The European Commission should temporarily block its staff from taking private sector jobs if they pose conflict of interest risks that cannot be offset by restrictions, the European Ombudsman Emily O’Reilly recommended on Wednesday (18 May).
The EU executive should also make its approval of a new job conditional on the staff member obtaining a commitment from their new employer to publish any restrictions on its website, the Ombudsman stated.
The Ombudsman also warned that the EU institutions were a “critical point” in their treatment of ‘revolving doors’, and that “failing to control the practice now will allow the embedding of a culture that may erode public confidence in the integrity and expertise of the EU institutions.”
The recommendations follow an investigation into a sample of 100 decisions taken by the Commission in 2019-2021, across 14 Directorates-General, all Commissioner cabinets, the Commission’s Legal Service, and the Secretariat-General. Of these 100 decisions, the Commission prohibited only two activities.
There have long been concerns about the so called ‘revolving door’ of officials in the EU institutions moving to join private sector firms that they had been regulating.
“If badly handled by the EU institutions [the period] could lead to reputational damage and legal challenges,” O’Reilly said, adding that “it makes sound business sense for the EU to avoid all pitfalls from ‘revolving doors'”.
Under the existing regulations, staff are required to inform the institution if they plan to take up a job within two years of leaving the EU civil service, and the Commission can forbid the person from taking the job if it believes that there is a conflict of interests. Meanwhile, senior officials are banned from lobbying the EU institutions for 12 months after leaving the service.
However, in practice, the regulations are rarely enforced. Out of 366 applications for officials from the European Commission to the private sector and 597 applications for employment in the private sector during a leave of absence in 2019, the Commission blocked only six.
O’Reilly has previously said that the EU institutions should set up an independent body to decide on conflict of interest cases if the Commission does not take them more seriously.
A number of cases of senior officials joining the firms that they had previously regulated have caused controversy. In 2019, the European Banking Authority allowed its former Executive Director, Adam Farkas, to become chief executive of the Association for Financial Markets in Europe, one of the most powerful finance lobby groups. Almost a year after starting his new job, an investigation by O’Reilly concluded that he should not have been permitted to take up the post. The Ombudsman can issue recommendations but they are not binding on EU institutions.
Under the current regime, the commission itself decides on whether appointments could lead to a conflict of interest, based on its own staff regulations. The commission also has a three-member ethics committee monitoring departing commissioners who are looking for new jobs.
“The movement of regulators into sectors they formerly regulated has become a problematic issue in Brussels, yet this is not fully reflected in how the EU administration deals with the matter,” said O’Reilly.
“There is a tendency to underestimate the corrosive effects of officials bringing their knowledge and networks to related areas in the private sector,” she added.
[Edited by Nathalie Weatherald]