Commission’s private-sector ‘revolving door’ should work in public interest

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"Gold in Sacks" anti-Goldman Sachs flyer sticker from a 2010 campaign in Brooklyn, New York. [dumbonyc/Flickr]

Former Commission President Barroso’s job offer at Goldman Sachs has prompted outrage. But the real problem is the EU’s lack of transparency and democratic oversight. Interaction with the private sector through the so-called “revolving door” should be encouraged, write Katinka Brouwer, Penelope Bergkamp and Dr Lucas Bergkamp.

Katinka Brouwer LL.M. is a legal and regulatory consultant at Interlex NV; Penelope Bergkamp is a law student at KU Leuven; and Dr. Lucas Bergkamp is a  lawyer based in Brussels.

Shortly after Uber hired former Commissioner Neelie Kroes “to navigate policy roadblocks”, her former boss, José Manuel Barroso, announced that he will join Goldman Sachs International as non-executive chairman to advise on the Brexit decision’s fallout.

While Kroes’ move resulted in relatively little media attention, Barroso’s decision attracted much criticism. The French State Secretary of European Affairs even called on Barroso to renounce his sin and not join Goldman Sachs. In his view, Barroso would make a moral and political error by joining Goldman in light of its role in the Greek debt crisis, which, in turn, would provide further fuel to anti-EU sentiments.

Although his strong plea might be intended to draw attention away from the recent public outcry over President François Hollande’s personal hair stylist, the French government seems sincere and proposed to amend the code of conduct applicable to members of the European Commission to prevent private sector hires in the future.

Interestingly, this code of conduct was revamped and made more stringent at the instigation of Barroso when he was still in office.

It has also been argued that Barroso could be legally prevented from taking up his new job. Clearly, Barroso respected the waiting period during which former Commissioners are not allowed to “lobby or advocate with members of the Commission and their staff for her/his business, client or employer”, which lasts for 18 months.

Despite compliance with this condition, the argument is that there are other, more general obligations that would prevent a former Commissioner from accepting certain employment in the private sector. One such obligation would be the commitment “to promote the general interest of the Union and take appropriate initiatives to that end”.

What the opponents of Barroso’s banking affiliation fail to mention, however, is that this obligation applies to the Commission as an institution, not to individual Commissioners after the end of their mandate. Other such obligations would be the duty “to behave with integrity and discretion as regards the acceptance (…) of certain appointments and benefits” and “not to disclose information of the kind covered by the obligation of professional secrecy.”

Indeed, these duties apply to Commissioners also “after they have ceased to hold office”. But, contrary to what opponents have suggested, these obligations do not require that former Commissioners refrain from seeking or accepting employment in the private sector; they address the way in which they should behave in their ventures.

Moreover, the code of conduct applying to Commissioners is a more specific elaboration of these general duties, so there is a legal issue as to whether there is more to them than what the code provides.

A more fundamental problem, however, lies in the way the issue has been framed. Most of us would be sympathetic to the fear that former Commissioners representing special interests might exercise undue influence on decision-making by Commission members and staff, and the existing code of conduct addresses these concerns.

Rather than attempting to prevent former Commissioners from joining the private sector, however, the EU should encourage greater use of the Commission’s revolving door. The quality of decision-making by the Commission is enhanced by the involvement of officials with private sector experience.

Conversely, the private sector benefits from a greater understanding of European policy-making that former officials bring to the table. Indeed, former Commission officials can do much more for corporations than merely lobbying their networks.

Whether intentionally or not, pleas for more stringent conflict rules serve as subterfuge to avoid having to face up to the real problems that plague the European project. The democratic deficit is only one such problem. Another problem is the lack of transparency in decision-making by the EU institutions; is there any justification, for instance, for holding the trilogue meetings between the Commission, Council and Parliament behind closed doors?

These meetings are not even mandated by the European treaties and are an invention by the bureaucracy to prevent the public from observing European horse-trading. The rules governing better regulation are, by and large, not binding and thus are disregarded whenever doing so is politically convenient, often in those cases where they are most needed.

Furthermore, private parties are often unable to challenge EU legislation and regulation before the European courts. This lamentable lack of access to justice effectively prevents judicial review of many questionable European laws.

The antidote to undue influence on decision-making by the EU is not more stringent conflict rules that prevent officials from accepting private sector employment. Instead, the antidote is increased transparency, democratic oversight and approval of EU decisions, and expanded opportunities to seek judicial review.

Unfortunately, the French government proposal to shield the Commission from interactions with former officials is wrong-headed window-dressing. Real reform of the EU, which is in the interest of all people, would solve also this problem.

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