a pattern of evasive answers to similar probes. Yet a series of high-profile conflict-of-interest cases have proven otherwise, meaning the Commission must change tack and begin taking the problem seriously if it hopes to regain citizens’ trust and protect European interests.

Lifting Veil on Competition Manipulation:

The European Ombudsman’s recent missive is sadly not her first exposing the unsettlingly close ties between Brussels policymakers and industry lobbyists. O’Reilly had already raised the issue with the Commission two years ago, pressing the EU executive to crack down on the flow of ex-senior officials moving to private sector firms exercising undue influence over EU policymaking – including lobbying for clients under EU investigations.

This initial inquiry had been sparked by Carlos Esteva Mosso – a top merger official in the Commission’s DG COMP – accepting a position at law firm Latham & Watkins. In the same year, Mosso’s former DG Comp colleagues Cecilio Madero and Nicholas Banasevic similarly jumped ship, with the EU executive seeing its trio of top anti-trust officials go from leading investigations into the likes of Google, Amazon and Facebook to joining Big Tech’s law firms.

Commenting on O’Reilly’s revolving doors investigation in 2022, German MEP and prominent anti-corruption voice Daniel Freund notably concluded that “the protection against conflicts of interest in rapid changes of EU staff in lobby jobs is unacceptably weak,” adding that “independent oversight by an EU Ethics Body” was crucial in tackling the problem.

While Vestager recently highlighted internal rules stipulating that senior officials “cannot work in the Commission and then on the next day,” begin to “lobby the Commission or work on the same cases,” the EU executive has largely failed to effectively enforce these transparency guardrails.

Tobacco Track and Trace Following Suit:

Foreign tech giants have not been alone in exploiting their lobbyists’ old Commission connections to swerve inconvenient EU regulation, with tobacco traceability firm Dentsu Tracking currently embroiled in a scandal involving Big Tobacco interference that flies in the face of Vestager’s assurances.

A subsidiary of Japan’s Dentsu Group – which recently faced a high-profile corruption trial – Dentsu Tracking’s opaque path to securing the EU track and trace contract in late 2018 has generated widespread conflict-of-interest suspicions among tobacco control-focused MEPs and NGOs involving former health official Jan Hoffman. As DG SANTE’s director of regulatory affairs, Hoffman was working on tobacco traceability when the Commission awarded Dentsu the tender, a fact that raised eyebrows after the company subsequently hired him.

Despite denials from Dentsu and the Commission, MEPs including Anne-Sophie Pelletier, Pierre Larrouturou and the late Michèle Rivasi have long expressed concerns that Hoffman’s Commission connections could have been used to help Dentsu win the contract or seal future regulatory wins – fears given credence by the sudden transfer and demotion of Hoffman’s former DG SANTE boss Filip Borkowski after the scandal broke. Moreover, as highlighted in a recent, 38 MEP-strong question to the Commission, Dentsu’s well-established tobacco industry links render this possibility even more concerning. 

Take, for example, Dentsu Tracking’s CEO Philippe Castella, a former Philip Morris International (PMI) employee, or co-founder Benjamin Phelip and CTO Dany Lauener, both former Blue Infinity employees who have promoted the PMI-developed, widely-discredited Codentify track and trace system. Dentsu’s 2017 acquisition of Blue Infinity – which helped to develop Codentify – has fueled MEP condemnation of EU track and trace’s WHO FCTC-violating links to Big Tobacco. Post-acquisition, Dentsu took Blue Infinity’s place in the EU’s Transparency Register for Tobacco Products Directive (TPD) lobbying, yet the company curiously disappeared from the Register in 2018 before winning the track and trace contract.

In its recently-published White Paper, the European Parliament’s Working Group on Tobacco, – including leading tobacco control actors like MEP Pelletier – extensively documents the Dentsu affair. The group notably calls on the Commission to stop avoiding its responsibilities and investigate the Hoffman conflict-of-interest case, reminding how the corruption exposed in 2014 by the similar revolving door scandal involving former Commissioner official and PMI lobbyist Michel Petite has enabled Big Tobacco’s continuous manipulation of crucial EU tobacco control policies like the TPD over the past decade.

Change on the horizon?

MEPs’ mounting probe into Big Tobacco interference arrives amid broader concerns with the state of EU anti-corruption efforts. In April, Transparency International (TI) stressed that “corruption remains a serious problem across the bloc,’ citing the Uber Files and Qatargate among the high-profile scandals which have undermined faith in EU democracy. Indeed, according to its 2021 Global Corruption Barometer, over half of EU citizens are deeply concerned about the “cosy relationship” between politics and business interests. 

Pointing to a “string of incidents” involving public sector officials abusing their authority to secure favourable regulatory decisions or lucrative contracts for private companies, TI has welcomed the Parliament’s ambitious position on the Commission’s proposed Combatting Corruption Directive to heavily sanction such offenses with criminal penalties (bribery remains the only criminalised corruption offense at EU-level). Encouragingly, MEPs are pushing for the bill to regulate special interest groups and revolving doors for staff moving between public sector and lobbying roles.

The coming term provides a major opportunity to deliver this much-needed change and bolster Europe’s democratic safeguards to defend its citizens. However, MEPs must still seal an agreement with Member States to get the Combatting Corruption Directive over the line –no easy feat given domestic reluctance to cede this legislative control to Brussels as well as the significant business interests at stake.

Nevertheless, with its citizens’ confidence in democratic institutions on a worrying trajectory in the lead up to the elections, the Commission and Parliament have little margin for error. Building on the efforts of the European Ombudsman and engaged MEPs, Brussels’s policymakers must expand and deliver on an ambitious, EU-level transparency agenda to tackle the dangerously close relationships between lobbying groups and Commission officials.