The European Commission said there was “scope” to slap sanctions on its former competition policy chief Neelie Kroes, embroiled in the Bahamas Leaks scandal, after taking five days to react to an e-mail where she confessed having transgressed the rules.
Commission President Jean-Claude Juncker sent a letter to Neelie Kroes on Thursday (22 September) asking for clarification about her listing as the director of a Bahamas-based company while she was the EU’s Competition Commissioner.
Neelie Kroes came under fire after documents leaked on Wednesday showed she was listed as the director of a firm in the Bahamas while in her Brussels role.
This is despite a clear obligation under the EU code of conduct to notify any side activities and former positions held in the private sector. The former Dutch Commissioner says she was not aware of the listing and acted in good faith.
European Commission chief spokesperson Margaritis Schinas told reporters on Thursday that “there is scope” to impose sanctions against the former Commissioner. But he said the Commission is waiting for some clarifications from her side before taking any further steps.
In his letter, Juncker asks the former Dutch official about when she joined the offshore company, when she realised her mistake, and when she corrected it, among other questions related to the sequence of events.
According to the investigation led by the International Consortium of Investigative Journalists, Kroes was the director of a Bahamas-based company called Mint Holdings between 2000 and 2009.
She took office as Competition Commissioner in 2004 and became Vice-President for the Digital Agenda in 2009-2014.
In a letter sent to various news organisations and to Juncker, her lawyers said Kroes believed the firm had been liquidated in 2002. But her attorney said she would take “full responsibility” for this “oversight”.
The EU code of conduct says that if a Commissioner is found guilty of “serious misconduct”, the EU Court of Justice can suspend her pension and other benefits, upon proposal by the Commission or the EU Council of Ministers.
Although Kroes has not yet received any pension from the Commission, she got 65% of her final basic salary (around €20,000) as a transitional allowance after she left the institution.
The former Dutch Commissioner has been under the spotlight since 2014 when she took high-profile jobs in the private sector. This year, she joined Uber, the US taxi-hailing company which faces numerous legal challenges across Europe. Kroes was in charge of the EU’s digital agenda portfolio for five years.
Contrary to the former Commission President, José Manuel Barroso, who is under investigation for joining US investment bank Goldman Sachs, Kroes received EU clearance for joining Uber. Indeed, she made the move after the mandatory 18 months “cooling period” following her departure from the EU executive.
A ‘lost’ email
The Commission’s reaction may be overdue after it emerged that Juncker’s team took five days to react to an email where Kroes confessed her directorship of the offshore company.
Days before the Bahamas files were published, journalists asked the Commission about Kroes’ ties with the offshore tax haven.
The executive denied having received any notification from Kroes, despite receiving an email from her on Friday (16 September), five days before the scandal broke.
Juncker’s team only spotted the email on Wednesday (21 September) afternoon, hours before media in Europe published the Bahamas papers.
The European Commission’s administrative gaffe adds to the questioning of its capacity to avoid future cases of wrongdoing in the future.
But Schinas told reporters that “as a result of this [case], everybody who aspires to be a member of this institution will make sure that memory does not fail him when it comes to the declaration of interests”.
However, the Commission spokesperson added that they would wait for the responses before discussing whether a review of the existing code of conduct is needed, which the European ombudsman has requested.
EU officials further insisted that they were still at the very initial phase of the case, suggesting the investigation could take unexpected turns.
Although Juncker did not include a strict deadline in his letter, Commission officials aid they expected a response from Kroes in the coming days.
Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs Union, said: "The leaks from the Bahamas are the latest proof of the enormous scale of global tax avoidance and evasion...Today, I am again calling on our Member States to ensure we have a common EU list of tax havens in 2017. That must include strong and viable sanctions for countries that refuse to play by the book and that provide a hiding-place for untaxed wealth."
European Parliament President Martin Schulz wrote on his twitter account: "Commissioners' conduct past and present must be exemplary Bahamas leaks shadow on Kroes. Tax avoidance and conflict of interests have no place in EU.
Neelie Kroes’s legal team told international newspapers that their client “agrees that formally she should have declared this directorship”.
“Mrs Kroes will inform the President of the European Commission of this oversight and will take full responsibility for it,” they stated.
Kroes' company (Mint Holdings) was set up by a United Arab Emirates private equity boss as a vehicle to potentially secure half the international assets of energy giant Enron, shortly before its collapse, but the $7 billion (€6.3 billion) deal fell through.
Kroes, now a paid adviser to Bank of America and Uber, earned a steely reputation in Brussels after taking on Microsoft, E.ON, GDF Suez and other corporate giants in her monopolies-busting role.