Does corruption threaten Europe?

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EU corruption isn't characterised by the handing over of cash, rather it is the buying of influence and the selling of power. [Shutterstock]

Current debate rarely attributes the rise of populism in European politics to the perceived prevalence of corruption. Yet public opinion often shows that citizens believe their representatives to be corrupt, write Laurence Cockcroft and Anne-Christine Wegener.

Laurence Cockcroft and Anne-Christine Wegener are co-authors of Unmasked: Corruption in the West.

The Global Corruption Barometer consistently shows that at least two thirds of the voting population of Europe believe both their political parties and their national parliaments to be ‘corrupt’.  But what do voters mean when they say this?

Corruption in the EU isn’t denoted in cash notes within a brown paper bag.  It is generally the corruption of influence in which the power of money can determine political outcomes. This may be characterised as the ‘buying of influence and the selling of power’.

Who is buying power? Let us look at energy markets, multinational corporations and organised crime. The Paris climate change summit at the end of 2015 identified a raft of measures to control carbon emissions. Whilst compliance is in the hands of national governments, the EU has long had a stake in the process by defining targets and monitoring compliance.

But through a combination of fraud (in relation to the market for the trading of emissions) and corruption (through, for example, the Czech government’s decision to distribute more than 100 million emission allowances for free, or by failed regulation), there are ways for the EU to dodge its obligations.

The Dieselgate scandal on vehicle emissions has added a further dimension to the issue of corruption in climate change mitigation. The European car industry has long had a record in lobbying Brussels to make only very modest changes to vehicle emission targets, with limited success.

However, the Volkswagen affair showed how Europe’s largest car manufacturer could side-step this failure by installing ‘defeat devices’ (defying testing systems) in more than eight million cars while, as reported by Der Spiegel, investigations into how this was possible appear half-hearted on the side of the German government.

Beyond the energy market, the corporate sector in Europe has a wide range of corruption issues to deal with at both national and international level. In 2013, 20% of German pharmaceutical companies reported that they had lost a contract through corruption and 75% said that the leasing of both medical equipment and contracts for research were subject to medium to high levels of corruption.

In many parts of Italy the allocation of contracts in the construction business has been controlled by different mafia groups for many years, triggering repeated commitments by incoming political leaders to clean it up.

Ex-Prime Minister Matteo Renzi was no exception. In the wake of the exposure of Rome’s former Mayor Gianni Alemanno, whose ally Massimo Carminati had been found to have €204 million in cash in his house, he vowed to address links between the mafia and the construction industry.

The subsequent attempts by the Five Star Movement’s own Mayor of Rome, Virgina Raggi, to organise a new clean-up is currently more or less stranded on the altar of political rivalries and the exposure of the mafia related links of her new appointees.

In a UK industry-wide survey in 2014, more than 80% of construction companies reported that they believed planning processes to be corrupt. On an EU-wide basis the construction sector has been beset with dubious linkages between governments, elected politicians at national and international level and in many cases, organised crime.

Who is selling influence?  While political finance in the EU is regulated to place caps on expenditure and fundraising, the system in many countries is open to widespread abuse.

In France, the cash apparently made available by Madame Bettencourt to the UMP and the reported payments by Colonel Gaddafi to the same party (illegal under French law) confirm a pattern which found Jaques Chirac guilty of corruption while Mayor of Paris.

In 2014, the Spanish courts found that the People’s Party led by Mariano Rajoy had been partly funded for over a decade by the ‘Gurtel’ series of property deals, which enabled party treasurer Berceras to hold more than €50 million in Switzerland. Some of this cash was drip-fed to senior individuals in the PP (many of whom are currently in court).

In the UK, whilst expenditure limits by parties have generally been observed, the Conservative Party has taken funds primarily from interests in the City of London – from 2010 to 2015, more than 50% of the top fifteen donations came from individuals in the financial sector. The purpose of the donation was undoubtedly to resist further regulation of the City after the crash of 2007/8.

While political finance has the effect of grapeshot – its impact uncertain and scattered – the business of lobbying is highly targeted on very specific policy decisions and the legislation which is intended to affect them.

In Brussels, the 9,500 now formally registered lobbyists (of which 6,000 represent corporate interests) focus on both objectives and the text of the legislation which will go to the European Parliament.  The sway of lobbyists, contracted to work for corporate interests, can even extend to writing the actual text in legislation.

While the EU’s Transparency Register is a big step forward in establishing the contacts made by lobbyists (including NGOs) with the Commission and Parliament it does not alter the fact that through ‘Expert Committees’, commercial lobbyists can achieve a high degree of influence on policy, contravening any democratic mandate.

In Europe, today the buying of influence and the selling of power is a discrete business and its very discretion makes it only too easy to ignore. But a majority of the population clearly believes that beneath the mask there are hugely powerful corporate and private interests at work. Building confidence in a democratic Europe will require that much of is revealed and reversed.